It’s 2025 and the new Part-D prescription plan is live. The Inflation Reduction Act of 2022 has had a major impact on Medicare as a whole, due to its changes to Part D. This has caused changes to all plans (no plan was not touched by these new regulations), with some experiencing higher copay’s, lower benefits from dental to OTC (over the counter) allowances, and much more. Along with all these changes came the implementation of the NEW Medicare Prescription Payment Plan, (we insiders call it M3P). This program allows you to stretch your prescription drug costs over the contract year of your plan, in the event you have high-cost share. Let’s look at three (3) things you must know.

You Can Pre-enroll In the Program, In Case You Need It in the Future

While most people with high prescription costs will know if they need this program at the beginning of the year, there will be others who will be caught off guard by some diagnosis that will require expensive medications, throughout the year.

If you know you may have a chronic diagnosis coming, based on medical advice and upcoming tests, you can apply for the M3P program, and it will sit dormant until you need it. If the diagnosis is favorable and no medications will be needed, nothing changes. However, if the results are negative and you must start a costly prescription, it will automatically spread your share of the cost over the remaining months of the year.

The Maximum You Will Spend on Part-D Drugs is Now $2,000

There are two kinds of drugs that a medical professional can prescribe to you: Part-B and Part-D drugs.

Part-B drugs are medical drugs that cannot be purchased at a pharmacy, it must be given to you by a medical professional like a doctor, therapist, etc. Some examples are anesthesia, cortisone shots in your joints, chemotherapy, renal dialysis or that nasty chalky shake for a barium enema.

Part-B drugs DO NOT count toward your prescription cost share of $2,000, nor are they covered by your prescription plan. All Part-B drugs are covered by your medical portion of Medicare or Medicare Advantage plan and have a 20% coinsurance. Good news is since it is a medical expense, it DOES count toward your maximum-out-of-pocket (MOOP) limit for hospital and medical cost.

Part-D drugs, on the other hand, are the ones your prescription plan covers. And your maximum-out-of-pocket for these medications is $2,000. What that means to you is that any money you spend on these medications and anyone else pays on your behalf, counts against this MOOP limit. For example, if you were getting assistance from a pharmaceutical company’s manufacturer program, it would count.

Once $2,000 have been spent by you or on your behalf, you move from the Coverage Stage of Part D, down to the Catastrophic Coverage stage, where you pay nothing until the following year.

While this can happen in one month, two or more months, you will have no cost for the remaining part of the year. However, having to spend $2,000 in six or fewer months, for example, can put a heavy burden on a family’s budget, which is why the program may be a good option for you.

It Is Not for Everybody: Use Good Judgement

While Americans have grown used to the idea of financing and making payments on almost everything, you want to make sure you are good candidate for this program. It has its PROs, but it has its CONs too. Make sure you get with your agent and him or her explain the details that you must think with before choosing to use this the M3P.

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