Understanding the Medicare Prescription Payment Plan

What is the Medicare Prescription Payment Plan?

The Medicare Prescription Payment Plan is a voluntary Medicare Part D payment option that went into effect on January 1, 2025. You can use it with a stand-alone Medicare drug plan or a Medicare Advantage plan that includes prescription drug coverage. Patients must opt-in to participate in the payment plan. It is not automatic.

This program lets you spread your out-of-pocket drug payments throughout the calendar year but won’t lower them. After your participation begins, you pay $0 to the pharmacy for covered Part D medications. Your health or drug plan sends you a monthly bill instead.

All Medicare plans that include Part D drug coverage must offer this payment option. Anyone enrolled in one of these plans can choose to participate. Enrollment is not based on income, and joining is not automatic the first time.

You can join the program through your Medicare Part D drug plan, and anyone with a Part D plan is eligible to participate.

How does the payment plan work with the Part D cap?

In 2027, the annual out-of-pocket limit for medications covered by Part D is $2,400. This limit applies whether or not you use the Medicare Prescription Payment Plan. The payment plan does not raise or lower the limit.

• Visit the Medicare Prescription Payment Plan website.
• Read our guide to the Medicare Part D cap.

Is the Medicare Prescription Payment Plan right for me?

Your plan will give you information about this payment option. It may also contact you if your prescription costs suggest that spreading payments across the year could be helpful.

For example, your plan or pharmacy may notify you if you’ve spent $600 or more out-of-pocket for one covered Part D prescription. They may also contact you before a new plan year if you had at least $2,400 in out-of-pocket costs for covered Part D medications during the first nine months of the current year.

You do not need to receive a notice or meet either amount to participate. If you think the payment option may help, contact your plan. Information about this program is also on Medicare.gov and in your “Medicare & You” handbook.

You may want to consider participating if:

• You have a hard time paying your out-of-pocket drug costs all at once.
• You paid over $2,400 in out-of-pocket drug costs in the first nine months of last year.
• You have had a single prescription cost of at least $600.
• You are not eligible for programs that would significantly reduce your out-of-pocket costs.
• You want to budget and spread your out-of-pocket drug costs throughout the year.

Options to consider before signing up

Before deciding to opt-in to the Medicare Prescription Payment Plan, you should check if you’re eligible for patient financial assistance programs that can lower your out-of-pocket costs for prescription medications. These include:

• Federal government programs, such as the Extra Help program
• State government programs, such as State Pharmaceutical Assistance Programs and Medicare Savings Programs.
• Charitable Patient Assistance programs, such as the Patient Advocate Foundation’s TotalAssist program, which provide grants to eligible people with serious or chronic conditions to help with certain out-of-pocket healthcare costs.

Can I receive patient assistance and also opt-in to the Medicare Prescription Payment Plan?

Yes. You can participate in the Medicare Prescription Payment Plan and receive a charitable assistant grant. Using one program does not prevent you from using the other But if you receive assistance from a charitable foundation for some or all of your medication costs, you may not benefit from this program.

If you get charitable financial assistance for a Part D covered drug, that assistance will apply to the cost of the medication first, before pharmacies submit final costs (transactions) to your Part D plan.

How to opt-in to the Medicare Prescription Payment Plan

How do I join?

Contact the Medicare health or drug plan that provides your Part D coverage. You can:

• Call your plan. The phone number is on your member ID card.
• Visit your plan’s website. Look for information about the Medicare Prescription Payment Plan.

You will need to complete a Medicare Prescription Payment Plan Participation Request Form. Once submitted, you will get confirmation from your plan that you have been successfully enrolled in the program as of a certain date.

When to opt-in the Medicare Prescription Payment Plan

You can sign up for this payment option anytime throughout the year, including during Medicare open enrollment, but the best time to join is prior to the plan year or at the beginning of the plan year. This will give you more months to spread out your costs. If you sign up in September, for example, there aren’t very many months left in the year to spread out your payments.

Do I need to opt in each year?

Automatic renewals began in 2026. If you participate in the Medicare Prescription Payment Plan and stay with the same Medicare drug plan, your participation will continue into 2027 unless you choose to leave.

You must opt-in again if you switch mid-year to a different Part D plan benefit package with the same sponsor

If you opt-in to the Medicare Prescription Payment Plan and switch mid-year to a different plan benefit package (PBP) offered by the same Part D sponsor, your participation in the payment plan will end and you must opt-in again. To opt in again, call the number on the back of your new plan card or visit your new plan’s website.

After I sign up, how does it work at the pharmacy?

Once you have received confirmation from your plan that you are opted-in to the Medicare Prescription Payment Plan, you will continue to get your medications covered by Part D from the pharmacy (including mail-order and specialty pharmacies) but will not pay anything at that time.

Your Part D plan will let your pharmacy know that you are participating in this program, and the plan will bill you separately month-to-month for your prescription costs. Each month, your plan will send you a bill with the amount you owe, when payment is due, and how to make a payment.

This bill is separate from your monthly Medicare health or drug plan premium.

Estimating your monthly payments

Your monthly bill will be based on what you would have paid for any prescriptions you get, plus your previous month’s balance, divided by the number of months left in the year.

Example scenario:

Mary fills a prescription at the pharmacy in February. The out-of-pocket cost sharing for this prescription is $1,030. Mary had zero ($0) prescription out-of-pocket costs in January.

If there are no additional costs for the remainder of the year, Mary’s monthly bill will be calculated as follows:

$1,030 (February costs) + $0 (January costs)/11 (months remaining in year, including February) = $93.64 / month

Month	Out-of-pocket costs	Maximum monthly cap	Patient’s monthly payment
January	$0	$1,66.67	$0
February	$1,030	$93.64	$93.64
March	$0	$93.64	$93.64
April	$0	$93.64	$93.64
May	$0	$93.64	$93.64
June	$0	$93.64	$93.64
July	$0	$93.64	$93.64
August	$0	$93.64	$93.64
September	$0	$93.64	$93.64
October	$0	$93.64	$93.64
November	$0	$93.64	$93.64
December	$0	$93.64	$93.64
Total:	$1,030		$1,030

And remember, your payments may change from month to month. Future payments may increase if you fill a new prescription or refill an existing prescription because as new out-of-pocket costs are added to your monthly payment, there are fewer months left in the year to spread out your payments.

It is important to note that there is no interest on your monthly payments.

Will the payment plan affect my annual Medicare Part D cap?

No. Regardless of what you may spend month-to-month, by the time you reach December 31, you will not have paid more than the annual limit under the Medicare Part D cap (e.g., $2,400 in 2027). The Part D annual out-of-pocket cap still applies even if you decide not to opt-in to the payment plan, and even if you decide to leave it.

How does the Medicare Prescription Payment Plan work if I have secondary insurance?

Payments made on your behalf through secondary insurance will be taken into account before the Part D plan calculates what you will owe through the Medicare Prescription Payment Plan.

What if I miss a payment?

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.

Being removed from the program does not end your Medicare health or drug coverage. You will still owe the unpaid balance, but you will not be charged interest or late fees. You can pay the balance all at once or continue to be billed monthly. For new prescriptions, you will pay the pharmacy directly.

You should contact your Part D plan if you think there has been a mistake in your bill or if you are having difficulty paying your bill.

Important: Always pay your prescription drug plan premium first so that you don’t lose coverage of your Medicare Part D medications.

Can I leave the plan?

Yes, you can leave the program at any time by contacting your plan. Leaving the program will not affect your Medicare drug coverage or other Medicare benefits.

If you leave the Medicare Prescription Payment Plan, you will be asked to pay your outstanding balance—which you can do all at once or monthly. Once you leave the program, you will go back to paying your pharmacy directly for your prescription medications.

If you want to join the program again after you have left, you can contact your plan.

If you leave or change your Medicare Part D plan, your participation in the Medicare Prescription Payment Plan will end and you will need to contact your new plan to rejoin.

Where to get more help with the Medicare Prescription Payment Plan

• Medicare’s website about the Medicare Prescription Payment Plan has more information, plan details, and a video about how it works.  
• Visit your health plan’s website or call your plan; their phone number is on the back of your membership card. 
• Visit Medicare.gov or call 1-800-MEDICARE (1-800-633-4227). TTY users: 1-877-486-2048. 
• Visit the State Health Insurance Program website to get the phone number for your local SHIP and get free, personalized health insurance counseling. 

Get help

I need help paying for care

Charitable patient assistance programs, like Patient Advocate Foundation’s TotalAssist, provide grants to eligible people with serious or chronic conditions.

• Medication copays
• Coinsurance
• Deductibles
• Health insurance premiums and
• Certain treatment-related costs

Check the fund for your condition to learn what it covers and whether you may qualify.

I need a different kind of help

Health insurance can be confusing. You do not have to figure it out alone. Find other help and support