The Medicare Prescription Payment Plan – An Unknown Great Benefit

I get inundated with bulletins that talk about “hacks” that will make my life much easier. Secrets that are revealed by restaurant servers, flight attendants or cruise line insiders. They are actually helpful sometimes, if I take the time to wade through the long narrative, but often they’re just schemes to get you to keep clicking through the monologue. My blogs usually take about 4 minutes to read so I hope you’ll decide that it’s worth your time to find out about a Medicare Part D prescription drug “hack” that might make a real difference in your life.

If you’ve read any of my work, you know that I’m pretty hard on the way our government performs its duties. I’ve been especially critical of the current mess our government has caused by failing to fund its operations, causing the continuing shutdown that seems to have no end in sight. But I do try to be fair and give credit where credit is due - and the Medicare Prescription Payment Plan (MPPP) was the right response to a problem that needed to be fixed.

While Medicare Part D has, year after year as confirmed by our annual polls, proven to be one of the best received programs our government oversees, there have been areas where it could be improved. It’s my opinion that one of the best improvements was the $2,000 yearly cap on the patient’s out-of-pocket costs for prescriptions, which started this year. It never seemed right that an older American could have the bad luck of getting a complicated disease, then the good luck of realizing that there is a promising treatment that could ease symptoms, slow progression, or even offer a cure - only to face financial ruin due to a lack of insurance or other means to afford the cost. The cap on cost gave untold comfort to people over 65 and to younger people as they finally had a way to accurately predict the max out-of-pocket drug costs they would have to pay when they aged into Medicare. It did have a drawback, the amount of money required in the first month before the patient reached the cap could be substantial.

There are medicines whose portion of the cost for patients would amount to $500, $1,000, $2,000 or even more per month. None of us wants to come up with that kind of money in one month but it’s a huge problem for those who are financially vulnerable. A great solution was, rather than forcing the patient to come up with the full cost of their portion of the cost in the first month, they could spread the cost over all 12 months. Amazing! While it didn’t change the cost of the medicine or the cost of the insurance premiums, it did offer a no interest way to lessen the blow of expensive prescriptions. That’s the basic goal of the Medicare Prescription Payment Plan (MPPP) and this option is available to every Part D plan, including those included with Medicare supplemental insurance or Medicare Advantage.  

But, as always, even this simple concept is not without challenges. It gets complicated when the projected total is below $2,000 or you start the expensive medicine later in the year. I went to the Medicare page and worked my through the explanation and the formulas - and my conclusion was that if I decided to opt into the MPPP someone with more knowledge about the calculation would figure out my monthly payments and the bottom line would be my cost would be spread over 12 months and reduce my financial impact.

I firmly supported this piece of legislation and knew it would strengthen the cap on out-of-pocket costs to the benefit of those who needed it most. But there was one thing missing in this great benefit - successful implementation. Of the 1.2 million people that were identified as likely to benefit from this program, since they spent more than $2,000 on prescriptions in 2024, only 15% have signed up. Everyone who spends more than $2,000 on medicines would benefit from the MPPP, from the richest to the poorest. Who would pass up the chance to retain cash by making no interest payments? What worries me is the person who walks away from the pharmacy counter without their medicine because they can’t come up with the large sum of money required, not knowing there is a solution that will remedy the problem.

It seems to me we didn’t do enough to inform Medicare beneficiaries and educate providers about this great program. Pharmacists, historically, have proven to be a great support and advisor to seniors. It would seem worthwhile for them to be the focus of an information campaign to alert patients about this program. I have talked with people who say their pharmacist knows very little about this program. They would be the ideal people to intervene when a patient walks away from the counter without their prescription because of cost. Another resource is the State Health Insurance Assistance Program (SHIP). They did a great job when Part D was first introduced in helping seniors find the best prescription plan and remain a trusted voice for us. These are just two options that might help remedy this problem.

The MPPP is a great program, it is a great way to help seniors take advantage of the cap on spending for prescription drugs. It would be a shame if we let a program that our lawmakers got right languish because we didn’t get the word out.

Best, Thair