Medicare Prescription Payment Plan

The Medicare Prescription Payment Plan is a new payment option under prescription drug law that helps members manage out-of-pocket Part D drug costs by spreading them across the calendar year (January–December). Anyone with a Medicare drug plan or Medicare health plan with drug coverage (such as a Medicare Advantage Plan) can use this option. All plans offer it, and participation is voluntary.

Members who select this option continue paying their plan premium (if applicable) and receive a bill from their health or drug plan for prescription drugs instead of paying at the pharmacy. There is no cost to participate.

Will This Help Me?

It depends on individual circumstances. This payment option may help manage monthly expenses but does not save money or lower drug costs.

Members most likely to benefit are those with high drug costs earlier in the calendar year.

This payment option may not be the best choice if:

• Yearly drug costs are low
• Drug costs are the same each month
• Signing up late in the calendar year (after September)
• The member doesn’t want to change how they pay for drugs
• The member gets or is eligible for Extra Help from Medicare
• The member gets or is eligible for a Medicare Savings Program

What Happens After I Sign Up?

Once the health or drug plan reviews the participation request, the member receives a confirmation letter. Then:

• When a prescription for a Part D-covered drug is filled, the plan automatically notifies the pharmacy of participation, and the member does not pay the pharmacy. However, the member remains responsible for costs.
• Each month, the plan sends a bill showing the amount owed, due date, and payment instructions. A separate bill is sent for the monthly plan premium (if applicable).

How Do I Pay My Bill?

After the plan approves participation, the member receives a letter with payment information.

What happens if I don’t pay my bill? The plan sends a reminder if a payment is missed. If the bill isn’t paid by the date in the reminder, the member is removed from the program. The member must still pay the amount owed, but no interest or fees are charged, even for late payments.

How Do I Sign Up?

Members can visit their plan’s website or call their plan:

• During 2025: Starting January 1, 2025, members can contact their plan to begin participating anytime during the calendar year.
• In 2025, for 2026: Members who want to participate for 2026 can contact their plan now; participation starts January 1, 2026.
• During 2026: Starting January 1, 2026, members can contact their plan anytime during the calendar year.

How Do I Leave?

Members can leave the program at any time by contacting their plan. Leaving does not affect Medicare drug coverage or other benefits.

• Any remaining balance must still be paid.
• The balance can be paid all at once or billed monthly.
• After leaving, new out-of-pocket drug costs are paid directly at the pharmacy.

What Programs Can Help Lower My Costs?

Extra Help — A Medicare program that helps pay drug costs. Visit ssa.gov/medicare/part-d-extra-help to check eligibility and apply.

Medicare Savings Programs — State-run programs that may help pay some or all premiums, deductibles, copayments, and coinsurance.

State Pharmaceutical Assistance Programs (SPAPs) — May cover drug plan premiums and/or cost sharing.

Manufacturer Pharmaceutical Assistance Programs (PAPs) — Drug manufacturer programs to help lower costs for people with Medicare.

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This page was last updated on October 1, 2025.