The Biden-Harris Administration Medicare Prescription Payment Plan: Managing Prescription Drug Costs

On July 16, 2024, the Biden-Harris Administration released the final Part Two Guidance to help individuals with Medicare prescription drug coverage manage their prescription drug costs effectively. The announcement highlights the implementation of the President's Inflation Reduction Act, aimed at reducing the burden of high upfront out-of-pocket prescription drug expenses.

The key details and benefits of the Medicare Prescription Payment Plan include:

• Starting in 2025, individuals with Medicare prescription drug coverage have the option to spread the costs of prescription drugs over the calendar year, offering financial relief.
• Participants must opt into the Medicare Prescription Payment Plan to utilize this new benefit.
• The payment option coincides with a cap of $2,000 on annual out-of-pocket prescription drug costs for all Medicare prescription drug coverage holders.

Statements from HHS Secretary Xavier Becerra and CMS Administrator Chiquita Brooks-LaSure emphasize the positive impact of this payment option on monthly costs and health outcomes. The final part two guidance complements forthcoming national education efforts to inform stakeholders about program implementation.

Key highlights of the Inflation Reduction Act's effect on Medicare prescription drug coverage include:

• Capping out-of-pocket costs for covered insulin products at $35 per month.
• Providing ACIP-recommended vaccines at no cost for people with Medicare prescription drug coverage.
• Expanding eligibility for the Extra Help program under Medicare Part D, reducing out-of-pocket drug costs for individuals.

The guidance encourages Medicare beneficiaries to explore the Medicare Prescription Payment Plan and other available programs to choose the most suitable options for their health and financial well-being.

For more information and resources:

• Access the fact sheet on the final part two guidance for the Medicare Prescription Payment Plan here.
• View the updated Information Collection Request (ICR) for the Medicare Prescription Payment Plan model plan materials here.
• Refer to the updated implementation timeline for the Medicare Prescription Payment Plan here.