My friend says the new Medicare drug payment plan in 2025 will help with her expensive medications. Would it help me too?
Answered by 9 licensed agents
In 2025, all Medicare Part D plans have a $2,000 annual out-of-pocket maximum for covered drugs. Medicare has set up a payment plan to help offset the burden of paying for this $2000 cap. Once you reach this limit, your plan will pay 100% for your covered medications for the rest of the year. However, you must still pay your portion of the out-of-pocket costs upfront at the pharmacy or through the payment plan. This cost depends upon the drug's tier and the drug plan’s deductible, which is based upon the different drug plans available.
This cost can be easily disbursed through the Medicare payment plan, lowering your monthly drug cost. It does not change that you must pay for upfront or throughout the coming months with the Medicare payment plan.
Your monthly drug cost with this Medicare payment plan is based on what you would have paid out of pocket at the pharmacy for your prescriptions that month, plus your previous month’s balance. It is divided by the number of months left in the year.
In other words, if your out-of-pocket drug cost is $1200 a year, then you would be paying $100 per month. This does not include your premium for the drug plan.
It's possible. It depends on the particular medications you take and what your overall projected expense will be. The Medicare Prescription Payment plan (M3P) will go a long way to making monthly prescription pickups more balanced. For instance, instead of paying $590 for the first pick up of the year, M3P can average out the annual cost and may make the first pickup in the range of $180. You must talk to your insurance plan to trigger M3P prior to making the first prescription purchase of the year.
It depends. If your deductible and co-payments will be near the $2000 maximum, and they would come up in the first few months, yes it would help. To be clear, it doesn't save any money, it just lets you spread the payments out.
The changes to part D under the American Rescue Plan change the maximum out of pocket for covered prescription drugs to $2,000 from $8,000 last year. It should help with your costs, given the following circumstances.
The operative term here is "covered". Because this change put a greater financial burden on plan sponsors (Medicare Advantage and PDP companies), many sponsors changed their drug list, or formulary, to lower their costs. So, as long as your drugs are covered under your plan and out of pocket costs exceed $2,000 annually, you should save money under the new law.
If your drugs are not covered under your plan, you can contact them with the help of your doctor and request an exception.
Everyone's individual needs are different. Her expensive drugs may be a different Tier than your drugs. Her plan may be a totally different plan than what is best for you. Find an agent who will sit and review those plans with you when you elect to pick your plan. I can tell you the 2025 plan is fantastic in comparison to 2024, as it will limit your max out-of-pocket between Premium and drug expense will not be over $2000.
You can set up the patient payment plan with your prescription company at any time to help pay for the cost of expensive drugs. They will divide the cost by number of months left in the year, then enter you a bill each month to pay for them. It can change each month because of another prescription added.
The Medicare Prescription Payment Plan MPPP) is a payment option in the prescription drug law that works with your current drug coverage to help you manage your out-of-pocket costs for drugs covered by your plan by spreading them across the calendar year (January–December). Anyone with a Medicare drug plan or Medicare health plan with drug coverage (like a Medicare Advantage Plan with drug coverage) can use this payment option. All plans offer this payment option, and participation is voluntary.
If you select this payment option, each month you’ll continue to pay your plan premium (if you have one), and you’ll get a bill from your health or drug plan to pay for your prescription drugs (instead of paying the pharmacy). There’s no cost to participate in the Medicare Prescription Payment Plan.
It may. This is a great illustration as to why it is important to check your prescriptions with each plans formulary (list of covered prescriptions). What is a good plan for your friend may not be such a great plan for you. You each likely take different prescriptions and each insurance company and plan covers prescriptions differently. Therefore, it is imperative to run your prescriptions through a tool that can compare your prescription needs with all the available plans in your area. And it is important to check annually during the annual enrollment period.
