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Medicare Prescription Drug Coverage: Why Agents Should Guide Their Clients

When it comes to Medicare, prescription drug coverage (Part D) is one of the most important decisions beneficiaries will make. Prescription costs can have a major impact on a person’s budget and quality of life, and the right plan can save thousands of dollars each year.

For Medicare agents, helping clients navigate their Part D options isn’t always about commissions, it’s about building long-term trust, maintaining strong relationships, and positioning yourself as a valuable resource.

Why Agents Should Assist With Part D Decisions

Client Trust and Retention

Even if you aren’t earning a commission on every Medicare Prescription Drug Plan, guiding your clients through their choices shows that you care about their overall well-being. Beneficiaries notice when an agent takes the time to help without a financial incentive. That trust builds loyalty, which translates to long-term client retention.

The Importance of Enrolling on Time

Many beneficiaries don’t realize that failing to enroll in Medicare prescription drug coverage when first eligible or going without creditable drug coverage for more than 63 continuous days can lead to a lifetime late enrollment penalty (LEP). This penalty is added to the monthly Part D premium and grows the longer someone goes without coverage.

As an agent, explaining this to clients ensures they understand the financial consequences of delaying enrollment. Helping them avoid unnecessary penalties is another way to build trust and showcase your expertise.

Strengthening Relationships

By reviewing drug coverage options, you’re demonstrating your commitment to helping clients find the most cost-effective and comprehensive plan. This not only makes clients more likely to refer friends and family, but it also establishes you as their go-to resource for future Medicare needs.

Positioning Yourself for Additional Sales Opportunities

Helping with prescription drug coverage is often the first step toward uncovering other gaps in coverage. Once trust is built, clients may be more open to discussing:

• Medicare Supplement plans (Medigap): To help with out-of-pocket costs not covered by Original Medicare.
• Ancillary products: Such as dental, vision, hearing, short-term care, or critical illness coverage. These plans can provide extra protection and peace of mind for expenses Medicare doesn’t cover.

Watch a quick YouTube video on how to deal with non-commissionable PDP plans

Showing That You Put Clients First

Beneficiaries can feel overwhelmed by the number of plan choices. When you guide them, without focusing on commissions, you prove that your priority is their best interest. This approach differentiates you from competitors and builds long-term credibility.

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The Bottom Line

Helping clients choose the right Medicare Prescription Drug Plan isn’t just about filling out enrollment forms; it’s about demonstrating integrity, earning trust, and protecting clients from costly mistakes like lifetime penalties.

Even when commissions aren’t involved, the time you invest in helping clients with their Part D decisions will pay off in other ways: stronger retention, new sales opportunities, and a reputation for truly putting clients first. With the client’s permission, agents can run the comparison and send the recommendation through a quick email. If the best option is a non-commissionable plan, clients can easily self-enroll through medicare.gov or a phone call to the carrier.

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Please keep in mind, it is always important to follow all CMS enrollment rules.

By taking a holistic approach, you not only help clients get the coverage they need, you also ensure your business continues to grow through loyalty, referrals, and expanded product offerings.

In 2025, one of the changes to the Part D program is a $2,000 out-of-pocket maximum for MAPD/PDP beneficiaries.  CMS will also put a prescription payment plan program in place.  The program is referred to as “smoothing” and begins Jan 1, 2025. It is part of the Inflation Reduction Act of 2022. What is Medicare Smooothing; this program gives beneficiaries an opportunity to use a payment plan to spread out the cost of prescription medications over the year. CMS put this program together to help mitigate the cost of prescrption drugs.

Click here to learn more about the prescription payment program

What is Medicare Smoothing

Medicare Smoothing is a way to even out the out-of-pocket costs that Medicare beneficiaries may incur each year. Unlike other health insurance plan costs, such as premiums, coinsurance and co-pays that vary significantly each year, Medicare Smoothing provides a predictable expense for Medicare drug plan beneficiaries.

This approach spreads out medication costs over a period of time, rather than allowing them to spike in any given month. Beneficiaries who take advantage of this program can reduce the financial strain of sudden large medication expenses.

How Does Smoothing work

As of January 1, 2025, Medicare beneficiaries have the option of smoothing out-of-pocket costs for Part D coverage. Every Medicare Part D plan sponsor must provide plan enrollees the option to pay their cost-sharing in monthly payment amounts.

Beneficiaries can enroll in the smoothing program at the start of each plan year or any time during the plan year.

Once the beneficiary elects to use this option for payment of their covered medications, the carrier determines the first payment amount. This amount is based on a maximum monthly cap. The cap is determined by calculating the annual out-of-pocket maximum ($2000 in 2025), minus the out-of-pocket costs incurred to date, divided by the number of months left in the current year.

To determine payment amounts for subsequent months, the maximum monthly cap is calculated using the total remaining out-of-pocket costs from the previous month that the beneficiary has not been billed for and any additional out-of-pocket costs incurred divided by the number of months remaining in the plan year.

Benefits of Smoothing

Financial Predictability

By spreading out expenses, Medicare Smoothing provides beneficiaries with a clearer picture of their healthcare costs. This is one way to help them control the budget and also provides some peace of mind.

Reduced Financial Strain

Large, unexpected medical bills can be a burden for anyone on a fixed income. Medicare Smoothing helps mitigate some financial risks by providing a consistent cost structure.

Enhanced Access to Care

With more predictable costs, beneficiaries may be more likely to seek necessary medical care without fear of incurring overwhelming expenses.

Additionally

Medicare Smoothing is a great way to manage healthcare costs, especially for those on a fixed income. By spreading out expenses and using the advice of a licensed Medicare agent, beneficiaries can achieve greater financial stability. As with any financial strategy, a professional should consider individual needs to develop a plan tailored to each specific situation.

Medicare agents – watch a quick YouTube video on the Medicare commission 2025 final update

Please note: in 2026 price negotiations will start for expensive drugs that do not have a generic alternative.

Learn the details of the price negotiation program

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