Medicare Prescription Payment Plan Program
As of January 1,2025, the Medicare Prescription Payment Plan Program will go into effect. This program is one of the changes CMS is making to the Medicare Part D prescription program. The new plan design is part of the Inflation Reduction Act. As part of the Biden administration’s effort to reduce the cost seniors pay for prescription drugs, they will have the option to spread their out-of-pocket costs out over 12 months.
CMS released draft guidance documents that outline the voluntary Medicare prescription payment plan program. The program begins January 1, 2025. This program provides beneficiaries the opportunity to enroll in a monthly payment plan that will spread the cost of their prescription out of pocket costs out over the course of the year. This is an effort to provide relief for Medicare beneficiaries who struggle with high upfront costs for prescriptions and ensures they have access to the life-saving medications they need.
More about the changes for 2025
Beginning in 2025, seniors can choose to pay their out-of-pocket drug costs through a capped monthly installment plan and do not have to worry about paying all at once at the pharmacy. This is especially helpful to beneficiaries who have a higher cost share at the start of the year. They can spread the cost out over the course of. This will also go into effect in 2025.the year.
Learn more about the Medicare drug cap
Click here to watch a quick video on potential changes to Medicare commission payments for 2025
In addition to the Medicare Prescription payment plan program, the Inflation Reduction Act will put an annual cap of $2,000 on out-of-pocket drug costs under Part D
Click here to read the CMS fact sheet on the program.
The CMS includes instructions on how prescription drug plans can identify patients who may benefit from the program. It also offers ways to notify them about the program with the use of their own pharmacy. There are also rules that ensure prescription drug plan carriers reimburse pharmacies promptly for the cost sharing amount beneficiaries would normally have to pay up front.
If a beneficiary decides to enroll in the new program, they can simply notify their insurer starting in 2025.
There are still some key pieces of information missing. CMS must specify how the new program impacts the insurers plan bids for 2025. CMS says the information will be available early in 2024 as part of the second draft guidance. The second draft guidance will also include details on beneficiary outreach as well as how insurance plans will be tracked and enforced. Please note: CMS normally does not release its bid guidance until spring.
The current guidance document provided by CMS enacts the drug pricing reforms passed under the Inflation Reduction Act. The $35 monthly insulin cap for Medicare beneficiaries has already been implemented by CMS. and the agency must release the first 10 drugs subject to Medicare and drugmaker price negotiations by Sept. 1.