A Medicare Part D redesign is underway, as part of the 2025 Inflation Reduction Act. The redesign aims to simplify the structure and streamline coverage to a single benefit phase with a $2000 annual out-of-pocket spending limit for beneficiaries. The redesign will also introduce a new Prescription Payment Plan, which will allow beneficiaries to spread out-of-pocket payments over the calendar year, smoothing the burden of payment for treatments throughout the year to avoid particularly large bills at a single visit to the pharmacy.

The Prescription Payment Plan will benefit individuals with significant one-time expenses, and address high out of pocket costs, however there are some concerns surrounding the implementation of the Plan. A recent post in Health Affairs by Stacie B. Dusetzina, Autumn D. Zuckerman, Nancy L. Keating, and Haiden A. Huskamp discusses these concerns.

The new policy has substantial benefits for chronic medication users who are likely to reach the $2,000 out-of-pocket cap, particularly for those who do so earlier in the calendar year. This plan will allow these individuals to gradually pay off their out-of-pocket medication costs over months without facing out-of-pocket spending that exceeds the original amount.

However, the plan might not be as beneficial for people with chronic conditions, who fill relatively lower cost medications repeatedly over time. These people may find the new plan’s fluctuating out-of-pocket costs confusing.

While the changes brought about by the Prescription Payment Plan stand to alleviate the financial burden for a high percentage of beneficiaries, it will be essential for CMS to define who is most likely to benefit from the program and focus on educating these beneficiaries about the new plan.