The Medicare Prescription Payment Plan, established by the Inflation Reduction Act of 2022 and scheduled to begin January 1, 2025, is intended to help Medicare Part D enrollees manage the financial responsibility associated with out-of-pocket (OOP) costs for their prescription medications. This program provides Medicare Part D enrollees with the option to pay copayments or coinsurance for their prescription drugs in monthly amounts, rather than paying the full copayment or coinsurance at the pharmacy.
This program can be helpful for members who incur high out-of-pocket costs for Part D drugs $600 or more at the beginning of the year. The member that selects this payment option will continue to pay their plan premium each month (if they have one) and will receive a bill from MCS Classicare to pay for their prescriptions (instead of paying the pharmacy). All Medicare Advantage plans will offer this payment option, and participation is voluntary. This payment option might help you manage your expenses, but it doesn’t save you money or lower your medication costs.
The new Part D drug coverage model caps a member’s out of pocket costs at $2,000 in 2025 and eliminates the coverage gap phase (known as the “coverage gap” or “donut hole”). This means you’ll never pay more than $2,000 in out-of-pocket costs for medications in 2025. This is true for everyone with Medicare Part D drug coverage, even if you don’t enroll in the Medicare Prescription Payment Plan. If you enroll in the program, when you get a prescription for a Part D covered drug, you won’t pay the pharmacy (including mail-order and specialty pharmacies). Instead, your health plan will pay the pharmacy the full cost of the prescription, including the participant’s copay or coinsurance, and then you will receive a bill each month from MCS Classicare. Your monthly bill is based on what you would have paid for any prescriptions you get, plus the previous month’s balance, divided by the number of months left in the year.
Note: Your payments may change each month, so you may not know your exact bill in advance. Future payments may increase when you fill a new prescription or refill an existing prescription because as new costs are added to your monthly payment, there are fewer months left in the year to spread out your remaining payments.
This payment option may not be the best option for you if:
The Medicare Prescription Payment Plan allows participants to manage their out-of-pocket costs for covered Part D drugs throughout the year (January – December) through monthly billing. Until the participant opts into the program and incurs OOP costs for covered drugs, they will not receive any monthly bills under this program.
Once out-of-pocket costs are incurred, in either the deductible phase or the initial coverage phase, subsequent OOP costs for covered Part D drugs will be billed monthly while the participant remains in the program. The calculations do not reduce the total costs that a participant will pay over the year; instead, participants in the Medicare Prescription Payment Plan can spread their OOP costs for throughout the year (January – December) calculated according to the formula established in the Inflation Reduction Act of 2022.
It's important to note that opting into the program facilitates the spreading of OOP costs over the year; however, the total incurred costs and the timing of True Out-of-Pocket (TrOOP) Expenditure accrual do not change.
For participants obtaining prescriptions for extended periods (e.g., 90-day supplies), the entire OOP cost of such prescriptions is attributed to the month the prescription was filled, not distributed over the duration covered by the prescription. For example, if a participant incurs $300 in OOP costs for a 90-day supply dispensed in January, the full $300 is considered incurred in January.
You take several high-cost drugs that have a total out-of-pocket cost of $500 each month. In January 2025, you join the Medicare Prescription Payment Plan through your MCS Classicare health plan with drug coverage.
We calculate your first month’s bill in the Medicare Prescription Payment Plan differently than your bill for the rest of the months in the year:
For February and the rest of the months left in the year, we calculate your payment differently:
We’ll calculate your March payment like we did for February:
In April, when you refill your prescriptions again, you’ll reach the annual out-of-pocket maximum for the year ($2,000 in 2025). You’ll continue to pay what you already owe and get your prescription(s), but after April you won’t add any new out-of-pocket costs for the rest of the year.
Even though your payment varies each month, by the end of the year, you’ll never pay more than:
The total amount you would have paid out-of-pocket.
The total annual out-of-pocket maximum ($2,000 in 2025).
However, if you are not able to make the payments each month your monthly payments can increase due to accrued OOP costs not paid. You won’t pay any interest or fees, even if your payment is late.
Remember, this is just your monthly payment for your out-of-pocket drug costs. You still need to pay your health or drug plan’s premium (if you have one) each month. And if applicable, your Part D late enrollment penalty (LEP) each month.
You pay $4 every month in out-of-pocket costs for a prescription you use regularly. In April 2025, you need a new one-time prescription that costs $613, so your total out-of-pocket costs in April are $617. That same month (April), before you fill your prescriptions, you decide to participate in the Medicare Prescription Payment Plan through your MCS Classicare health plan with drug coverage.
For May and the rest of the months left in the year, we calculate your payment differently:
Your payments will vary throughout the year. That’s because you’re adding drug costs during the year, but you have fewer months left in the year to spread your payments across. However, if you are not able to make the payments each month your monthly payments can increase due to accrued OOP costs not paid. You won’t pay any interest or fees, even if your payment is late.
By the end of the year, you’ll never pay more than:
Part D members with high OOP costs earlier in the plan year are more likely to benefit from the Medicare Prescription Payment Plan. Since this program permits members to pay for their Part D medications during the calendar year (January to December), enrollees with high prescription drug cost-sharing will likely benefit most. The two groups that will most likely benefit from the Medicare Prescription Payment Plan will be:
This program is not for everyone, as it does not save the enrollee money or reduce the cost of their medications. The member should consider other alternate programs that could lower their drug costs.
The Medicare Prescription Payment Plan is NOT available for drugs covered by Medicare Part B.
Usually, the drugs covered under Part B are drugs that you would not give yourself, such as drugs you get by injection, by infusion (serum) in the doctor’s office or an outpatient setting, or for insulins given through an infusion pump.
In 2025, the Medicare Prescription Payment Plan will be implemented by the Centers for Medicare & Medicaid Services (CMS) to support members who participate in Medicare Part D Prescription drug plans. As members, it is crucial to understand the financial implications for enrollees under this new program:
It is crucial for members of the Medicare Prescription Payment Plan to comply with paying their monthly bills promptly. MCS Classicare has established processes to ensure compliance with payment deadlines and to address situations where payments are not received on time. Not paying monthly bills may lead to the involuntary termination of the member from the Medicare Prescription Payment Plan. It is important to note that involuntary termination doesn’t compromise being a member of MCS Classicare or a specific drug coverage plan.
MCS Classicare will provide its members with a grace period of two (2) months if they fail to pay the billed amount by the payment due date. This grace period begins on the first day of the month for which the balance is unpaid or the first day of the month following the date the payment is requested, whichever is the latest. During this grace period:
If a Medicare Prescription Payment Plan participant fails to pay their monthly billed amount, MCS Classicare will send the following notices:
These processes and notices ensure transparency and provide members with opportunities to address outstanding balances while maintaining program compliance and continuity of coverage.
Process of applying for participation in the program:
Members who wish to participate in the Medicare Prescription Payment Plan may apply to enroll in the program beginning October 15, 2024, or during any month of the 2025 calendar year. However, even if you enroll in 2024, the payment plan is effective January 1, 2025.
When enrolling in the program throughout the 2025 calendar year, the Medicare Prescription Payment Plan would become effective within 24 hours of MCS Classicare's receipt of a complete application for participation. The first bill expires the next month after the first Part D prescription drug is dispensed.
CMS developed the Medicare Prescription Payment Plan Participation Request Form . This form must be filled for MCS Classicare to know that you would like to participate in the payment option. The form indicates that this is a voluntary payment option that works with the current drug coverage to help the member manage their expenses, but it won’t save them money or lower the drug cost. You must read the terms and conditions of the program included in the Participation Request Form.
Process for voluntary terminating your participation in the Medicare Prescription Payment Plan:
If an enrolled person wishes to withdraw from the Medicare Prescription Payment Plan, they can do so at any time during the plan year (January – December). The member that opts out from the Medicare Prescription Payment Plan program will be responsible to pay any new out-of-pocket costs directly to the pharmacy. The Participant will also be responsible for paying any remaining balance either by one lump sum or finishing its monthly payments.
The member who wishes to terminate voluntarily must notify MCS Classicare that they do not want to continue participating in the payment plan by means of a termination request form. If the participant disenrolls from MCS Classicare, their participation in the payment plan will be terminated voluntarily. As a result, the member will receive a confirmation of program termination within 10 calendar days of receipt of the application form.
MCS Classicare has procedures that allow Part D members participating in the Medicare Prescription Payment Plan to terminate their participation voluntarily. Upon a voluntary termination:
Ensuring the satisfaction and concerns of our Part D enrollees is a priority for us. We have a comprehensive process for filing complaints and grievances regarding the Medicare Prescription Payment Plan. The process allows enrollees to communicate their concerns and seek resolution promptly.
Part D members who wish to file a complaint or grievance related to the Medicare Prescription Payment Plan can do so through the following channels:
In the event a Part D member satisfies all program election requirements and, for reasons beyond the individual's control, MCS Classicare is unable to process the election into the program within the required timeframe after receipt of a complete application for participation, the Part D plan must process the initial date when the individual should have been admitted into the Medicare Prescription Payment Plan. This should occur no later than 24 hours after the individual provides all the necessary information to MCS Classicare for election into the program.
Furthermore, within 45 calendar days MCS Classicare will reimburse the participant back for any out-of-pocket cost-sharing that was paid on or after that date. Afterward, these summed amounts will be included in the monthly bills and must be paid back by the Medicare Prescription Payment Plan participant.
In situations where the Part D enrollee believes that any delay in filling the prescription(s) may seriously jeopardize their life or health, MCS Classicare will process an urgent retroactive election request when made by the Part D enrollee within 72 hours of the date and time the urgent claim(s) were adjudicated.
Under this policy, a retroactive election will be processed if all the following conditions are met:
MCS Classicare will handle the reimbursement for all cost sharing paid by the member for the urgent prescription and any covered Part D prescription filled between the date of adjudication of the urgent claim and the date that the enrollee's election is effectuated within 45 calendar days of the election date, following the effectuation of the member’s Medicare Prescription Payment Plan election. MCS Classicare will promptly notify the member of its selection. Afterwards, these amounts will be included in the monthly bills and must be paid back by the Medicare Prescription Payment Plan participant.
For any additional questions or information needed, please call MCS Classicare Customer Service at 787.620.2530 (metro area) or at 1.866.627.8183 (free of charge). People with hearing impairments (TTY) should call 1.866.627.8182. Our operating hours are Monday to Sunday from 8:00 a.m. to 8:00 p.m. . from October 1st to March 31st. From April 1st to September 30th the operating hours are Monday to Friday from 8:00 a.m. to 8:00 p.m., and Saturday from 8:00 a.m. to 4:30 p.m.
Additional resources regarding the Medicare Prescription Payment Plan: