New Changes Will Help Medicare Beneficiaries Afford Prescription Drug Costs
Recently, Congress made changes to Medicare Part D to help beneficiaries manage out-of-pocket costs and better afford their medications. In 2025, there will be an annual out-of-pocket maximum, or limit, on the amount Medicare Part D beneficiaries will have to pay. In 2025, the maximum amount a Part D beneficiary will have to pay for their medications over the calendar year is $2,000.
A second new benefit called the Medicare Prescription Payment Plan allows beneficiaries to opt into a payment option to spread out costs—up to the new $2,000 maximum limit—into monthly installments, with no interest or fees. So instead of paying the total out-of-pocket costs for a prescription medication at the pharmacy counter, or wherever one gets their prescriptions, that cost can be spread out into smaller monthly payments over the year. It doesn’t cost anything to take advantage of this payment option.
The film is also available in Spanish and with a 30-second PSA and 60-second PSA.
IMPORTANT THINGS TO REMEMBER:
- Beneficiaries must opt-in directly with their Part D Plan at least 24 hours before picking up their first medication (it is NOT possible to sign up at the pharmacy counter.)
- Beneficiaries must sign up for the option each year with their Part D plan.
- If a payment is missed, a beneficiary may be removed from the program. If this happens, any remaining unpaid balance will still need to be repaid.
- When opting in to the Medicare Prescription Payment Plan, beneficiaries will pay their Part D drug costs in monthly installments over the length of the plan year (January-December). Since the last installment occurs in December each year, opting in earlier in the year will allow for more months to spread out costs.
- After enrolling in the Medicare Prescription Payment Plan, beneficiaries will pay $0 for their Part D drugs at the pharmacy counter (or wherever you order your prescription medications). Instead, they will receive a monthly bill for the Part D insurance plan costs.
Helpful Resources
Enrolling in Medicare
Every year, Medicare’s open enrollment period – or the time when all people with Medicare can change their Medicare health plans and prescription drug coverage for the following year – is October 15 to December 7. To find plan information, and even compare plans, call 1-800-MEDICARE or visit www.Medicare.gov. Learn more and get answers to common questions in the Tips for Medicare Part D Open Enrollment.
To get help navigating the Medicare program, including finding and comparing plans, the State Health Insurance Assistance Programs (SHIPs) can help. SHIPs provide local and objective insurance counseling and assistance to Medicare-eligible individuals, their families, and caregivers. To a local SHIP, learn more about prescription drug plan options and assistance programs, receive help understanding eligibility criteria and Medicare coverage, and much more, visit https://www.shiphelp.org.
Check out these helpful resources on Medicare Open Enrollment from RetireSafe including printable resources and factsheets.
Selecting a Medicare Part D Plan
Medicare Part D plans cover prescription drugs for people with Medicare. Most Medicare Advantage plans include drug coverage, but people with Original Medicare can buy stand-alone Part D plans. Part D is optional, but there are permanent cost penalties for signing up late after initially going without coverage.
Once a Medicare drug plan is chosen, there are several ways to get prescription drug coverage:
1. Enroll via the Medicare Plan Finder or on the plan’s website.
2. Complete a paper enrollment form.
3. Call the plan.
4. Call 1-800-MEDICARE (1-800-633-4227). TTY: 1-877-486-2048.
When joining a Medicare drug plan, a Medicare number and the Part A and/or Part B coverage start date is needed. This information is on the Medicare card.
If You Need Financial Assistance Affording Your Prescription Drugs
While the Medicare Prescription Payment Plan helps to manage beneficiary costs, it doesn’t lower costs. However, there are additional programs that can help lower costs:
Extra Help: A Medicare program that helps pay Medicare drug costs for those with limited income and resources. Visit secure.ssa.gov/i1020/start for qualifications and to apply, or apply with your state’s Medicaid office. Many more people qualify for help than they realize. Visit Medicare.gov/basics/costs/help/drug-costs to learn more.
Medicare Savings Program: A state-run program that helps people with limited income and resources pay some or all of their Medicare premiums, deductibles, and coinsurance. Visit Medicare.gov/medicare-savings-programs to learn more.
State Pharmaceutical Assistance Program (SPAP): A program that may include coverage for Medicare drug plan premiums and/or cost sharing. SPAP contributions may count towards the Medicare drug coverage out-of-pocket limit. Visit go.medicare.gov/spap to learn more.
Manufacturer’s Pharmaceutical Assistance Programs (sometimes called Patient Assistance Programs (PAPs)): A program from drug manufacturers to help lower drug costs for people with Medicare. Visit go.medicare.gov/pap to learn more.
Charitable Foundations: Independent organizations that provide assistance for out-of-pocket drug costs, deductibles and coinsurance. For a list of all foundations and programs, you may register with FundFinder at www.FundFinder.org.
Medicare Prescription Payment Plan
A fact sheet from Medicare answers frequently asked questions and is available in English, Spanish, Chinese, Korean, and Vietnamese.
CMS also created a Frequently Asked Questions document to help sponsors and beneficiaries get in-depth answers to some of their most commonly asked questions.
The “Will this payment option help me?” tool can help determine if the Medicare Prescription Payment Plan is a good fit. Visit https://www.medicare.gov/prescription-payment-plan for more information.
The PAN Foundation helps beneficiaries Understand the Medicare Prescription Payment Plan
The Alliance for Aging Research serves as the convener for Project LOOP, an ad hoc coalition effort committed to addressing patients’ costs for prescription drugs. AbbVie, Astellas, Bristol Myers Squibb, Gilead Sciences, Lilly, Lundbeck, and Sanofi provide support for Project LOOP. Project LOOP is a registered trademark of the Alliance for Aging Research.