Medicare prescription drug coverage, known as Part D, is undergoing major changes. With the updated benefit design, you won't have to deal with multiple coverage phases for your prescription costs any longer, and the coverage gap is gone. Instead, you'll pay for your prescriptions (after paying a deductible, if applicable) until you reach your annual out-of-pocket limit of $2,000. In addition, there is a new Medicare Prescription Payment Plan that could change how you pay for your medications.
What is it?
The Medicare Prescription Payment Plan allows people with Medicare prescription coverage (Part D) to pay their out-of-pocket prescription drug costs in monthly installments instead of all at once. You are not automatically enrolled in the program; you must choose to opt in. Anyone with a Part D plan can opt into the program at any time during the year. The Medicare Prescription Payment Plan only applies to Part D and Medicare Advantage plans that offer Part D benefits.
How does it work?
If you opt-in to the program, you will not pay for medications at the pharmacy when you pick up your prescription. Instead, your Part D plan will pay the pharmacy, and your plan will send you bills for the amount you owe during each of the remaining months of the year. This is referred to as “smoothing” and is a way to spread your out-of-pocket medication costs out over the year, paying part of the costs each month up to the maximum amount of $2000 in total for the year.
Does this save me money?
This program doesn’t lower your out-of-pocket costs for prescriptions. However, it may make paying for medications more manageable by spreading the costs throughout the year instead of all at once.
How do you sign up?
During the 2025 Open Enrollment period, individuals with Part D or Medicare Advantage plans that cover prescriptions can enroll in the Medicare Prescription Payment Plan. Contact your Part D plan provider and follow the enrollment process to enroll. You or your authorized representative can submit an election request to join the program. You can submit this request by paper, phone, or online. Your Part D plan will process your enrollment request within 24 hours.
What medications are included in the Medicare Prescription Payment Plan?
All Medicare Part D drugs are included in the program. Part D plans cannot exclude any covered medications. Once you opt into the Medicare Prescription Payment Plan, all your out-of-pocket prescription drug costs will be billed monthly as required, as long as you remain in the plan.
