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The Medicare Prescription Payment Plan is a payment option that works with your current drug coverage to help you manage your out-of-pocket drug costs by spreading your payments across the calendar year.
While it won't save you money or lower your costs, it offers flexibility in how you can pay for your prescription medications.
The program is voluntary and free to join.
How it works
When you fill a prescription for a drug covered by Part D, you won’t pay your pharmacy. Instead, you’ll get a bill each month from your Medicare health or drug plan.
As you purchase new prescriptions throughout the year, your monthly payments will adjust accordingly. This means you might not know what your exact bill will be ahead of time, and your payments can change from month to month.
Who can enroll
Anyone with a Medicare drug plan or a Medicare health plan with drug coverage can sign up beginning January 2025.
You’re most likely to benefit from the Medicare Prescription Payment Plan if you have high drug costs earlier in the calendar year.
Visit Medicare.gov and answer a few questions to find out if you're likely to benefit from this payment option.
How your bill is calculated
Your monthly bill is based on what you would have paid for any prescriptions you get, plus your previous month’s balance, divided by the number of months left in the year.
Although you can start participating in this payment option at any time in the year, starting earlier in the year gives you more months to spread out your drug costs.
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 Medicare drug plan or Medicare 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:
First, we figure out your “maximum possible payment” for the first month:
$2,000 [annual out-of-pocket maximum]
– $0 [no out-of-pocket costs before using this payment option]
= $2,000
12 [remaining months in the year]
= $166.67 [your “maximum possible payment” for the first month]
Then, we figure out what you’ll pay for January:
- Compare your total out-of-pocket costs for January ($500) to the “maximum possible payment” we just calculated: $166.67.
- Your plan will bill you the lesser of the two amounts. So, you’ll pay $166.67 for the month of January.
- You have a remaining balance of $333.33 ($500-$166.67).
For February and the rest of the months left in the year, we calculate your payment differently:
$333.33 [remaining balance] + $500 [new costs]
= $833.33
11 [remaining months in the year]
= $75.76 [your payment for February]
We’ll calculate your March payment like we did for February:
$757.57 [remaining balance] + $500 [new costs]
= $1,257.57
10 [remaining months in the year]
= $125.76 [your payment for March]
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.
$1,131.81 [remaining balance] + $500 [new costs]
= $1631.81
9 [remaining months in the year]
= $181.31 [your payment for April and all remaining months in 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).
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.
| Month | Your drug costs (without this payment option) | Your monthly payment (with this payment option) | Notes |
|---|---|---|---|
| January | $500 | $166.67 | This is when you started participating in this payment option. Remember, your first month’s bill is based on the “maximum possible payment” calculation. We calculate your bill for the rest of the months in the year differently. |
| February | $500 | $75.76 | |
| March | $500 | $125.76 | |
| April | $500 | $181.31 | This month you reached the annual out-of-pocket maximum ($2,000 in 2025). You’ll have no new out-of-pocket drug costs for the rest of the year. |
| May | $0.00 | $181.31 | You’ll still get your $500 drugs each month, but because you’ve reached the annual out-of-pocket maximum, you won’t add any new out-of-pocket costs for the rest of the year. You’ll continue to pay what you already owe. |
| June | $0.00 | $181.31 | You’ll still get your $500 drugs each month, but because you’ve reached the annual out-of-pocket maximum, you won’t add any new out-of-pocket costs for the rest of the year. You’ll continue to pay what you already owe. |
| July | $0.00 | $181.31 | You’ll still get your $500 drugs each month, but because you’ve reached the annual out-of-pocket maximum, you won’t add any new out-of-pocket costs for the rest of the year. You’ll continue to pay what you already owe. |
| August | $0.00 | $181.31 | You’ll still get your $500 drugs each month, but because you’ve reached the annual out-of-pocket maximum, you won’t add any new out-of-pocket costs for the rest of the year. You’ll continue to pay what you already owe. |
| September | $0.00 | $181.31 | You’ll still get your $500 drugs each month, but because you’ve reached the annual out-of-pocket maximum, you won’t add any new out-of-pocket costs for the rest of the year. You’ll continue to pay what you already owe. |
| October | $0.00 | $181.31 | You’ll still get your $500 drugs each month, but because you’ve reached the annual out-of-pocket maximum, you won’t add any new out-of-pocket costs for the rest of the year. You’ll continue to pay what you already owe. |
| November | $0.00 | $181.31 | You’ll still get your $500 drugs each month, but because you’ve reached the annual out-of-pocket maximum, you won’t add any new out-of-pocket costs for the rest of the year. You’ll continue to pay what you already owe. |
| December | $0.00 | $181.31 | You’ll still get your $500 drugs each month, but because you’ve reached the annual out-of-pocket maximum, you won’t add any new out-of-pocket costs for the rest of the year. You’ll continue to pay what you already owe. |
| Total | $2,000.00 | $2,000.00 | You’ll pay the same total amount for the year, even if you don’t use this payment option. |
If you’re concerned about paying $500 each month from January to April, this payment option will help you manage your costs. If you prefer to pay $500 each month for 4 months and then pay $0 for the rest of the year, this payment option might not be right for you. Contact your health or drug plan for personalized help.
You take several drugs that have a total out-of-pocket cost of $80 each month. In January 2025, you join the Medicare Prescription Payment Plan through your Medicare drug plan or Medicare 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:
First, we figure out your “maximum possible payment” for the first month:
$2,000 [annual out-of-pocket maximum]
– $0 [no out-of-pocket costs before using this payment option]
= $2,000
12 [remaining months in the year]
= $166.67 [your “maximum possible payment” for the first month]
Then, we figure out what you’ll pay for January:
- Compare your total out-of-pocket costs for January ($80) to the “maximum possible payment” we just calculated: $166.67.
- Your plan will bill you the lesser of the two amounts. So, you’ll pay $80 for the month of January.
- You have a remaining balance of $0.
For February and the rest of the months left in the year, we calculate your payment differently:
$0 [remaining balance] + $80 [new costs]
= $80.00
11 [remaining months in the year]
= $7.27 [your payment for February]
We’ll calculate your March payment like we did for February:
$72.73 [remaining balance] + $80 [new costs]
= $152.73
10 [remaining months in the year]
= $15.27 [your payment for March]
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).
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.
| Month | Your drug costs (without this payment option) | Your monthly payment (with this payment option) | Notes |
|---|---|---|---|
| January | $80.00 | $80.00 | This is when you started using this payment option. Remember, your first month’s bill is based on the “maximum possible payment” calculation. We calculate your bill for the rest of the months in the year differently. |
| February | $80.00 | $7.27 | |
| March | $80.00 | $15.27 | |
| April | $80.00 | $24.16 | |
| May | $80.00 | $34.16 | |
| June | $80.00 | $45.59 | |
| July | $80.00 | $58.93 | |
| August | $80.00 | $74.92 | |
| September | $80.00 | $94.93 | |
| October | $80.00 | $121.59 | |
| November | $80.00 | $161.59 | |
| December | $80.00 | $241.59 | |
| Total | $960.00 | $960.00 | You’ll pay the same total amount for the year, even if you don’t use this payment option. |
Depending on your specific circumstances, you might not benefit from using this payment option due to the higher payments that start in September. Contact your health or drug plan for personalized help.
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, before you fill your prescriptions, you decide to participate in the Medicare Prescription Payment Plan through your Medicare drug plan or Medicare 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:
First, we figure out your “maximum possible payment” for the first month:
$2,000 [annual out-of-pocket maximum]
– $12 [your out-of-pocket costs before using this payment option]
= $1,988
9 [remaining months in the year]
= $220.89 [your “maximum possible payment” for the first month]
Then, we figure out what you’ll pay for April:
- Compare your total out-of-pocket costs for April ($617) to the “maximum possible payment” we just calculated: $220.89.
- Your plan will bill you the lesser of the two amounts. So, you’ll pay $220.89 for the month of April.
- You have a remaining balance of $396.11 ($617 – $220.89).
For May and the rest of the months left in the year, we calculate your payment differently:
396.11 [remaining balance] + $4 [new costs]
= $400.11
8 [remaining months in the year]
= $50.01 [your payment for May]
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.
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).
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.
| Month | Your drug costs (without this payment option) | Your monthly payment (with this payment option) | Notes |
|---|---|---|---|
| January | $4.00 | $4.00 | You made these payments directly to the pharmacy before you started participating in the Medicare Prescription Payment Plan. |
| February | $4.00 | $4.00 | You made these payments directly to the pharmacy before you started participating in the Medicare Prescription Payment Plan. |
| March | $4.00 | $4.00 | You made these payments directly to the pharmacy before you started participating in the Medicare Prescription Payment Plan. |
| April | $617.00 | $220.89 | This is when you started using this payment option. Remember, your first month’s bill is based on the “maximum possible payment” calculation. We calculate your bill for the rest of the months in the year differently. |
| May | $4.00 | $50.01 | |
| June | $4.00 | $50.59 | |
| July | $124.00 | $71.25 | This month, you need a drug that’s $120, in addition to your $4 drug. Following the same formula we used in May, your payments increase because you’re adding drug costs during the year, but you have fewer months left in the year to spread your payments across. |
| August | $4.00 | $72.05 | |
| September | $4.00 | $73.05 | |
| October | $124.00 | $114.39 | This month, you need a drug that’s $120, in addition to your $4 drug. Following the same formula we used in May, your payments increase because you’re adding drug costs during the year, but you have fewer months left in the year to spread your payments across. |
| November | $4.00 | $116.39 | |
| December | $4.00 | $120.38 | |
| Total | $901.00 | $901.00 | You’ll pay the same total amount for the year, even if you don’t use this payment option. |
If you’re concerned about paying $617 in April, this payment option will help you spread your costs across monthly payments that vary throughout the year. If you’re concerned about higher payments later in the year, this payment option might not be right for you. Contact your health or drug plan for personalized help.
How to enroll
There are 3 ways to enroll in the Medicare Prescription Payment Plan:
By phone
Call customer service at the number on the back of your member ID card.
By mail
Complete an enrollment form (PDF) and return it to:
Blue Cross NC, Mailstop: 1001
MPPP Election Dept.
13900 N. Harvey Avenue
Edmond, OK 73013
Once your health or drug plan reviews your participation request, they’ll send you a letter confirming your participation in the program.
Urgent election
Enrollees can apply a retroactive election into the Medicare Prescription Payment Plan when they have filled certain urgent prescription(s) and already paid the associated cost sharing before the enrollee’s program election was received and processed. Call 888-310-4110 to learn more.
What's next?
Once you're enrolled, when you pick up a covered prescription, your Medicare plan will automatically let the pharmacy know that you’re participating in this payment option. Even though you won’t pay for your drugs at the pharmacy, you’re still responsible for the out-of-pocket costs. If you want to know what your drug will cost before you take it home, call customer service at the number on the back of your member ID card or ask the pharmacist.
Each month, your plan will send you a bill with the amount you owe for your prescriptions, along with information on how to make a payment. Your plan premium, if there is one, will be billed and paid separately.
You can leave the Medicare Prescription Payment Plan at any time by contacting your health or drug plan. If you leave your current plan or switch to a new plan, your participation in the Medicare Prescription Payment Plan will end, and you'll be asked to pay your remaining balance.
Members can submit a complaint or grievance to Medicare. Visit the Prescription drug coverage determinations, appeals, and grievances page to get help with appeals and grievances for your Medicare drug coverage.
Programs to help lower your costs
If you have limited income and resources, you may be eligible for assistance from these programs.
Extra Help
Extra Help is a Medicare program that helps pay your Medicare drug costs. Find out if you qualify and apply through Social Security. You can also apply with your State Medical Assistance (Medicaid) office.
For Medicare enrollees with Part D who are eligible for the Low-Income Subsidy (LIS) (also known as Extra Help), enrollment in Extra Help is more advantageous than the Medicare Prescription Payment Plan.
Medicare Savings Programs
State-run programs that might help pay some or all of your Medicare premiums, deductibles, copayments, and coinsurance.
State Pharmaceutical Assistance Programs
State Pharmaceutical Assistance Programs (SPAPs) are programs that might include coverage for your Medicare drug plan premiums and / or cost sharing. SPAP contributions may count toward your Medicare drug coverage out-of-pocket limit.
Manufacturer Pharmaceutical Assistance Programs
Sometimes called Patient Assistance Programs (PAPs), these are programs from drug manufacturers to help lower drugs costs for people with Medicare.
Visit Medicare.gov or contact your local Social Security office to find out if you qualify for savings.
Need more information?
Contact us
Log in to Blue Connect or call us at the telephone number on the back of your member ID card.
Learn more from Medicare
Visit Medicare's website to learn more about this payment plan.
You can also call 1-800-MEDICARE (1-800-633-4227), 24 hours a day, 7 days a week.
TTY users can call 1-877-486-2048.
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