Medicare Prescription Payment Plan
Starting in 2025, the structure of Medicare Part D benefit will be redesigned to reflect provisions of the Inflation Reduction Act of 2022 (IRA). These updates will include the following:
- A lower annual out-of-pocket (OOP) threshold of $2,100
- A newly defined standard Part D benefit design consisting of three phases: annual deductible (if the plan has one), initial coverage, and catastrophic coverage
- The end of the Coverage Gap stage (also known as the “Donut Hole”)
- The establishment of the Medicare Prescription Payment Plan
The Medicare Prescription Payment Plan is a new payment option in the prescription drug law that works with your current drug coverage to help you manage your out-of-pocket Medicare Part D drug costs by spreading them across the calendar year (January-December). Starting in 2025, anyone with a Medicare drug plan or Medicare health plan with drug coverage (like a Medicare Advantage Plan with drug coverage) can use this payment option. All plans offer this payment option and participation is voluntary.
If you select this payment option, each month you’ll continue to pay your plan premium (if you have one), and you’ll get a bill from your health or drug plan to pay for your prescription drugs (instead of paying the pharmacy). There’s no cost to participate in the Medicare Prescription Payment Plan, and you won’t pay any interest or fees on the amount you owe, even if your payment is late.
How is my monthly bill calculated?
Your monthly bill is based on what you would have paid for any prescriptions you get, plus your previous month’s balance, divided by the number of months left in the year. All plans use the same formula to calculate your monthly payments.
Will this help me?
It depends on your situation. Remember, this payment option might help you manage your monthly expenses, but it doesn’t save you money or lower your drug costs. You’re most likely to benefit from participating in the Medicare Prescription Payment Plan if you have high drug costs earlier in the calendar year. Although you can start participating in this payment option at any time in the year, starting earlier in the year (like before September), gives you more months to spread out your drug costs.
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 calendar 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.
Go to Medicare.gov/prescription-payment-plan/will-this-help-me to answer a few questions, and find out if you’re likely to benefit from this payment option.
How will my costs work?
This payment option might help you manage your monthly expenses, but it doesn’t save you money or lower your drug costs. There’s no cost to participate in the Medicare Prescription Payment Plan, and you won’t pay any interest or fees on the amount you owe, even if your payment is late.
The prescription drug law caps your out-of-pocket costs at $2,100 in 2026. This means you’ll never pay more than $2,100 in out-of-pocket drug costs in 2026. This is true for everyone with Medicare drug coverage, even if you don’t join the Medicare Prescription Payment Plan.
When you fill a prescription for a drug covered by Part D, you won’t pay your pharmacy (including mail order and specialty pharmacies). Instead, you’ll get a bill each month from your health or drug plan. Your monthly bill is based on what you would have paid for any prescriptions you get, plus your previous month’s balance, divided by the number of months left in the year.
Even though you won’t pay for your drugs at the pharmacy, you’re still responsible for the costs. If you want to know what your drug will cost before you take it home, call your plan or ask the pharmacist.
What happens if I don’t pay my bill?
You’ll get a reminder from your health or drug plan if you miss a payment. If you don’t pay your bill by the date listed in that reminder, you’ll be removed from the Medicare Prescription Payment Plan. You’re required to pay the amount you owe, but you won’t pay any interest or fees, even if your payment is late. You can choose to pay that amount all at once or be billed monthly. If you’re removed from the Medicare Prescription Payment Plan, you’ll still be enrolled in your Medicare health or drug plan.
How do I sign up?
Complete the election request form and submit in your Member Portal, mail to the address on the form, or call customer service to start participating in this payment option:
- In 2025, for 2026: If you want to participate in the Medicare Prescription Payment Plan for 2026, contact Customer Service now. Your participation will start January 1, 2026.
- During 2026: Starting January 2026, you can contact Customer Service to start participating in the Medicare Prescription Payment Plan anytime during the calendar year.
Remember, this payment option may not be the best choice for you if you sign up late in the calendar 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.
Ways to sign up
- Print, complete, and submit our Medicare Prescription Payment Plan Enrollment Form
- Call us at 1-855-752-3796 (TTY 711)
- Log into your Member Portal
How do I leave?
You can leave the Medicare Prescription Payment Plan at any time by contacting customer service. Leaving won’t affect your Medicare drug coverage and other Medicare benefits. Keep in mind:
- If you still owe a balance, you’re required to pay the amount you owe, even though you’re no longer participating in this payment option.
- You can choose to pay your balance all at once or be billed monthly.
- You’ll pay the pharmacy directly for new out-of-pocket drug costs after you leave the Medicare Prescription Payment Plan.
What if you need to pick up a prescription urgently?
If you urgently need a prescription and have already paid for it before joining the Medicare Prescription Payment Plan, the health plan must allow you to retroactively join the plan if two things happen:
- You believe that waiting the usual 24 hours to join could seriously harm your health.
- You ask to join within 72 hours of when you paid for your urgent prescription.
If these conditions are met, the plan must process your request and reimburse you for what you paid for the prescription within 45 days. If you miss the 72-hour deadline, the plan will let you know and tell you how to file a complaint if needed.
Keep in mind that participating in the payment plan does not lower the cost of your prescriptions; you will still be responsible for the amount owed at the pharmacy. The payment option simply allows you to spread the total cost owed over the remaining months of the calendar year.
For assistance or more information about opting into the Medicare Prescription Payment Plan, contact the health plan’s customer service.
How Do I File a Complaint or Grievance?
Call Customer Service if you think we made a mistake about your Medicare Prescription Payment Plan bill. If you think there is a mistake, you have the right to follow the grievance process found in your Member Handbook or Evidence of Coverage.
If you have a grievance, we encourage you to first call the Customer Service team at the number listed in your Evidence of Coverage. We will try and resolve any complaint that you might have over the phone. If you request a written response to your phone complaint, we will respond in writing to you. You can submit a grievance over the phone or in writing within 60 calendar days from the date of the event. You can call us at 855-752-3796 (TTY 711), Monday – Friday, 8 a.m. to 8 p.m., or from October 1 – March 31, 8 a.m. to 8 p.m. seven days a week. Or you can send it to us in writing by faxing to 417-269-2949 Attention Medicare Appeals and Grievance Dept, or by mailing to:
Phelps Health Medicare Advantage
Attn: Appeals and Grievance Department
PO. Box 5750
Springfield, MO 65801-5750
We will complete an investigation of your grievance as quickly as your case requires and send you a letter about this no later than 30 calendar days from the date we received your request. If we need more time to investigate the situation, we will let you know about that extension prior to the end of the initial 30-day period.
Where can I get more information?
- Phelps Health Medicare Advantage Plan: Members can contact customer service at 1-855-752-3796 (TTY users may call 711).
- Medicare: Visit Medicare.gov/prescription-payment-plan, or call 1-800-MEDICARE (1800-633-4227), 24 hours a day, 7 days a week. TTY users can call 1-877-486-2048.
- State Health Insurance Assistance Program (SHIP): Visit shiphelp.org to get the phone number for your local SHIP and get free, personalized health insurance counseling.
What program can help lower my costs?
The new prescription drug law, the Inflation Reduction Act, expanded the Extra Help program. Now, people with Medicare may qualify for even more savings on their prescription drug costs. The Extra Help program helps pay Medicare drug coverage (Part D) costs, like premiums, deductibles (if the plan has one), and other out-of-pocket costs.
People with limited incomes may qualify for extra help to pay for their prescription drug costs: the low-income subsidy, or LIS.
You may be eligible for lower cost sharing for your prescriptions.
If you aren’t getting extra help, you can see if you qualify by calling:
- 1-800-Medicare or TTY users call 1-877-486-2048 (24 hours a day/7 days a week),
- Your State Medicaid Office, or
- The Social Security Administration at 1-800-772-1213. TTY users should call 1-800-325-0778 between 7 a.m. and 7 p.m., Monday through Friday.
Visit Medicare.gov/basics/costs/help/drug–costs to learn about programs that can help lower your drug costs.
This Medicare Prescription Payment Plan option may not be the best choice for you if you get or are eligible for Extra Help from Medicare.
The Extra Help program is separate from the Medicare Prescription Payment program. If you would like more information about the Extra help program call Customer Service at 1-855-752-3796 (TTY users may call 711).