In January, my buddy Lou's doctor put him on a new heart medicine. Great medicine. Terrible price. At the pharmacy counter, the first fill of the year cost him $610 out of pocket because of his drug plan's deductible and coinsurance. Lou lives on a fixed income. He stood there with his wallet open, doing math in his head.
The pharmacist leaned over and asked, "Have you heard of the Medicare Prescription Payment Plan?" Lou hadn't. She explained that instead of paying hundreds of dollars at the counter, he could pay his drug costs in smaller monthly bills spread over the rest of the year.
Well, folks, Lou signed up that week. He didn't pay less in total. But he could finally breathe in January.
What is the Medicare Prescription Payment Plan?
It's a free, voluntary option offered by every Medicare drug plan, including Medicare Advantage plans with drug coverage. According to Medicare's page on the program, instead of paying your out-of-pocket costs at the pharmacy, you pay $0 at the counter for covered drugs and get a monthly bill from your plan.
There's no interest and no fee to join. Your monthly plan premium is still separate and paid the usual way.
Does it lower my drug costs?
No, and this is the most important thing to understand. In plain words, without the plan, Lou would have paid $610 at the pharmacy all at once in January. With the plan, he paid $0 at the pharmacy, and that $610 was spread into bills of roughly $51 a month across the year. That's just an example. Your bills depend on your medicines and when you join. But the total is the same either way.
So it's a way to manage timing, not a way to save money. If the total cost is too much, you need a different kind of help, which I'll get to below.
Who does the payment plan help most?
It helps most if you have high drug costs early in the year, especially if you'll likely hit the Part D out-of-pocket cap. It helps less if your drug costs are low or spread evenly, or if you join late in the year, because there are fewer months left to spread the bills over.
Put simply, the payment plan may help if you have big drug costs early in the year, expect to hit the cap, or find large one-time pharmacy bills hard to handle. It's less helpful if your drug costs are low, if you join late in the year, or if you can't afford the total cost at all.
How do I sign up?
Call the number on your drug plan card, or check your plan's website, and ask to join the Medicare Prescription Payment Plan. You can join anytime during the year. Ask your plan for an estimate of your monthly bills first, and ask what happens if you miss a payment. If you stop paying, you can be removed from the program, and you'd still owe the balance.
If the total cost is the real problem, check whether you qualify for Extra Help, which actually lowers what you pay. And with open enrollment starting October 15, it's a good time to compare drug plans for next year.
How Lou's year went
Lou's monthly bill from his plan came each month, about the size of his phone bill. He hit the Part D cap by late spring, and after that his heart medicine cost nothing more for the year, though he kept paying off what he owed in those small bills. "Same money," Lou says. "Just no heart attack at the pharmacy counter."
Sometimes the problem isn't the price, folks. It's the timing. Now you know there's a fix for that.
Have you tried the Medicare Prescription Payment Plan? Tell us in the comments whether it helped.
