New Program Makes Installment Payments an Option for Medicare Part D Enrollees
What You Need to Know
Effective in 2025, Medicare Part D enrollees will have a $2,000 limit on out-of-pocket expenses for prescription drugs.
The Medicare Payment Prescription Plan helps enrollees in Part D coverage pay for the expenses for which they remain responsible.
Medicare will be sending information to enrollees to help them determine whether the program is right for them.
The Inflation Reduction Act of 2022 made a number of changes that are only now starting to become effective, and many affect the rights of Medicare beneficiaries going forward.
One of the more significant changes that becomes effective in 2025 places a $2,000 limit on out-of-pocket expenses that Medicare Part D enrollees will have to pay for prescription drugs. In connection with the $2,000 cap, Medicare has created the Medicare Payment Prescription Plan, a program to help enrollees in Part D coverage pay for the expenses for which they remain responsible.
It is much more complex than many enrollees realize, and advisors may wish to start learning about the program now so that they can help clients maximize its value. The plan is not designed to save enrollees additional money; the point is to spread the costs of prescription drugs over a number of months to reduce the financial burden.
Medicare will be sending information to enrollees to help them determine whether the program is right for them, so clients should be advised to pay close attention to any Medicare materials that they receive.
Inflation Reduction Act Changes
With the Inflation Reduction Act, individuals receiving catastrophic coverage are no longer required to cover otherwise applicable cost-sharing requirements for prescription drugs. In addition, insulin costs are capped at $35 per month, and the law eliminates cost sharing for recommended vaccines for individuals with Part D coverage.
Beginning in 2025, those with Medicare Part D coverage will have their prescription drug costs capped at $2,000. While the $2,000 cap will reduce an individual’s costs over the year, many enrollees are likely to have high prescription drug costs early in the year. For this reason, the Medicare Payment Prescription Plan was created.
Medicare Payment Prescription Plan: The Basics
The Medicare Payment Prescription Plan gives Medicare Part D enrollees the option of paying for prescription drug costs in monthly installments, rather than paying in full each time they refill prescriptions. Medicare Part D will instead pay the pharmacy, and then send a bill to the individual enrollee on a monthly basis.
