New in 2025: Prescription Payment Plans

In 2025, the Medicare program will see a significant change with the rollout of the Part D Prescription Payment Plan. This marks a groundbreaking addition to the Medicare system, leading to numerous questions among beneficiaries. Today, we’ll address many of these inquiries.

What Is the Prescription Payment Plan?

Medicare's Prescription Payment Plan is a voluntary initiative that beneficiaries will need to apply for annually, starting in 2025. This program provides a way to better manage out-of-pocket costs for medications covered under your Part D plan by allowing you to spread payments across the calendar year.

The Prescription Payment Plan applies to all Part D plans, as well as the prescription coverage included in any Medicare Advantage plans that offer Part D benefits. Participating in the payment plan incurs no fees or interest.

Typically, this will involve an additional payment alongside your standard plan premium. You will be paying your plan directly for the prescriptions instead of the pharmacy. Note that your payments may vary each month, as you can accumulate your balance over time. Adding a prescription to the plan earlier in the year will allow for more manageable monthly payments, compared to adding a prescription later in the year.

It's also important to keep in mind that in 2025, there will be a new maximum out-of-pocket limit for all Part D plans, set at $2,000 for the calendar year.

How Do I Enroll in the Prescription Payment Plan?

There are multiple ways to enroll in the Prescription Payment Plan. You can start by visiting your plan's website for more details or by calling your insurance carrier directly. You can do this as soon as you confirm your new plan for 2025, and you also have the option to enroll later in the year if you prefer.

Once you’ve successfully applied and have been accepted into the payment plan, you will receive a confirmation letter detailing your participation. Each time you fill a new prescription, your carrier will inform the pharmacy about your payment plan status. Monthly, you will receive a separate bill from the carrier for your prescriptions, along with instructions on how to make a payment.

It's important to note that if you miss a payment, you will be automatically disenrolled from the payment program. However, you won’t incur any penalties or interest for late payments, nor will you lose your Part D or Medicare Advantage coverage. If you're having trouble with payments, make sure to prioritize your premium payment to maintain your coverage.

You have the flexibility to opt out of the prescription payment plan at any time; however, you'll still be responsible for settling any remaining balance. You can either make a lump sum payment or choose to continue spreading your payments throughout the year.

If you switch your plan during the year, be sure to contact your new carrier to re-enroll in the Prescription Payment Plan.