One Big Bill or Twelve Small Ones: The Medicare Prescription Payment Plan

Questions this episode answers

Key facts

• No. Medicare says it might help you manage your monthly expenses, but it doesn't save you money or lower your drug costs (Medicare.gov).
• Anyone with a Medicare drug plan or a Medicare health plan with drug coverage, like a Medicare Advantage Plan with drug coverage, can use it. All plans offer this payment option, and taking part is your choice (Medicare.gov).
• Contact your health or drug plan. You can start any time during the calendar year, and your plan renews it each year unless you change plans or opt out (Medicare.gov).
• Out of pocket costs for covered Part D drugs are capped at $2,400 in 2027 (estimated), for everyone with Medicare drug coverage, even if you don't use the payment plan (Medicare.gov, CMS).
• Medicare's example: if your drugs cost $600 a month and you join in January 2027, your January bill would be $200 (estimated). Bills can change month to month (Medicare.gov).
• Your plan sends a reminder. If you don't pay by the date in the reminder, you're removed from the payment plan, but you keep your drug coverage. You won't pay interest or fees, even if a payment is late, and you still owe what you owe (Medicare.gov).
• Medicare says it may not be the best choice if your yearly drug costs are low, your costs are the same each month, you're signing up after September, or you get or are eligible for Extra Help or a Medicare Savings Program (Medicare.gov).
• Your plan, or 1-800-MEDICARE (1-800-633-4227), 24 hours a day, 7 days a week. TTY 1-877-486-2048 (Medicare.gov).

Chapters

1. 00:00Voicemail: June asks if the payment plan means she pays less
2. 00:25Show open
3. 00:36Last time: LIHEAP heating help for families
4. 00:48One big bill or twelve small ones
5. 01:07Welcome to Your Daily Benefit
6. 01:12How the payment plan works
7. 01:24Who can use it
8. 01:45The 2027 cap, $2,400 (estimated)
9. 02:01A Medicare example (estimated)
10. 02:16On the street: what people think
11. 03:01Three fixes
12. 03:38Should June use it
13. 03:57Extra Help and Medicare Savings Programs
14. 04:14Who to call
15. 04:26Benefit Bull helps you look
16. 04:37The answer for June
17. 04:47Next time
18. 05:03AI voices note

Find help

• Full episode page with transcript
• All Your Daily Benefit episodes
• Medicare Prescription Payment Plan: Who It Helps in 2027 (Benefit Bull guide)

Benefit Bull helps you find programs. You always sign up yourself, through your own plan or the official program. Benefit Bull is free, always.

Sources

Full transcript

1. 00:00

   June (voicemail): Hi, um... hi. This is June. I'm seventy two. My doctor put me on a new medicine, and, um, January is going to be a lot at the pharmacy. The pharmacist said there's a plan where you pay a little each month? Does that mean I pay less? And who do I even sign up with, Medicare? Okay. Thank you. Bye bye.

2. 00:25

   Nayva: Okay, June. Two good questions. Does the payment plan mean you pay less? And who do you sign up with? We'll get to both. Drew, quick catch up first?

3. 00:36

   Drew: Last time, heating help for families. It's based on income, not age. And the national energy help line is one eight six six, six seven four, six three two seven.

4. 00:48

   Nayva: Today, drug bills. One big bill, or twelve small ones?

5. 00:53

   Drew: Twelve small ones. Easy.

6. 00:55

   Nayva: Maybe. But here's the catch. Twelve small bills can still add up to the same big bill. It's called the Medicare Prescription Payment Plan.

7. 01:05

   Drew: Okay. The payment plan.

8. 01:07

   Nayva: The payment plan, for short. This is Your Daily Benefit.

9. 01:12

   Drew: And today is for anyone with Medicare drug coverage. So how does it work?

10. 01:17

    Nayva: When you fill a prescription, you don't pay the pharmacy. Instead, your plan sends you a bill each month.

11. 01:24

    Drew: Who can use it?

12. 01:25

    Nayva: Anyone with a Medicare drug plan, or a Medicare Advantage plan with drug coverage. All plans offer it. And it's your choice.

13. 01:34

    Drew: So, June. She has a drug plan. That's it?

14. 01:38

    Nayva: That's it. She may qualify just by having her drug plan. The real question is whether it helps her.

15. 01:45

    Drew: Is there a limit on what she pays in a year?

16. 01:48

    Nayva: Yes. In twenty twenty seven, out of pocket costs for covered drugs are capped at two thousand four hundred dollars. Estimated. That's true for everyone with Medicare drug coverage, plan or no plan.

17. 02:01

    Drew: So what does the payment plan change?

18. 02:04

    Nayva: When you pay. Medicare gives an example. Say your drugs cost six hundred dollars a month, and you join in January. Your January bill would be two hundred dollars. Estimated.

19. 02:16

    Drew: Before we answer June. I took a mic outside and asked people about this payment plan. Take a listen.

20. 02:25

    Drew (on the street): Hey, sorry, real quick. Have you heard of the Medicare payment plan? For drugs?

21. 02:32

    Man on the street: Uh... yeah, yeah. That's the one that makes your pills cheaper, right?

22. 02:37

    Drew (on the street): Okay. Thanks, sir.

23. 02:40

    Drew (on the street): Hi, excuse me, real quick. Who do you think you sign up with?

24. 02:43

    Woman on the street: Um, Medicare? Like, you call the government and fill out some big form? Right?

25. 02:49

    Drew (on the street): Okay, okay.

26. 02:51

    Drew (on the street): Sir, one more, real quick. What if you miss a bill?

27. 02:55

    Second man on the street: Oh, they'll hit you with late fees. And you lose your Medicare, like that.

    Not true: see 03:26. Medicare says you won't pay interest or fees, even if a payment is late. If you don't pay by the date in the reminder, you're taken off the payment plan, but you keep your Medicare drug coverage (Medicare, PDF 12211).

28. 02:58

    Drew (on the street): Appreciate you. Have a good one.

29. 03:01

    Nayva: Okay. Three fixes. One. It does not make your drugs cheaper. Medicare says it doesn't save you money or lower your drug costs. It spreads them out.

30. 03:12

    Drew: Two. Who you sign up with.

31. 03:15

    Nayva: Your plan. Not a big government form. All Medicare drug plans offer it, and you contact your plan to start, any time of year.

32. 03:24

    Drew: And three. Missing a bill.

33. 03:26

    Nayva: Medicare says you won't pay interest or fees, even if a payment is late. If you don't pay by the date in the reminder, you're taken off the payment plan. But you keep your drug coverage.

34. 03:38

    Drew: Back to June. Should she use it?

35. 03:40

    Nayva: It depends. Medicare says you're most likely to be helped if your drug costs are high early in the year.

36. 03:47

    Drew: And who should skip it?

37. 03:49

    Nayva: It may not be the best fit if your drug costs are low, or about the same each month, or if it's late in the year, after September.

38. 03:57

    Drew: Or if she gets Extra Help.

39. 04:00

    Nayva: Right. If you get Extra Help, or may qualify for it, or for a Medicare Savings Program, those can lower your costs. The payment plan can't. You can apply for Extra Help at S S A dot gov.

40. 04:14

    Drew: And if she still has questions?

41. 04:16

    Nayva: Call your plan. Or call one eight hundred, Medicare. That's one eight hundred, six three three, four two two seven. Any time, day or night.

42. 04:26

    Drew: And if you're not sure what other help is out there for you, Benefit Bull dot com can help you look. You still apply yourself, on the real program's site or phone line. It just helps you find it.

43. 04:37

    Nayva: So, June. The payment plan does not lower what you pay. It spreads it out. And you sign up with your plan, not Medicare. Thanks for calling.

44. 04:47

    Drew: Okay. What's next time?

45. 04:49

    Nayva: Another benefit you may qualify for. In plain words, like always.

46. 04:54

    Drew: I'll be here.

47. 04:55

    Nayva: See you next time. Take care of yourselves. And hey, this and a lot more, you can find at Benefit Bull dot com.

48. 05:03

    AI voices note: Quick note, the voices on Your Daily Benefit are AI generated.