Medicare Part D

Turn one big pharmacy bill into 12: how Part D smoothing works

COLLEGE PARK, Md. — Picking up a costly prescription in January can feel like a punch to the wallet. Starting in 2025, Medicare gave Part D enrollees a new way to handle that shock: instead of paying the full out-of-pocket amount at the pharmacy counter, you can ask your drug plan to bill you monthly across the rest of the calendar year. It's called the Medicare Prescription Payment Plan, and it continues in 2027.

The option is free to join, and it doesn't change what your drugs cost. It just changes when you pay.

What the payment plan actually does

Under regular Part D, you pay your share to the pharmacy each time you fill a prescription. That can mean a big bill in January or February if you take a costly drug, even though your total for the year is capped.

The Medicare Prescription Payment Plan works differently. Your Part D or Medicare Advantage drug plan pays the pharmacy for your share, then sends you a monthly bill. Your payments are spread over the months left in the calendar year, so a big January cost is split into smaller pieces instead of hitting all at once.

It's important to be clear: this is not a savings program. If you would have owed $1,200 across the year without it, you still owe $1,200 with it. Only the timing changes.

The 2027 numbers to keep in mind

A few program-level figures shape how this option feels in practice, according to CMS — Medicare Part D program rules (medicare.gov):

• The Part D out-of-pocket cap for 2026 is $2,100. Once your out-of-pocket drug spending hits that amount, you pay $0 for covered Part D drugs for the rest of the year.
• The maximum Part D deductible is $615.
• The old coverage gap (the "donut hole") was eliminated in 2025, so Part D now has three phases instead of four.

Because there is a hard cap, the most you would ever spread across monthly payments in 2027 is $2,400 in Part D cost-sharing.

Who tends to benefit — and who probably doesn't

The payment plan is most helpful for people who:

• Take an expensive brand-name or specialty drug and would face a large bill early in the year.
• Live on a fixed monthly income and would rather budget in predictable pieces.
• Expect to hit the out-of-pocket cap ($2,400 in 2027) and want to smooth the road to get there.

It is usually not helpful for people who take only low-cost generics. If your yearly Part D cost-sharing is small, adding a monthly bill can actually be more work than just paying at the pharmacy.

Medicare's own guidance suggests thinking twice before opting in if you get Extra Help (the low-income subsidy), because your drug costs are already very low.

How to opt in or opt out

You sign up through your Part D plan or Medicare Advantage drug plan — not through Medicare directly. Every plan is required to offer it.

• To opt in: Call your plan or check its website for the election form. You can join before the plan year begins or at any point during the year. If you join mid-year, your remaining balance is spread over the months left.
• To opt out: Contact your plan. You can leave the program at any time. If you stop, you still owe any unpaid balance, but you go back to paying at the pharmacy going forward.
• If you miss payments: Your plan can remove you from the program, and you may not be able to rejoin with that plan for the rest of the year. You keep your Part D coverage, though.

Pharmacists are also required to let people know about the option if it looks like a single prescription will run about $600 or more.

What this means locally

College Park is in Prince George's County, where Medicare beneficiaries choose among a wide range of stand-alone Part D drug plans and Medicare Advantage plans that include drug coverage. Every one of those plans has to offer the Medicare Prescription Payment Plan — so the option is available no matter which plan you're enrolled in.

If you are shopping during the Annual Enrollment Period (October 15 – December 7) or the Medicare Advantage Open Enrollment Period (January 1 – March 31), the payment plan itself isn't a reason to switch. It's the same feature across plans. Focus your comparison on drug coverage, pharmacy network, and total costs, and treat monthly smoothing as a separate decision.

Where to get personal help

Because the math depends on your specific prescriptions and income, a general article can only take you so far. For personalized answers:

• Visit medicare.gov to review Part D rules and use the Plan Finder.
• Call 1-800-MEDICARE (1-800-633-4227), 24 hours a day, 7 days a week.
• Contact Maryland SHIP (SHIP/SMP) for free, unbiased local counseling from trained volunteers.