The Department of Health and Human Services (HHS), under the guidance of the Centers for Medicare & Medicaid Services (CMS), underscores its commitment to easing the financial strain of Medicare prescription drug costs with the final release of Part Two guidance. This initiative is a pivotal component of President Biden’s Inflation Reduction Act, aimed at alleviating the burden of high out-of-pocket expenses.

Starting in 2025, Medicare beneficiaries will have access to the Medicare Prescription Payment Plan, offering them the choice to spread their prescription drug expenses evenly throughout the year rather than paying the full amount upfront with each refill. Enrollment in this plan is required for eligibility. Concurrently, the new plan coincides with the introduction of an annual cap of $2,000 on out-of-pocket prescription drug costs for all Medicare Part D enrollees, providing critical financial relief.

The Medicare Prescription Payment Plan

“The Medicare Prescription Payment Plan is another step towards fulfilling President Biden’s commitment to predictable monthly expenses for Americans,” remarked HHS Secretary Xavier Becerra. “No individual should face the choice between purchasing medication or essentials. Thanks to the Inflation Reduction Act, fewer seniors and individuals with disabilities are forced into such difficult decisions, allowing them to concentrate on improving their health.”

CMS Administrator Chiquita Brooks-LaSure added, “This new payment option offers individuals with substantial prescription drug expenses the flexibility to manage costs more effectively and removes the burden of upfront payments. CMS remains steadfast in implementing the Inflation Reduction Act’s provisions to ensure Medicare beneficiaries have access to necessary prescriptions.”

Part Two Guidance

This finalized Part Two guidance complements forthcoming national education initiatives by CMS, aimed at engaging stakeholders such as Part D plans, pharmacies, healthcare providers, drug manufacturers, and advocacy groups in the implementation process. These efforts are designed to provide comprehensive support and resources to identify beneficiaries who stand to benefit most from this program and guide them on utilizing the new payment option. The guidance incorporates updates and finalizes requirements initially proposed in the February 2024 draft.

Accompanying today’s announcement is the release of model materials for the Medicare Prescription Payment Plan, which supplements the initial guidance published on February 29. These materials are intended for use by Medicare Part D plans when communicating with enrollees about the new payment option.

Dr. Meena Seshamani, CMS Deputy Administrator and Director of the Center for Medicare, emphasized, “At CMS, we are committed to empowering Medicare beneficiaries with the information they need to make informed decisions about their health and finances. The Medicare Prescription Payment Plan complements other significant reforms under the Inflation Reduction Act, and we encourage beneficiaries to explore this option along with programs like Extra Help, tailored to meet their needs.”

The Inflation Reduction Act

The Inflation Reduction Act has already made substantial strides in reducing upfront prescription drug costs for Medicare beneficiaries, including capping monthly out-of-pocket expenses for covered insulin products at $35 and ensuring access to recommended vaccines at no cost. Additional benefits include expanded eligibility for the Extra Help program, which provides enhanced prescription drug coverage.

For more information on the final Part Two guidance for the Medicare Prescription Payment Plan, please refer to the fact sheet available at: https://www.cms.gov/files/document/fact-sheet-medicare-prescription-payment-plan-final-part-two-guidance.pdf.

To access the updated Information Collection Request (ICR) for model plan materials related to the Medicare Prescription Payment Plan, please visit: https://www.cms.gov/files/zip/medicare-prescription-payment-plan-model-materials.zip.

For details on the updated implementation timeline for the Medicare Prescription Payment Plan, please

Visit: http://www.cms.gov/files/documents/medicare-prescription-payment-plan-timeline.pdf.