Medicare Prescription Payment Plan
The Medicare Prescription Payment Plan is a new payment option in the prescription drug law. It 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 Advantage plan with drug coverage can use this payment option.
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).
Will this help me?
It depends on your situation. Remember, this payment option might help you manage your monthly expenses but doesn’t save you money or lower your drug costs. You’ll most likely 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 any time in the year, starting earlier in the year (like before September) gives you more months to spread your drug costs.
Visit Medicare.gov/prescription-payment-plan/will-this-help-me to answer a few questions and determine if you’ll benefit from this payment option.
For more information, please visit https://www.medicare.gov/prescription-payment-plan.
To sign up for this plan as a Medicare Advantage member, please click here to download the form.