Medicare Patients and Providers

Many drug insurance plans, including some Medicare plans, have a deductible. This is the amount you pay out-of-pocket for covered drugs before your insurance plan start to pay. For some drugs (including certain vaccines and insulins), the deductible is waived. If your plan has a yearly deductible, you will then be responsible for that cost. After meeting the yearly deductible amount, you are responsible for 25% of the cost of all your covered prescription drugs, up to $2,400 annually. Once you reach that limit, you will not pay anything more for covered prescription drugs for the remainder of the calendar year. In addition, the Medicare Part D coverage gap, sometimes called the donut hole, will be eliminated.

In 2025, a program called the Medicare Prescription Payment Plan became available. The Medicare Prescription Payment Plan gives you the option of making monthly installment payments for prescription drugs over the course of the calendar year instead of paying the full copayment or coinsurance at the pharmacy. This option will be available if you have original Medicare (Part A and B plan) with a standalone Medicare Part D plan or prescription coverage as part of a Medicare Advantage Plan. 

MPPP is a program that gives you the option to spread out your out-of-pocket costs for prescription drugs over the course of the calendar year, instead of paying the full copayment or coinsurance amount at the pharmacy.

This option will be available if you have:

• Original Medicare (Part A and B) with a standalone Medicare Part D plan

• Prescription coverage as part of a Medicare Advantage Plan

Keep in mind that the MPPP is a monthly payment plan for your prescription drug copayment or coinsurance costs. It does not reduce your total annual out-of-pocket costs, which are capped at $2,400 for 2027.

coinsurance: the percentage of costs you pay for a covered medicine or healthcare service (eg, 20%) after you’ve paid your deductible

copayment: a fixed amount (eg, $20) you pay for covered medicine or healthcare service after you’ve paid your deductible

coverage gap: in plans with Medicare prescription drug coverage after a certain amount has been paid by you and your drug plan for covered drugs, a period in which you have to pay all costs for prescriptions up to a yearly limit; also called the donut hole

deductible: the amount you pay for covered drugs before insurance plans start to pay

Medicare Advantage plans: optional Part C health insurance plan for Medicare enrollees. Members get Part A (hospital coverage), Part B (medical insurance), and drug coverage through these plans; however, not all plans offer drug coverage. These plans are offered by companies approved by Medicare

Medicare prescription drug plans: optional Part D federal plans that add drug coverage to original Medicare and certain other health plans. You must have Medicare Part A and/or Medicare Part B to join a separate Medicare drug plan. These plans are offered by companies approved by Medicare

Medicare Prescription Payment Plans: a program created under the Inflation Reduction Act. It requires Medicare Part D plans to offer members the option to pay out-of-pocket prescription drug costs with monthly payments over the course of a calendar year. This option will be available if you have original Medicare (Part A and B) with a standalone Part D plan or prescription coverage as part of a Medicare Advantage plan (Part C)

open enrollment period: a period of time when you can select or change Medicare drug coverage (between October 15 and December 7 each year); the change goes into effect on January 1 of the following year

Medicare: refers to Medicare Part A (hospital insurance) and Part B (medical insurance). It works on a fee-for-service basis, meaning you can go to any provider or hospital in the United States that accepts Medicare. You may still have to pay certain out-of-pocket costs. Also called traditional Medicare

out-of-pocket costs: your expenses for medical care or prescription drugs that are not paid by insurance