HHS Releases Part Two of Medicare Prescription Drug Payment Plan

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The U.S. Department of Health and Human Services released the final part two guidance for the Medicare Prescription Drug Payment Plan on July 16, according to a news release on their website.

Starting in January 2025, Medicare beneficiaries will be able to spread their prescription drug costs across the calendar year rather than pay the full cost every time they go to the pharmacy.

Part one guidance was released in February of this year and focused on operational requirements for the program.

Part two of this plan was released to ensure that people with Medicare Part D drug coverage are aware of the payment options. In the new program, Medicare beneficiaries will pay nothing for covered Part D drugs. Instead, Part D sponsors will bill the beneficiaries monthly until the payment is made in full. Sponsors will then pay the pharmacies.

This program will launch at the same time as Medicare beneficiaries are having their out-of-pocket annual medication costs capped at $2,000.

Part D plan sponsors will be required to reach out to enrollees who spent at least $2,000 on drugs from January 1 and September 30 of this year.

The CMS will provide resources online that include a cost preview in the Medicare Finder. There will also be training sessions held for Medicare partners.

The CMS will also be publishing six model documents to help Part D sponsors meet their education and outreach requirements.

These changes are all part of the Inflation Reduction Act, established in 2022.

Some ways the Inflation Reduction Act has helped reduce costs so far include:

• Capping insulin costs at $35 a month.
• Making vaccines free for Medicare enrollees. Over 10 million people on Medicare Part D have received at least one free vaccine in 2023.
• Expanded eligibility for the Extra Help program which provides coverage with no premiums and fixed, low copays.