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 outof-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.

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 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.

How can I opt-in or learn more about to the Medicare Prescription Payment Plan?

For more information, please visit the Medicare.gov/prescription-payment-plan to learn about this payment option and if it might be a good fit for you