Facts about the Medicare Prescription Payment Plan

If you’re wondering “What is the Medicare Prescription Payment Plan?” or debating whether the plan is right for you, we are here to help you make the decision that fits.

Facts about the new Medicare Prescription Payment Plan

Launched in January 2025, the Medicare Prescription Payment Plan (MPPP) is a voluntary payment option that allows anyone with a Part D drug plan to spread your out-of-pocket prescription drug payments throughout the calendar year.

Anyone with a Medicare Part D plan can choose to opt-in to the Medicare Prescription Payment Plan!

If you have a Medicare Part D plan, regardless of how much you spend out-of-pocket for your prescription medications or which Part D plan you have, you can opt-in to the Medicare Prescription Payment Plan. By law, every Part D plan is required to offer this plan to its enrollees. The higher your out-of-pocket costs, the more this program might help you spread your out-of-pocket costs throughout the year instead of having to pay all at once. Check out our guide to what to consider before opting in to the payment program.

The plan “smooths” the cost of your prescriptions over the calendar year, but it doesn’t lower the price.

Monthly costs in the Medicare Prescription Payment Plan can vary depending on which medications you fill, when they are filled, and if you add new prescriptions during the year. A common misconception is that you won’t ever spend more than $167 per month (that’s $2,000 divided by 12 months) when enrolled in the plan. Your monthly payment could change, for example, if you add a new prescription during the year. Check out our guide and estimate your monthly payments.

However, thanks to the Medicare Part D cap, your total annual out-of-pocket costs will not exceed the annual cap (in 2025 this is $2,000 but will increase each year).

If you want to lower the cost of your prescriptions, you have options:

There are many programs to help people on Medicare manage and lower their prescription costs. PAN has prepared a guide to finding financial assistance for your prescription costs that covers federal, state, charitable, and pharmaceutical manufacturer programs. You can also review our tips for saving money on prescriptions with helpful options and resources to reduce out-of-pocket costs.

Yes, you do need to opt-in to the Medicare Prescription Payment Plan through your health insurance plan.

To start using the Medicare Prescription Payment Plan, you need to opt-in to the program through your health plan. Patients are not automatically enrolled, so if you don’t enroll, you’re not receiving this benefit! Once enrolled, and beginning in 2026, health plans are required to automatically re-enroll individuals in the payment plan. If you change plans, then you need to opt-in to the payment option with the new plan.

In fact, you can join or leave the program anytime.

You can opt-in to participate anytime during the year, not just during open enrollment. Likewise, if you want to leave the program, you can do so at any time.

You must sign up for the Medicare Prescription Payment Plan by phone or on your plan’s website, not at the pharmacy.

Currently, opting in to the Medicare Prescription Payment Plan can only be done through your health plan. The easiest way to do this is by calling your health plan or visiting their website. At this time, opting-in at the pharmacy counter is not possible. Learn more about how and when to opt-in to the plan.

If you switch Medicare plans, you will need to opt-in to the plan again—with your new insurer.

If you switch Medicare plans, you will need to opt-in to the Medicare Prescription Payment Plan with your new insurer. Make note for open enrollment! The good news is: if you don’t change plans, you will be automatically renewed into the Medicare Prescription Payment Plan by your insurer in 2026.

Medicare Prescription Payment Plan is a monthly payment plan (not an insurance plan).

The Medicare Prescription Payment Plan is not a health insurance plan. It is a voluntary program that allows Part D enrollees to spread out-of-pocket prescription medication costs throughout the year and make payments on a monthly basis. This can make expensive copay medications more affordable, for example, for patients on a fixed monthly income.

It only covers Medicare Part D costs.

The Medicare Prescription Payment Plan only covers costs associated with Part D.  It does not include medications covered under Part B. 

If you’re enrolled in the Medicare “Extra Help” program, you don’t need MPPP.

If you become enrolled in the Extra Help program, you will not need to opt-in to the Medicare Prescription Payment Plan. Extra Help covers almost all costs for enrolled patients.

You can still apply for assistance with PAN if you’re enrolled in the plan.

At the PAN Foundation, patients who have opted in to the Medicare Prescription Payment Plan can still apply for our patient assistance grant programs. Please keep in mind that we don’t provide services to help you enroll in the MPPP program, nor can we make the decision on behalf of any patient. We help educate patients and healthcare providers so they know their options.

Make sure MPPP still makes sense for you if you receive financial assistance from a charitable program. Here’s why:

If you receive assistance from a charitable patient assistance foundation that covers all or most of your out-of-pocket prescription costs, you may want to estimate whether the Medicare Prescription Payment Plan makes sense for you. However, if you are taking medications for multiple chronic conditions and cannot receive charitable assistance for all, the payment plan may be to your benefit. Read our guide to estimating your monthly payments to learn more.

No more paying at the pharmacy counter: your health plan will send you a bill.

When you opt-in to the Medicare Prescription Payment Plan, your Medicare Part D health plan will send you a monthly bill for your prescription medication copays. Your pharmacist won’t be able to tell you what you owe. If you have questions, contact your health plan.

If you miss a payment, here’s what happens:

If you miss a payment, your plan will send a reminder. If you have not paid your amount owed within two months of the due date, your plan can remove you from the Medicare Prescription Payment Plan and will send you a notice of disenrollment.