What’s Prescription Payment Plan?

When you fill a prescription for a drug covered by Medicare Part D, and you choose to participate in this program, you will not have to pay the applicable copayment or coinsurance at your pharmacy (including mail-order and specialty pharmacies). Instead, you will receive a bill each month from your Medicare health or drug plan.

Even though you will not pay for your medications at the pharmacy, you will still be responsible for the costs. If you want to know how much your medication will cost before you take it home, it’s important to ask your pharmacist or call your health plan.

This payment option might help you manage your monthly expenses, but it does not save you money or reduce the cost of your medications. Learn about Extra Help and other programs that may save you money, if you qualify.

Your monthly bill will be based on what you would have paid for any medication you obtain, plus the previous month’s balance, divided by the number of months left in the year. All plans use the same formula to calculate monthly payments.

To learn more, go to the Examples of how a monthly bill is calculated section.

Your payments may change each month, so you may not know in advance what your exact bill amount will be. Future payments may increase when you fill a new prescription (or refill an existing prescription) because as new out-of-pocket expenses are added to your monthly payment, there are fewer months in the year to spread out your remaining payments.

In a single year, you will never pay more than:

• The total amount you would have paid out of pocket to the pharmacy if you did not participate in this payment option.
• The maximum annual out-of-pocket cost for Medicare drug coverage ($2,000 in 2025).

The law limits the out-of-pocket costs of medications to $2,000 in 2025. This is true for everyone with Medicare drug coverage, even if they do not participate in the Medicare Prescription Payment Plan.

It depends on your situation. Remember, this payment option may help you manage your monthly expenses, but it doesn’t help you save money or reduce your medication costs.

You are more likely to benefit from participating in the Medicare Prescription Payment Plan if you have high drug costs at the beginning of the year. Although you can start participating in this payment option at any time during the year, starting early in the year (like before September) allows you more months to spread out your drug costs. Visit Medicare.gov/prescription-payment-plan/will-this-help-me for more information and to see if you can benefit from this payment option

This payment option may not be the best choice for you if:

• Your yearly drug costs are low.
• Your drug costs are the same each month.
• You’re considering signing up for the payment option late in the year (after September).
• You don’t want to change how you pay for your drugs.
• You get or are eligible for Extra Help from Medicare.
• You get or are eligible for a Medicare Savings Program.
• You get help paying for your drugs from other organizations, like a State Pharmaceutical Assistance Program (SPAP), a coupon program, or other health coverage.

For more information, go to section What programs may help reduce your drug costs?.

• Your Medicare health or drug plan: Call your plan for more information. If you need to urgently pick up a prescription, call your plan to evaluate your options.
• Medicare: Visit Medicare.gov/prescription-payment-plan to learn more about this payment option and see if it’s right for you
• State Health Insurance Assistance Program (SHIP): Visit shiphelp.org to get the phone number of your local SHIP and get free, personalized health insurance advice.

Register at caremark.com/mppp or call 1-833-507-7755 Monday to Friday from 8:00 p.m., Saturdays from 8:30 a.m. to 7:00 p.m. and Sundays from 9:00 a.m. to 6:00 p.m., TTY/TDD users with equipment can call 1-855-296-8965, to start participating in this payment option beginning January 1, 2025.

Remember, this payment option may not be the best option for you if you sign up late in the year (after September). This is because as new out-of-pocket drug costs are added to your monthly payment, there are fewer months left in the year to spread out your payments.

Once your Medicare health or drug plan reviews your request to participate, they will send you a letter confirming your participation in the Medicare Prescription Payment Plan. So:

1. When you fill a prescription for a covered Part D drug, your plan will automatically tell the pharmacy that you are participating in this payment option, and you will not pay the pharmacy for the prescription (drugs).

   Although you will not pay for your medications at the pharmacy, you will still be responsible for the costs. If you want to know how much your medication will cost before you take it home, ask your pharmacist or call your plan.

2. Each month, your plan will send you a bill with the amount you owe for your prescriptions, the due date, and information on how to make a payment. You will receive a separate bill for your monthly plan premium (if you have one).

After your Medicare health or drug plan approves your participation in the Medicare Prescription Payment Plan, you will receive a letter from your plan with information about how to pay your bill.

You’ll get a reminder from your Medicare health or drug plan if you miss a payment. If you do not pay your bill by the date indicated on that reminder, you will be removed from the Medicare Prescription Payment Plan. You must pay the amount due, but you will not pay any interest or penalty, even if your payment is late. You can choose to pay that amount all at once or be billed monthly. If you no longer qualify for the Medicare Prescription Payment Plan, you will remain enrolled in your Medicare health or drug plan.

Always pay the monthly premium for your health or drug plan first (if you have one), so you don’t lose your drug coverage. If you are worried about paying both your monthly plan premium and your Medicare Prescription Payment Plan bills, for more information, visit the section What programs can help reduce your medication costs?

Call your plan if you think they made a mistake with your Medicare Prescription Payment Plan bill. If you think they made a mistake, you have the right to follow the complaint process found in your Member Handbook or your Evidence of Coverage.

You can leave the Medicare Prescription Payment Plan at any time by contacting your Medicare health or drug plan. Canceling will not affect your Medicare drug coverage or other Medicare benefits. Please note:

• If you still owe a balance, you must pay the amount owed, even if you no longer participate in this payment option.
• You can choose to pay your balance all at once or be billed monthly.
• You will go back to paying the pharmacy directly for new out-of-pocket drug costs after you leave the Medicare Prescription Payment Plan.

If you change your current plan or switch to a new Medicare drug plan or a Medicare health plan with drug coverage (such as a Medicare Advantage plan with drug coverage), your participation in the Medicare Prescription Payment Plan will end.

Contact your new plan if you want to participate in the Medicare Prescription Payment Plan with them again.

You take several high-cost drugs that have a total out-of-pocket cost of $500 each month. In January 2025, you join the Medicare Prescription Payment Plan through your Medicare drug plan or Medicare Advantage health plan with drug coverage.

• First, we figure out your “maximum possible payment” for the first month
  $2,000 [annual out-of-pocket maximum]
  - $0 [no out-of-pocket costs before using this payment option]
  = $2,000
  ____________________________________________________
  12 [remaining months in the year] = $166.67 [your "maximum possible payment" for the first month]
• Then, we figure out what you’ll pay for January:
  • Compare your total out-of-pocket costs for January ($500) to the “maximum possible payment” we just calculated: $166.67
  • Your plan will bill you the lesser of the two amounts. So, you’ll pay $166.67 for the month of January.
  • You have a remaining balance of $333.33 ($500-$166.67).

For February and the rest of the months left in the year, we calculate your payment differently:

We’ll calculate your March payment like we did for February:

In April, when you refill your prescriptions again, you’ll reach the annual out-of- pocket maximum for the year ($2,000 in 2025). You’ll continue to pay what you already owe and get your prescription(s), but after April you won’t add any new out- of-pocket costs to your bill for the rest of the year.

You take several drugs that have a total out-of-pocket cost of $80 each month. In January 2025, you join the Medicare Prescription Payment Plan through your Medicare drug plan or Medicare Advantage health plan with drug coverage.

We calculate your first month’s bill in the Medicare Prescription Payment Plan differently than your bill for the rest of the months in the year:

• First, we figure out your “maximum possible payment” for the first month:
  $2,000 [annual out-of-pocket maximum]
  - $0 [no out-of-pocket costs before using this payment option]
  = $2,000
  ____________________________________________________
  12 [remaining months in the year] = $166.67 [your “maximum possible payment” for the first month]
• Then, we figure out what you’ll pay for January:
  • Compare your total out-of-pocket costs for January ($80) to the “maximum possible payment” we just calculated: $166.67
  • Your plan will bill you the lesser of the two amounts. So, you’ll pay $80 for the month of January
  • You have a remaining balance of $0

For February and the rest of the months left in the year, we calculate your payment differently

We’ll calculate your March payment like we did for February:

You pay $4 every month in out-of-pocket costs for a prescription you use regularly. In April 2025, you need a new one-time prescription that costs $613, so your total out-of-pocket costs in April are $617. That same month, before you fill your prescriptions, you decide to participate in the Medicare Prescription Payment Plan through your Medicare drug plan or Medicare health plan with drug coverage.

We calculate your first month’s bill in the Medicare Prescription Payment Plan differently than your bill for the rest of the months in the year:

• First, we figure out your “maximum possible payment” for the first month:
  $2,000 [annual out-of-pocket maximum]
  - $12 [your out-of-pocket costs before using this payment option]
  = $1,988
  ____________________________________________________
  9 [remaining months in the year] = $220.89 [your "maximum possible payment" for the first month]
• Then, we figure out what you’ll pay for April:
  • Compare your total out-of-pocket costs for April ($617) to the “maximum possible payment” we just calculated: $220.89.
  • Your plan will bill you the lesser of the two amounts: So, you’ll pay $220.89 for the month of April.
  • You have a remaining balance of $396.11 ($617 – $220.89).

For May and the rest of the months left in the year, we calculate your payment differently: