Medicare Offers Monthly Installments for Drug Bills but Requires Opt-In
Starting in 2026, Medicare beneficiaries can split their annual $2,100 out-of-pocket drug cost cap into monthly installments. However, this option is not automatic and requires individuals to enroll through their Part D plan before filling a prescription. The Inflation Reduction Act automatically caps yearly drug costs at $2,100 for all enrollees who reach that threshold. The Medicare Prescription Payment Plan (M3P) allows beneficiaries with high or front-loaded drug expenses—such as those taking specialty medications—to spread their payments over the remaining months of the year. The monthly payment is calculated based on what would have been owed each month, plus any unpaid balance from prior months, divided by the number of months left in the calendar year. Timing matters significantly: enrolling too late means there's nothing to smooth out. For example, someone who pays $2,100 upfront in January and then signs up for M3P later will not benefit because all costs have already been incurred.