Xavier Becerra United States Secretary of Health and Human Services | Official Website
The Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), continues to advance President Biden’s initiative to alleviate high, upfront out-of-pocket prescription drug costs. This effort is part of the President’s Inflation Reduction Act. CMS has released the final part two guidance on plan outreach and education for the Medicare Prescription Payment Plan. This initiative aims to ensure that individuals with Medicare prescription drug coverage are informed about this payment option.
Starting in 2025, the Medicare Prescription Payment Plan will allow those with Medicare prescription drug coverage to spread their prescription drug costs over the calendar year instead of paying in full at each pharmacy visit. To benefit from this new option, people with Medicare must opt into the plan. Concurrently, annual out-of-pocket prescription drug costs for all individuals with Medicare prescription drug coverage will be capped at $2,000.
“The Medicare Prescription Payment Plan is one more way that President Biden is delivering on his promise of more predictable monthly costs for the American people,” said HHS Secretary Xavier Becerra. “No one should have to choose between paying for medicine or putting food on the table. Thanks to President Biden’s lower cost prescription drug law, the Inflation Reduction Act, fewer seniors and people with disabilities have to make such difficult decisions and instead can focus on improving their health.”
“This new payment option provides people with high Rx spending the option to spread out the costs of their prescription drugs over the calendar year and eliminate the burden of paying the total out-of-pocket cost upfront,” said CMS Administrator Chiquita Brooks-LaSure. “CMS is continuing to implement many important provisions of the Inflation Reduction Act to help people with Medicare access the prescriptions they need.”
The final part two guidance complements CMS’ upcoming national education and outreach efforts targeting Part D plans, pharmacies, providers, drug manufacturers, and beneficiary advocates. The aim is to support these groups in identifying who may benefit from this program and how best to educate them about it. This guidance finalizes requirements proposed in draft guidance released in February 2024.
Today's release also includes final model materials for communicating about the Medicare Prescription Payment Plan.
“At CMS, we are working hard to empower and educate people with Medicare to make the best choices for their health and financial needs,” said Meena Seshamani, MD, PhD, CMS Deputy Administrator and Director of the Center for Medicare. “The Medicare Prescription Payment Plan complements other important changes within the Inflation Reduction Act, and we encourage people with Medicare prescription drug coverage to look at this payment option along with our other programs such as Extra Help.”
The Inflation Reduction Act has already started reducing high upfront out-of-pocket prescription drug costs by:
- Capping out-of-pocket costs for a month’s supply of each covered insulin product at $35;
- Making ACIP-recommended vaccines available at no cost for people with Medicare prescription drug coverage;
- Expanding eligibility for Extra Help under Medicare Part D.
As of January 1, 2024, some enrollees now have their out-of-pocket drug costs capped at approximately $3,500. Additional savings will arrive in 2025 when yearly Part D out-of-pocket costs are capped at $2,000.
For further details on today’s announcement:
Fact sheet: [Link]
Updated Information Collection Request: [Link]
Implementation timeline: [Link]
