What is the Medicare Prescription Payment Plan?

How it works

• At the pharmacy: you pay nothing for covered Part D drugs. Your plan tells the pharmacy you're in the payment option.
• Each month: your plan sends a bill. Medicare.gov says every plan uses the same formula: what you would have paid for any new prescriptions, plus your previous month's balance, divided by the months left in the year.
• Your premium: if your plan has one, it's billed separately. Pay it first so you don't lose coverage.
• The yearly limit still applies: you'll never pay more in a year than you would have paid the pharmacy, and never more than the $2,400 Part D out-of-pocket cap for 2027.

Who it helps, and who it doesn't

Because the bill divides your costs by the months remaining, joining early makes each bill smaller. Medicare.gov says you're most likely to benefit if you have high drug costs early in the year, such as a specialty drug that would otherwise push you to the cap in January or February. It may not help if:

• your yearly drug costs are low, or about the same every month;
• you'd be joining late in the year;
• you get or qualify for Extra Help, or for MQB (North Carolina's Medicare Savings Programs, run through NC Medicaid and your county DSS); or
• other help already pays your drug costs. In North Carolina, for example, people in the HIV Medication Assistance Program's state pharmaceutical assistance program (SPAP) pay nothing at the pharmacy for drugs their Part D plan covers.

How to join for 2027

1. Choose your 2027 drug coverage first. Open Enrollment runs through December 7, 2026. If you switch plans, your 2026 participation doesn't carry over.
2. Contact your plan. Call the number on your member card or use the plan's website to ask to join. You can join at any time during the year. State Health Plan retirees in the Base Plan or Enhanced Plan ask their group plan.
3. Watch for the confirmation letter. It explains how to pay your bills.
4. Leave whenever you like. Contact your plan; you still owe any balance, and you'll pay the pharmacy directly again for new fills.

If you think a bill is wrong, call your plan; you can file a grievance using the process in your Evidence of Coverage. To compare North Carolina drug plans for 2027, you can request a call from a licensed insurance agent or look up your drugs on PlanMatch. If cost is the problem rather than timing, check Extra Help in North Carolina, which lowers what you pay.

Related questions

Sources

• Medicare.gov — What's the Medicare Prescription Payment Plan?
• Medicare.gov — Before using this payment option (how the monthly bill is calculated)
• Medicare.gov — Using this payment option (bills, missed payments, leaving)
• CMS — CY 2027 Rate Announcement (2027 Part D out-of-pocket threshold)
• NCDHHS — HMAP Program Manual (SPAP for Medicare Part D enrollees), October 6, 2026

More questions in this guide

• Does North Carolina have a prescription assistance program for seniors?
• How many Part D plans are available in North Carolina for 2027?
• Is there still a donut hole in Medicare Part D?
• What is the Medicare Part D out-of-pocket cap for 2027?
• Which drugs have Medicare negotiated prices for 2027?

Part of the guide: Medicare Part D in North Carolina · All questions

Frequently asked questions

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