Per CMS’s own printout this payment plan is not suggested for:

Anyone with already low prescription drug costs.

Anyone who prescription drug costs remain the same each month.

You don’t want to change how you pay for your drugs – you are not forced to do this.

You get or are Eligible for EXTRA HELP.

You get or are Eligible for a MEDICARE SAVINGS PROGRAM.

You get help from PACE/PACENET or other state agency, a coupon program, or have other prescription coverage (VA, TRICARE, etc).

AND FROM MY OPINION:

Anyone who is likely to forget that the medications they received will still be billed to them in the future. If you are likely to spend the money, instead of save it for when the bill comes in, then don’t take the chance of getting yourself into further debt.

Anyone who is likely to get confused by a bill coming for your plan premium and another bill coming for your medications.

The biggest one I see, in my opinion, is that this acts like a form of credit and people don’t always manage credit well.

If you are not paying for your prescriptions as you pick them up, and you now have extra money in your pocket that you usually don’t have, it might be more tempting to use that money for something else such as a gift for a grandchild, a few extra purchases in the pharmacy, a treat for yourself. While these are all nice things, a bill will be coming to you from your insurer (Part D Plan) for the cost of those medications, and there is no discount on the cost of the medication – it is not a money saving feature, it is supposedly a budgeting feature.

The insurers are just as new to this as you are and there are likely to be GLITCHES as insurers, and pharmacies, now have to communicate with each other about what medications you picked up and what amounts you owe. They then have to get a correct monthly statement (bill) to you.

The amount owed can change each month depending on factors such as whether you paid your entire balance off each month or not, whether you picked up additional/fewer medications, or whether you have had medication changes or cost changes.

You will also, confusingly, be receiving two bills from your insurer. One for the premium and one for the prescriptions that you picked up.

For those reaching the $2000 maximum out of pocket because of either high drug usage or having one or more high cost medications they take, the maximum out of pocket limit will definitely help lower their prescription costs.

The insurers are having to take on a higher amount of cost sharing for their Part D Enrollees and if their costs go higher, so will premiums – especially on Stand Alone Prescription Drug Plans. This is despite the Medicare Part D Premium Stabilization Provision of 6%.

Formularies – the list of drugs that are covered under the Part D Plan and what Tier they are covered under will be narrower and will require enrollees to pay more attention to make sure all their medications are covered under the plan.

Medicare currently requires that all Part D Plans must cover at least 2 drugs for every Therapeutic Category (currently there are 21 major categories such as anti-depressants, anesthetics, anti-convulsants, etc.) They often do, but insurers are not required to cover more than 2 medications in each category.

You must check to make sure that all drugs you are currently taking, and also ask your doctor about any suspected medication changes for the coming year, to make sure that they are COVERED under the plan you chose. Remember you can’t make prescription drug plan changes after December 7th for 2025.

Plans will likely be making many changes to their formularies and you may find that VALUE (low cost) plans, and even some standard plans, will have much smaller lists of covered drugs than in previous years!!! If you have a range of drugs at different Tier levels, you may have to move up to the Premium formularies (highest cost plans in terms of premium) to get them covered.

Do not just assume that your current plan will cover those medications or that your current plan will even exist in 2025!

Insurers are tightening their offerings on both Stand Alone Medicare Part D Plans and also on Medicare Advantage plans – and some plans and insurers are leaving the market altogether because of their rising costs.

When an insurer stops offering a plan (drops a plan) they will generally crosswalk you over to the plan that they feel best meets your needs and you may not agree with their choice.

If you call an insurance company, (or they call you), directly to enroll in a Stand Alone Part D Plan or Medicare Advantage Plan they will only give you a choice of the plans they offer for 2025, when another insurer may have a plan that better suits your needs and budget. You have control but so many people, because this is so incredibly confusing, often just go with whatever the insurance company they are dealing with recommends. That is not necessarily wise on your end!

For 2025 there will now be a “Medicare Prescription Payment Plan”

This plan will allow you to go to a pharmacy or use mail order, and not pay for your medications at the time you receive them.

Your insurer now has to offer you the chance to pick up your medications and get a bill, later on, from your insurer for the medications you received – essentially a buy now pay later alternative. This is designed to help you spread the costs of your medications over time, especially if your Part D Plan has a big deductible.

Phases of Coverage: 2025 Changes for Medicare Perscription Drug Coverage Part D

Part D Plans and drug manufacturers will have to pay much greater cost sharing than in previous years for those people who reach the out of pocket maximum of $2000.

There will now only be 3 phases of coverage (the Coverage Gap OR Doughnut Hole will be removed for 2025).

Deductible anywhere from $0 to $590 depending on the plan you choose.

Medicare Advantage plans are more likely to have a $0 prescription drug deductible than stand alone prescription drug plans.

Usually the higher cost stand alone plans are more likely to have $0 or low deductibles than the lower cost plans.

Initial Coverage Phase (copays or coinsurance – which is a percentage of the drug cost). Copays, usually on Tier 1, preferred generics and Tier 2, Standard Generics.

Coinsurance (a % of Cost, e.g. 25%, 50%, 33%) on Tier 3 Preferred Brand; Tier 4 Non –Preferred Brand; Tier 5 Specialty Drugs; and Tier 6 other medications/insulin. Tiers 3 through 5 may also include High Cost/Non-Preferred Generic Drugs.

This phase lasts until you reach the $2000 maximum out of pocket.

Cost sharing for members will be equal to 25%; manufacturers will discount 10%; and Part D Plans (insurers) will pay 65% of the medication costs – sound confusing?

$2000 out of pocket maximum reached by the member – the member will pay no more for medications covered under their Part D plan.

The insurer will now pay 60% of the enrollee’s drug costs, manufacturers will now pay 20% and Medicare will pay 20% of the cost of any future drugs for the year (January 1 through December 31, 2025).

For 2026 the out of pocket maximum could go higher, indexed to inflation.

Schedule an appointment with your current agent, or if you don’t have one, find one (hint – I am one!). I am saying this to you because many stand alone prescription drug plans are not even paying us any commission for working with you on these plans this year – those of us doing it for you may actually be doing it for nothing! But some of us do care about the people we serve!

Don’t just let the plan roll over because you like your current plan – there will be major changes to the plans this year due to the Inflation Reduction Act mandating a $2000 out of pocket maximum for people on Medicare Prescription Drug Plans – Stand Alone or Medicare Advantage.

Talk to doctors who are prescribing medications and ask them if they anticipate any changes in medications – get the name of the medication, the dosage, and how frequently you are going to need to take it.

Have a list of your current medications, dosages, and frequency.

Inflation Reduction Act of 2022 Mandates that beginning in 2025 Medicare enrollees will have a $2000 maximum out of pocket cap on prescription drugs under Medicare Part D Coverage – indexed each year for inflation.

It also mandates a Medicare Prescription Payment Plan be offered to enrollees.

The intention is to limit the overwhelming cost of purchasing medications, for seniors, in this country by capping their Part D costs at $2000 – this sounds like a good thing, and in some ways it is, but this will also have other effects.