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An Easier Way for Seniors to Cover Rx Expenses

America’s seniors will soon be able to spread their prescription drug copays over 12 months, thanks to a new Medicare Part D Prescription Payment Plan.  

Previously called “smoothing,” the voluntary plan makes costs more predictable and manageable. It begins on January 1, 2025.  

Predictable Costs through a Payment Plan 

Medicare’s Part D prescription drug benefit was redesigned by the Inflation Reduction Act of 2022, which capped out-of-pocket costs at $2,000 a year. For many seniors who rely on expensive drugs, however, most or all of that $2,000 may be concentrated in the first few months of a plan year, when seniors are working toward fulfilling their deductible.    

Seniors on fixed incomes may struggle to cover those costs at the start of a new year, even if they know the burden will be lessened once they meet their deductible. Making the costs predictable, and distributing over the full calendar year, will help many seniors avoid that hardship. 

Because the program is new and voluntary, educating seniors will be a key component of the plan’s success. The Centers for Medicare and Medicaid Services plans to issue draft guidance in early 2024 on Medicare Part D enrollee outreach and education. The public will be invited to comment on the guidance. 

Easier Payments, Healthier Lives  

By spreading out-of-pocket costs over months, rather than making all cost-sharing payable at the pharmacy counter, the new prescription payment plan allows Medicare Part D enrollees to better anticipate and absorb copay costs.  

Seniors and people with disabilities can better afford their treatments, allowing them to lead healthier lives. 

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