Medicare prescription payment plan
The Medicare prescription payment plan is also referred to as “smoothing“. This is a way to help Medicare beneficiaries pay for the high cost of prescription medications. The Medicare prescription payment plan is one small part of the inflation reduction act of 2022.
Watch a quick YouTube video on potential changes to commissions in 2025
When will the program start
In 2025, Medicare Part D (PDP) plan enrollees have a chance to opt for a prescription payment program. The plan will help beneficiaries pay out-of-pocket costs for prescriptions. Everyone in a PDP plan has a chance to enroll in the payment program, it is not based on income. Enrollees have the option to enroll before the plan year starts or during any month of the year. Please note, the payment plan does not include plan premium payments.
Here are some of the details
Participation in the Medicare prescription payment plan is optional. PDP plan enrollees must choose to be part of the program. Once an enrollee joins the program, and has out-of-pocket prescription costs, they receive a monthly bill to cover those costs. Any out-of-pocket costs for prescriptions are included even during the deductible phase of PDP coverage. There is no minimum out-of-pocket amount required before anyone can join. Participants receive a monthly bill as long as they remain part of the program.
How is the monthly payment amount decided
There will be an annual cap of $2,000 on out-of-pocket costs in 2025. The amount each beneficiary pays for their monthly plan depends on a few different factors. It is not as easy as dividing $2,000 over the course of 12 months.
Learn more about the Part D drug cap
- The Medicare prescription payment plan will deduct the out-of-pocket amount beneficiaries have already paid before enrollment in the program.
- Any remaining costs are then divided by the number of months left in the year.
CMS will create a payment calculator so Part D beneficiaries can decide if enrolling in the payment plan is a good idea or not.
CMS is still working out the details of this program
We do not know exactly how the prescription payment program will work yet because the details have not been finalized by CMS yet. We will post additional details as they are available to the public.
Please note: This program is set to start in 2025, the same year the annual drug cap will be set at $2,000. In other words, no Part D enrollee will pay more than $2,000 out-of-pocket for their prescriptions.