New for 2025 - A Payment Plan for Prescription Drugs 

Beginning in January 2025, the Medicare Prescription Payment Plan (MPPP) will allow Medicare beneficiaries to budget for eligible high-cost Medicare Part D medications annually. Established by the Inflation Reduction Act of 2022, all beneficiaries who enroll in this program will be billed by their Medicare Prescription Drug Plan instead of paying prescription co-pays/co-insurances at the pharmacy. The payment plans will eliminate high out-of-pocket costs for beneficiaries at the pharmacy and instead provide a more manageable payment plan for these medications. This program coincides with another new feature of prescription drug plans, eliminating the coverage gap or “donut hole” in 2025, and capping the total cost of eligible prescription drugs to no more than $2,000 annually for Medicare beneficiaries.

 

How it Works:

 

 

• Spreading Costs: Medication co-pays/co-insurances, especially for beneficiaries spending $2,000 in Part D prescriptions across the year, would be spread evenly throughout the calendar year. For example, this program eliminates the financial burden of the high cost of brand-name prescriptions during a prescription drug plan's deductible phase, which can be as high as $590 in 2025. 

   

• Monthly Payments: This means making smaller, more manageable payments throughout the year for expensive medications. The insurance company would bill beneficiaries, and they would be eligible to set up a payment plan for the year.

   

• Eligible prescriptions: Medications covered by the Medicare program AND included in the Medicare Advantage Plan (Part C) or standalone Prescription Drug Plan (Part D) formulary.  All beneficiaries should check their plan’s formulary during the Annual Election Period on October 15th and December 7th to ensure their medications will be covered for January 1, 2025.

   

Benefits:

 

 

• Budgeting: The MPPP can help beneficiaries better budget their prescription expenses yearly through a standardized payment plan.

   

• Reduced Financial Burden: In February, Kaiser Family Foundation released a report demonstrating that spreading out costs can alleviate the financial burden of unexpected prescription drug expenses for tens of thousands of Medicare beneficiaries in New Jersey.

   

• Increased Access: For some beneficiaries, the MPPP may make it easier to afford necessary medications.

   

Availability:

 

 

• All Part D and Medicare Advantage Plans: All Medicare Part D and Medicare Advantage plans that include prescription coverage must offer the MPPP.  Beneficiaries will receive information on enrolling in the MPPP in Fall 2024.

   

Enrollment:

 

 

• You will have to opt in to this program.  Prescription drug plans will be reaching out regarding how to sign up. You can enroll in the program at any time of the year.

   

Here are some resources that can help:

 

• Medicare.gov: The official Medicare website has information about the MPPP and other Medicare benefits.

   

• Your Medicare Part D Plan: Contact your plan directly for personalized assistance and to enroll in the payment plan for 2025.

   

New Jersey Medicare Brokers is here to help our clients navigate this new payment program. We will continue to pass on information as it becomes available.