Did The Medicare Prescription Payment Plan’s Fix Make It Worse?

The Medicare Prescription Payment Plan (MPPP, M3P or MP3) will take effect January 1, 2025. It will allow those who have Part D prescription drug coverage to spread the costs out over the year, instead of paying all at once.

As with anything that is brand-new, this plan can be confusing. Because drug plan enrollees need to decide whether or not to enroll (participation is voluntary), getting a handle on how it will work is very important.

The Medicare Plan Finder has a link on the plan details page to show what each enrollee’s drug costs would be with and without this payment option at each of the selected pharmacies. On October 8, I posted five examples to reflect possible scenarios. The example for an out-of-network pharmacy was totally misleading. The individual takes 10 drugs, Tier 2 and Tier 3, and selected a pharmacy that was not in the plan’s network. Drug plans do not pay for any drugs from out-of-network pharmacies so he would face costs of almost $3,200 every month, a total of $38,286.12 in 2025. However, according to the MPPP chart that appeared for this pharmacy, if he enrolled in the program, his costs would drop to $166.67 a month, a savings of $36,286.12, in the calendar year. I noted that someone in charge needs to fix the example. The MPPP is not supposed to save any money.

Checking the Plan Finder one week later, it appears that someone in charge got the message. A different chart (pictured below) for an out-of-network pharmacy now shows no costs ($0.00) in both columns, with and without the payment option. Does that mean the man who takes those 10 drugs won’t face any costs? Of course not. He still would be responsible for $38,286.12 at a pharmacy not in-network. In my opinion, this fix is almost worse than the original.

How to Handle Covered Drugs From an Out-of-Network Pharmacy

Here’s the issue. The chart above shows “Your monthly costs for drugs covered by Part D.” The plan covers the drugs in this example. The problem is the pharmacy. There’s no payment from the plan; the individual is on the hook. Here are thoughts for fixing this.

• Both columns, with and without this payment option, should be identical, listing retail costs because the plan does not pay anything and the $2,000 cap does not apply. (In the example, that would be $3,190.51 a month.)
• The text should state that drug plans pay only for covered drugs from in-network pharmacies and that the individual is responsible for all drug costs from an out-of-network pharmacy.

Fixing this chart to reflect what happens with out-of-network pharmacies is important for two reasons.

• When making a decision about this payment plan, the chart cannot mislead enrollees about the costs they will face.
• Even though Open Enrollment just started, I have found that a couple of clients’ long-favorite pharmacies will not be in-network for them next year. And, because so many enrollees are on auto-pilot with Medicare, this could help them recognize a big change.

It seems as though Part D drug coverage has been put in a blender. There are so many changes that enrollees face. That’s why it is so important during Open Enrollment for everyone to focus on what’s happening to their plans in 2025.