Medicare Part D is Changing
What’s the Medicare Prescription Payment Plan?
The Medicare Prescription Payment Plan is a new payment option in the prescription drug law that works with your current drug coverage to help you manage your out-of-pocket Medicare Part D drug costs by spreading them across the calendar year (January-December). Starting in 2025, anyone with a Medicare drug plan or Medicare health plan with drug coverage (like a Medicare Advantage Plan with drug coverage) can use this payment option. All plans offer this payment option and participation is voluntary.
If you select this payment option, each month you’ll continue to pay your plan premium (if you have one), and you’ll get a bill from your health or drug plan to pay for your prescription drugs (instead of paying the pharmacy). There’s no cost to participate in the Medicare Prescription Payment Plan.
What to know before participating:
How does it work?
When you fill a prescription for a drug covered by Part D, you won’t pay your pharmacy (including mail order and specialty pharmacies). Instead, you’ll get a bill each month from your health or drug plan.
Even though you won’t pay for your drugs at the pharmacy, you’re still responsible for the costs. If you want to know what your drug will cost before you take it home, call your plan or ask the pharmacist.
This payment option might help you manage your monthly expenses, but it doesn’t save you money or lower your drug costs.
How is my monthly bill calculated?
Your monthly bill is based on what you would have paid for any prescriptions covered by Medicare Part D that you get, plus your previous month’s balance, divided by the number of months left in the year. All plans use the same formula to calculate your monthly payments.
Your payments might change every month, so you might not know what your exact bill will be ahead of time. Future payments might increase when you fill a new prescription (or refill an existing prescription) because as new out-of-pocket costs get added to your monthly payment, there are fewer months left in the year to spread out your remaining payments.
In a single calendar year (January – December), you’ll never pay more than:
– The total amount you would have paid out of pocket to the pharmacy if you weren’t participating in this payment option.
– The Medicare drug coverage annual out-of-pocket maximum ($2,000 in 2025).
The prescription drug law caps your out-of-pocket drug costs at $2,000 in 2025. This is true for everyone with Medicare drug coverage, even if you don’t participate in the Medicare Prescription Payment Plan.
Will this help me?
It depends on your situation. Remember, this payment option might help you manage your monthly expenses, but it doesn’t save you money or lower your drug costs.
You’re most likely to benefit from participating in the Medicare Prescription Payment Plan if you have high drug costs earlier in the calendar year. Although you can start participating in this payment option at any time in the year, starting earlier in the year (like before September), gives you more months to spread out your drug costs. Go to Medicare.gov/prescription-payment-plan/will-this-help-me to answer a few questions, and find out if you’re likely to benefit from this payment option.
This payment option may not be the best choice for you if:
– Your yearly drug costs are low.
– Your drug costs are the same each month.
– You’re considering signing up for the payment option late in the calendar year (after September).
– You don’t want to change how you pay for your drugs.
– You get or are eligible for Extra Help from Medicare.
-You get or are eligible for a Medicare Savings Program.
– You get help paying for your drugs from other organizations, like a State Pharmaceutical Assistance Program (SPAP), a coupon program, or other health coverage.
Who can help me decide if I should participate?
– Your health or drug plan: Visit your plan’s website, or call your plan to get more information. If you need to pick up a prescription urgently, call your plan to discuss your options.
– Medicare: Visit Medicare.gov/prescription-payment-plan to learn more about this payment option and if it might be a good fit for you.
– State Health Insurance Assistance Program (SHIP): Visit shiphelp.org to get the phone number for your local SHIP and get free, personalized health insurance counseling.
How do I sign up?
Visit your health or drug plan’s website, or call your plan to start participating in this payment option:
– In 2024, for 2025: If you want to participate in the Medicare Prescription Payment Plan for 2025, contact your plan now. Your participation will start January 1, 2025.
– During 2025: Starting January 1, 2025, you can contact your plan to start participating in the Medicare Prescription Payment Plan anytime during the calendar year.
Remember, this payment option may not be the best choice for you if you sign up late in the calendar year (after September). This is because as new out-of-pocket drug costs are added to your monthly payment, there are fewer months left in the year to spread out your payments.
What to know if I’m participating:
What happens after I sign up?
Once your health or drug plan reviews your participation request, they’ll send you a
letter confirming your participation in the Medicare Prescription Payment Plan. Then:
1. When you get a prescription for a drug covered by Part D, your plan will
automatically let the pharmacy know that you’re participating in this payment
option, and you won’t pay the pharmacy for the prescription.
Even though you won’t pay for your drugs at the pharmacy, you’re still responsible
for the costs. If you want to know what your drug will cost before you take it home,
call your plan or ask the pharmacist.
2. Each month, your plan will send you a bill with the amount you owe for your
prescriptions, when it’s due, and information on how to make a payment. You’ll get
a separate bill for your monthly plan premium (if you have one).
How do I pay my bill?
After your health or drug plan approves your participation in the Medicare Prescription
Payment Plan, you’ll get a letter from your plan with information about how to pay your bill.
What happens if I don’t pay my bill?
You’ll get a reminder from your health or drug plan if you miss a payment. If you don’t
pay your bill by the date listed in that reminder, you’ll be removed from the Medicare
Prescription Payment Plan. You’re required to pay the amount you owe, but you won’t pay
any interest or fees, even if your payment is late. You can choose to pay that amount all at
once or be billed monthly. If you’re removed from the Medicare Prescription Payment Plan,
you’ll still be enrolled in your Medicare health or drug plan.
Always pay your health or drug plan monthly premium first (if you have one), so you
don’t lose your drug coverage. If you’re concerned about paying both your monthly plan
premium and Medicare Prescription Payment Plan bills, go to page 5 for information about
programs that can help lower your costs.
Call your plan if you think they made a mistake about your Medicare Prescription Payment
Plan bill. If you think they made a mistake, you have the right to follow the grievance
process found in your Member Handbook or Evidence of Coverage.
How do I leave?
You can leave the Medicare Prescription Payment Plan at any time by contacting your
health or drug plan. Leaving won’t affect your Medicare drug coverage and other Medicare
benefits. Keep in mind:
– If you still owe a balance, you’re required to pay the amount you owe, even though you’re
no longer participating in this payment option.
– You can choose to pay your balance all at once or be billed monthly.
– You’ll pay the pharmacy directly for new out-of-pocket drug costs after you leave the
Medicare Prescription Payment Plan.
What happens if I change health or drug plans?
If you leave your current plan, or change to a new Medicare drug plan or Medicare health
plan with drug coverage (like a Medicare Advantage Plan with drug coverage), your
participation in the Medicare Prescription Payment Plan will end.
Contact your new plan if you’d like to participate in the Medicare Prescription Payment Plan
again.
Where can I get more information?
- Your health or drug plan: Visit your plan’s website, or call your plan to get more information.
- Medicare: Visit Medicare.gov/prescription-payment-plan, or call 1-800-MEDICARE (1-800-633-4227), 24 hours a day, 7 days a week. TTY users can call 1-877-486-2048.
