Making Sense of the Medicare Prescription Payment Program
A lot of changes have come to the Medicare Part D Drug Program for 2025. Not all of these changes are loved by those with Medicare. Due to the elimination of the coverage gap or “donut hole” many drug plans have added a drug deductible which can be as high as $590. A deductible means you pay BEFORE the insurance does. This means some beneficiaries are now having to pay $400-$500 dollars for medications upfront in January. That’s a major problem for people on fixed incomes.
While these deductibles are a one time expense, many are struggling to pay hundreds of dollars for the prescriptions they need.
Understanding The Medicare Prescription Payment Program
One way to avoid these large one time payments is to sign up for the brand new Medicare Prescription Payment Program (M3P). Once you’ve signed up, this program will allow you to pay nothing for your prescriptions at the pharmacy. Your insurance pays them, and then sends you a monthly bill allowing you to pay for it in installments from now until the end of the year.
An Example of How It Helps With a Deductible
Let’s say you take a drug with a retail price of $480 and your plan has a drug deductible of $590. Without signing up for the payment program, you’ll pay $480 upfront for your prescription. If you have signed up for the payment program you’d pay just $40 monthly each month of the year. That’s a lot more manageable.
Payments can only be spread over the remaining months of the year. That means if it’s July payments can only be split over 6 remaining months. In the previous example the $480 would be split up as 6 payments of $80 per month.
How to Sign Up?
You must sign up to use this program. All Medicare Part D drug plans have this option, so whether your insurance is through UnitedHealthcare, Humana, Blue Cross Blue Shield, Wellcare, Aetna, or some other company, you’ll have access. To sign up, call the customer service number on the back of your insurance card and tell them you’d like to sign up for the Medicare Prescription Payment Program. I helped a client sign up, and the call took just 6 minutes. Easy.
Does it Cost Anything?
No. The payment program is completely free for beneficiaries to use. There are no fees or interest charged.
What If I Want Out of the Payment Program?
You can opt out at any time. The insurance company will send you a final statement for any balance due. There is no penalty for joining then leaving the payment program.
Understand that Monthly Payments WILL Change
Understand that if you use the payment program your monthly bill from the insurance company may change from month to month. This is because, as you continue to purchase prescriptions those costs continue to add to your balance.
As an example let’s assume WITHOUT the payment program you would pay $480 for prescriptions in January, $110 in February, and $40 a month after that.
With the prescription payment program, each prescription filled will add to the monthly bill the insurance company sends. Using the payment plan for the scenario above you’d pay just $40 in January, but $50 in February, $54 in March, $58.44 in April, and by December the payment would be over $150.
Monthly Costs With and Without The Payment Program
Confusing? Yes, we know. If you’re upset about this tell your congressman!
Should you Sign Up?
You can choose whether to sign up or not. While the program has some pitfalls, we do think it will help a number of our clients smooth out their drug costs. Just beware that by the end of the year your payment may (will) have increased.