In 2025, Medicare will have a new program allowing Medicare beneficiaries to spread payments out for expensive medications over the entire year. The program is called the Medicare Prescription Payment Plan (M3P). This will allow beneficiaries taking expensive medications to pay $0 at the pharmacy and make payments to the Prescription Drug Plan over the remainder of the year. This is one of the changes Medicare has made to make medications affordable for beneficiaries. Below are questions from the Medicare M3P Fact Sheet.

Q: What is the Medicare Prescription Payment Plan?
Part D plan sponsors provide their enrollees with the option to pay out-of-pocket prescription drug costs in the form of monthly payments over the course of the plan year instead of all at once to the pharmacy. The program begins January 1, 2025. Program participants will pay $0 to the pharmacy for covered Part D drugs, and Part D plan sponsors will then bill program participants monthly for any cost sharing they incur while in the program.

Q: Who is likely to benefit from the Medicare Prescription Payment Plan?
Being able to pay high cost sharing amounts in the form of monthly payments instead of all at once to the pharmacy will improve access to — and affordability of — prescription drugs for some people with Medicare Part D. This option can help program participants who face high cost sharing for prescription drugs manage these costs by spreading them out over the course of the plan year. While this program is available to anyone with Medicare Part D, enrollees with high cost sharing earlier in the plan year are more likely to benefit from the program.

Q: Will this program help me if I qualify for Extra Help with my prescriptions and Part D premiums?
For Medicare enrollees with Part D who are eligible for the Low-Income Subsidy (LIS) (also known as Extra Help), enrollment in Extra Help is more advantageous than the Medicare Prescription Payment Plan.

Q: Can I use this program if I have a Medicare Advantage plan with Prescription Drug Coverage?
Yes. Any Medicare beneficiary who has a standalone PDP or a Medicare plan with drug coverage included will be eligible to participate in M3P.

Q. Will the Medicare Prescription Payment Plan reduce individuals’ overall out-of-pocket costs?
No. This program does not reduce the amount of money that an individual pays in out-of-pocket costs; it helps individuals with high costs spread those costs throughout the plan year.

Q: When can Part D enrollees opt into the Medicare Prescription Payment Plan? How will Part D enrollees opt into the program?
Starting with plan year 2025, any Part D enrollee may opt into the program prior to the beginning of a plan year or in any month during a plan year. Part D enrollees or their legal representative will be able to opt in directly with their Part D plan sponsor via several different mechanisms. Call your plan sponsor for more information.

Q: Can individuals opt out of the Medicare Prescription Payment Plan once they have opted in? Can an individual’s participation be terminated?
Yes, Part D plan sponsors must have a process in place to allow their program participants to opt out at any point during the plan year. Part D plan sponsors will continue to send monthly bills after someone opts out or the beneficiary can make a lump sum payment of the remaining balance.

After opting out, the individual will pay any new out-of-pocket costs directly to the pharmacy. If a participant fails to pay the amount, billed by the Part D sponsor, their participation in the program may be terminated following a required two-month grace period.

It is important to note that plan sponsors cannot cancel the beneficiary’s Part D plan because of non-payment of the Prescription Payment Plan.

Q: What is the role of pharmacies in this new Medicare Prescription Payment Plan?
The Part D plan sponsor must notify the pharmacy if a beneficiary would benefit from participating in the Prescription Payment Plan. The pharmacy will provide the Part D enrollee with the Medicare Prescription Payment Plan Likely to Benefit Notice, a standardized notice that all Part D sponsors are required to use.

Adapted from an article by CMS.gov

This article is for information only and should not be considered a recommendation. Talk with a licensed Health Insurance Professional about your specific circumstances. For more information you can go to The Texas Department of Insurance.