Medicare Prescription Payment Plan

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The Medicare Prescription Payment Plan is a new payment option in the prescription drug law that works with your current drug coverage to help you manage your out-of-pocket Medicare Part D drug costs by spreading them across the calendar year (January-December). Starting in 2025, anyone with a Medicare drug plan or Medicare health plan with drug coverage (like a Medicare Advantage Plan with drug coverage) can use this payment option. PacificSource Medicare offers this payment option and participation is voluntary.

If you select this payment option, each month you'll continue to pay your plan premium (if you have one), and you'll get a separate bill from us to pay for your prescription drugs (instead of paying the pharmacy). There's no cost to participate in the Medicare Prescription Payment Plan.

What to know before participating

How does it work?

When you fill a prescription for a covered Part D drug, you won't pay your pharmacy (including mail order and specialty pharmacies). Instead, you'll get a bill each month from your health plan.

Even though you won't pay for your drugs at the pharmacy, you're still responsible for the costs. If you want to know what your drug will cost before you take it home, call your plan or ask the pharmacist.

This payment option might help you manage your monthly expenses, but it doesn't save you money or lower your drug costs.

How is my monthly bill calculated?

Your monthly bill is based on what you would have paid for any prescriptions you get, plus your previous month's balance, divided by the number of months left in the year. All plans use the same formula to calculate your monthly payments. See examples below.

Your payments might change every month, so you might not know what your exact bill will be ahead of time. Future payments might increase when you fill a new prescription (or refill an existing prescription) because as new out-of-pocket costs get added to your monthly payment, there are fewer months left in the year to spread out your remaining payments.

In a single calendar year (January – December), you'll never pay more than:

• The total amount you would have paid out of pocket to the pharmacy if you weren't participating in this payment option.
• The Medicare drug coverage annual out-of-pocket maximum ($2,000 in 2025).

The prescription drug law caps your out-of-pocket drug costs at $2,000 in 2025. This is true for everyone with Medicare drug coverage, even if you don't participate in the Medicare Prescription Payment Plan.

Will this help me?

It depends on your situation. Remember, this payment option might help you manage your monthly expenses, but it doesn't save you money or lower your drug costs. You're most likely to benefit from participating in the Medicare Prescription Payment Plan if you have high drug costs earlier in the calendar year. Although you can start participating in this payment option at any time in the year, starting earlier in the year (like before September), gives you more months to spread out your drug costs. Go to Medicare.gov/prescription-payment-plan/will-this-help-me to answer a few questions, and find out if you're likely to benefit from this payment option.

This payment option may not be the best choice for you if:

• Your yearly drug costs are low.
• Your drug costs are the same each month.
• You're considering signing up for the payment option late in the calendar year (after September).
• You don't want to change how you pay for your drugs.
• You get or are eligible for Extra Help from Medicare.
• You get or are eligible for a Medicare Savings Program.
• You get help paying for your drugs from other organizations, like a State Pharmaceutical Assistance Program (SPAP), a coupon program, or other health coverage.

You can use this payment calculator tool by entering your monthly prescription costs to see if enrolling in this program may be a good option for you.

See below to learn about programs that can help lower your costs.

Who can help me decide if I should participate?

PacificSource Medicare: Call 888-863-3637, TTY 711 and speak to a customer service representative.
Medicare: Visit Medicare.gov/prescription-payment-plan to learn more about this payment option and if it might be a good fit for you.
State Health Insurance Assistance Program (SHIP): Visit shiphelp.org to get the phone number for your local SHIP and get free, personalized health insurance counseling.

How do I sign up?

To start participating in this payment option you can complete the Medicare Prescription Payment Plan election request form, updated 9/17/2024.

Submit your completed form to:

• PacificSource Medicare Customer Service Department
  PO Box 7469 Bend, OR 97708
• Fax: 541-322-6423
• Email: MedicareCS@PacificSource.com

You may also call us at 888-863-3637 to submit your request via telephone. Existing PacificSource members can also complete the participation request form online at InTouch.PacificSource.com/Members.

In 2024, for 2025: If you want to participate in the Medicare Prescription Payment Plan for 2025, contact your plan now. Your participation will start January 1, 2025.
During 2025: Starting January 1, 2025, you can contact us to start participating in the Medicare Prescription Payment Plan anytime during the calendar year. Once you have opted into the program, your election request will be processed within 24 hours and notice of election will be sent to you within 3 calendar days.

Remember, this payment option may not be the best choice for you if you sign up late in the calendar year (after September). This is because as new out-of-pocket drug costs are added to your monthly payment, there are fewer months left in the year to spread out your payments.

What to know if I'm participating

What happens after I sign up?

Once your health or drug plan reviews your participation request, they'll send you a letter confirming your participation in the Medicare Prescription Payment Plan. Then:

1. When you get a prescription for a drug covered by Part D, your plan will automatically let the pharmacy know that you're participating in this payment option, and you won't pay the pharmacy for the prescription.
   
   Even though you won't pay for your drugs at the pharmacy, you're still responsible for the costs. If you want to know what your drug will cost before you take it home, call your plan or ask the pharmacist.
   
   
2. Each month, your plan will send you a bill with the amount you owe for your prescriptions, when it's due, and information on how to make a payment. You'll get a separate bill for your monthly plan premium (if you have one).
   
   
3. There may be a time when you have an urgent need for a prescription with a high cost, and cannot wait until your election request into the program is processed, so you must purchase the prescription at the pharmacy immediately. In this scenario you may meet the requirements for reimbursement if all of the following conditions are met:
   1. You have paid for an urgent prescription out of pocket before your election into the program was received and processed
   2. You believe that any delay in filling the prescription, due to the 24 hour timeframe required to process your request to opt into the program, may seriously jeopardize your life, health or ability to regain maximum function; and
   3. You request retroactive election with 72 hours of the date and time the urgent prescription claim was billed to the health plan

How do I pay my bill?

After your health or drug plan approves your participation in the Medicare Prescription Payment Plan, you'll get a letter from your plan with information about how to pay your bill.

What happens if I don't pay my bill?

You'll get a reminder from your health or drug plan if you miss a payment. If you don't pay your bill by the date listed in that reminder, you'll be removed from the Medicare Prescription Payment Plan. You're required to pay the amount you owe, but you won't pay any interest or fees, even if your payment is late. You can choose to pay that amount all at once or be billed monthly. If you're removed from the Medicare Prescription Payment Plan, you'll still be enrolled in your Medicare health or drug plan.

Always pay your health or drug plan monthly premium first (if you have one), so you don't lose your drug coverage. If you're concerned about paying both your monthly plan premium and Medicare Prescription Payment Plan bills, see below for information about programs that can help lower your costs.

Call customer service if you think we have made a mistake about your Medicare Prescription Payment Plan bill. If you think we have made a mistake, you have the right to follow the grievance process found in your Member Handbook or Evidence of Coverage. Contact customer service at 888-863-3637, TTY or email newappeal@pacificsource.com.

How do I leave?

You can leave the Medicare Prescription Payment Plan at any time by visiting InTouch.PacificSource.com/Members. or contacting customer service. Leaving won't affect your Medicare drug coverage and other Medicare benefits. Keep in mind:

• If you still owe a balance, you're required to pay the amount you owe, even though you're no longer participating in this payment option.
• You can choose to pay your balance all at once or be billed monthly.
• You'll pay the pharmacy directly for new out-of-pocket drug costs after you leave the Medicare Prescription Payment Plan.

What happens if I change health or drug plans?

If you leave your current plan, or change to a new Medicare drug plan or Medicare health plan with drug coverage (like a Medicare Advantage Plan with drug coverage), your participation in the Medicare Prescription Payment Plan will end.

Contact your new plan if you'd like to participate in the Medicare Prescription Payment Plan again.

What programs can help lower my costs?

If you have limited income and resources, find out if you're eligible for one of these programs:

• Extra Help: A Medicare program that helps pay your Medicare drug costs. Visit ssa.gov/medicare/part-d-extra-help to find out if you qualify and apply. You can also apply with your State Medical Assistance (Medicaid) office. Visit Medicare.gov/ExtraHelp to learn more.
• Medicare Savings Programs: State-run programs that might help pay some or all of your Medicare premiums, deductibles, copayments, and coinsurance. Visit Medicare.gov/medicare-savings-programs to learn more.
• State Pharmaceutical Assistance Programs (SPAPs): Programs that might include coverage for your Medicare drug plan premiums and/or cost sharing. SPAP contributions may count toward your Medicare drug coverage out-of-pocket limit. Visit go.medicare.gov/spap to learn more.
• Manufacturer Pharmaceutical Assistance Programs (sometimes called Patient Assistance Programs (PAPs)): Programs from drug manufacturers to help lower drugs costs for people with Medicare. Visit go.medicare.gov/pap to learn more.
• Low-Income Subsidy (LIS) Program: Visit your member plan page, click Part D Rx Information in the menu, then click Low Income Subsidy (LIS) Premium Information to learn more.

Many people qualify for savings and don't realize it. Visit Medicare.gov/basics/costs/help , or contact your local Social Security office to learn more. Find your local Social Security office at ssa.gov/locator/ .

Where can I get more information?

PacificSource Medicare: Call 888-863-3637, TTY 711 and speak to a customer service representative. or visit InTouch.PacificSource.com/Members.
Medicare: Visit Medicare.gov/prescription-payment-plan , or call 800-MEDICARE (800-633-4227), 24 hours a day, 7 days a week. TTY users can call 877-486-2048.

To learn more, see the CMS Fact Sheet, updated 9/17/2024.

Examples of how a monthly bill is calculated

Example 1:

You take several high-cost drugs that have a total out-of-pocket cost of $500 each month. In January 2025, you join the Medicare Prescription Payment Plan through your Medicare drug plan or Medicare health plan with drug coverage.

We calculate your first month's bill in the Medicare Prescription Payment Plan differently than your bill for the rest of the months in the year:

• First, we figure out your “maximum possible payment” for the first month:

  $2,000 [annual out-of-pocket maximum]
  – $0 [no out-of-pocket costs before using this payment option]
  = $2,000
  12 [remaining months in the year]	= $166.67 [your "maximum possible payment" for the first month]

• Then, we figure out what you'll pay for January:
  • Compare your total out-of-pocket costs for January ($500) to the “maximum possible payment” we just calculated: $166.67.
  • Your plan will bill you the lesser of the two amounts. So, you'll pay $166.67 for the month of January.
  • You have a remaining balance of $333.33 ($500-$166.67).

For February and the rest of the months left in the year, we calculate your payment differently:

We'll calculate your March payment like we did for February:

In April, when you refill your prescriptions again, you’ll reach the annual out-of-pocket maximum for the year ($2,000 in 2025). You’ll continue to pay what you already owe and get your prescription(s), but after April you won’t add any new out-of-pocket costs for the rest of the year.

Example 1: Start participating in January with high drug costs early in the year
Month	Your drug costs (without this payment option)	Your monthly payment (with this payment option)	Notes
January	$500	$166.67	This is when you started participating in this payment option. Remember, your first month's bill is based on the “maximum possible payment” calculation. We calculate your bill for the rest of the months in the year differently.
February	$500	$75.76
March	$500	$125.76
April	$500	$181.31	This month you reached the annual out-of-pocket maximum ($2,000 in 2025). You'll have no new out-of-pocket drug costs for the rest of the year.
May	$0.00	$181.31*	*You'll still get your $500 drugs each month, but because you've reached the annual out-of-pocket maximum, you won't add any new out-of-pocket costs for the rest of the year. You'll continue to pay what you already owe.
June	$0.00	$181.31*
July	$0.00	$181.31*
August	$0.00	$181.31*
September	$0.00
October	$0.00	$181.31*
November	$0.00	$181.31*
December	$0.00	$181.31*
Total	$2,000.00	$2,000.00	You'll pay the same total amount for the year, even if you don't use this payment option.

If you're concerned about paying $500 each month from January to April, this payment option will help you manage your costs. If you prefer to pay $500 each month for 4 months and then pay $0 for the rest of the year, this payment option might not be right for you. Contact your health or drug plan for personalized help.

Example 2:

You take several drugs that have a total out-of-pocket cost of $80 each month. In January 2025, you join the Medicare Prescription Payment Plan through your Medicare drug plan or Medicare health plan with drug coverage.

We calculate your first month's bill in the Medicare Prescription Payment Plan differently than your bill for the rest of the months in the year:

• First, we figure out your “maximum possible payment” for the first month:

  $2,000 [annual out-of-pocket maximum]
  – $0 [no out-of-pocket costs before using this payment option]
  = $2,000
  12 [remaining months in the year]	= $166.67 [your "maximum possible payment" for the first month]

• Then, we figure out what you'll pay for January:
  • Compare your total out-of-pocket costs for January ($80) to the “maximum possible payment” we just calculated: $166.67.
  • Your plan will bill you the lesser of the two amounts. So, you'll pay $80 for the month of January.
  • You have a remaining balance of $0.

For February and the rest of the months left in the year, we calculate your payment differently:

We'll calculate your March payment like we did for February:

Example 2: Start participating in January with consistent costs throughout the year
Month	Your drug costs (without this payment option)	Your monthly payment (with this payment option)	Notes
January	$80.00	$80.00	This is when you started participating in this payment option. Remember, your first month's bill is based on the “maximum possible payment” calculation. We calculate your bill for the rest of the months in the year differently.
February	$80.00	$7.27
March	$80.00	$15.27
April	$80.00	$24.16
May	$80.00	$34.16
June	$80.00	$45.59
July	$80.00	$58.93
August	$80.00	$74.92
September	$80.00	$94.93
October	$80.00	$121.59
November	$0.00	$161.59
December	$80.00	$241.59
Total	$960.00	$960.00	You'll pay the same total amount for the year, even if you don't use this payment option.

Depending on your specific circumstances, you might not benefit from using this payment option due to the higher payments that start in September. Contact your health or drug plan for personalized help.

Example 3:

You pay $4 every month in out-of-pocket costs for a prescription you use regularly. In April 2025, you need a new one-time prescription that costs $613, so your total out-of-pocket costs in April are $617. That same month, before you fill your prescriptions, you decide to participate in the Medicare Prescription Payment Plan through your Medicare drug plan or Medicare health plan with drug coverage.

We calculate your first month’s bill in the Medicare Prescription Payment Plan differently than your bill for the rest of the months in the year:

• First, we figure out your “maximum possible payment” for the first month:

  $2,000 [annual out-of-pocket maximum]
  – $12 [no out-of-pocket costs before using this payment option]
  = $1,988
  9 [remaining months in the year]	= $220.89 [your "maximum possible payment" for the first month]

• Then, we figure out what you'll pay for April:
  • Compare your total out-of-pocket costs for April ($617) to the “maximum possible payment” we just calculated: $220.89.
  • Your plan will bill you the lesser of the two amounts. So, you'll pay $220.89 for the month of April.
  • You have a remaining balance of $396.11 ($617-$220.89).

For May and the rest of the months left in the year, we calculate your payment differently:

Example 3: Start participating in April with varying costs throughout the year
Month	Your drug costs (without this payment option)	Your monthly payment (with this payment option)	Notes
January	$4.00	$4.00*	* You made these payments directly to the pharmacy before you started participating in the Medicare Prescription Payment Plan.
February	$4.00	$4.00*
March	$4.00	$4.00*
April	$617.00	$220.89	This is when you started using this payment option. Remember, your first month’s bill is based on the “maximum possible payment” calculation. We calculate your bill for the rest of the months in the year differently.
May	$4.00	$50.01
June	$4.00	$50.59
July	$124.71	$71.25	This month, you need a drug that’s $120, in addition to your $4 drug. Following the same formula we used in May, your payments increase because you’re adding drug costs during the year, but you have fewer months left in the year to spread your payments across.
August	$4.00	$72.05
September	$4.00	$73.05
October	$124.00	$114.39	This month, you need a drug that’s $120, in addition to your $4 drug. Following the same formula we used in May, your payments increase because you’re adding drug costs during the year, but you have fewer months left in the year to spread your payments across.
November	$4.00	$116.39*
December	$4.00	$120.38
Total	$901.00	$901.00	You'll pay the same total amount for the year, even if you don't use this payment option.

If you’re concerned about paying $617 in April, this payment option will help you spread your costs across monthly payments that vary throughout the year. If you’re concerned about higher payments later in the year, this payment option might not be right for you. Contact your health or drug plan for personalized help.