Yes, if you stay in the same Part D plan. Medicare's 2027 handbook says that if you're in the Medicare Prescription Payment Plan and stay in the same plan, your participation will be automatically renewed for 2027. If you switch to a different drug plan or a Medicare Advantage Plan with drug coverage, your participation ends, and you'd need to sign up again with the new plan.
What is the Medicare Prescription Payment Plan?
It's a payment option offered by all Medicare drug plans. You don't pay the pharmacy at the counter. You get a monthly bill from your plan that spreads your out-of-pocket drug costs across the calendar year.
Medicare's handbook says it might help you manage your expenses, but it doesn't save you money or lower your drug costs. For how it works with the yearly Part D cap, see the Part D out-of-pocket cap and Prescription Payment Plan. This page focuses on what happens from one year to the next.
Does it renew automatically?
Medicare's booklet on the payment plan says that every year, your plan will automatically renew your participation unless:
- You change plans, or
- You contact your plan to opt out.
CMS made automatic renewal a requirement in its 2026 rule for Medicare drug plans.
So if you're in the payment plan now and keeping the same drug plan for 2027, you don't need to do anything to stay in it.
What if I switch plans for next year?
Medicare's booklet says that if you leave your current plan or change to a new Medicare drug plan or Medicare Advantage Plan with drug coverage, your participation ends. Contact your new plan if you want to join its payment plan.
What to say to your new plan:
"I'm a new member starting January 1. I was in the Medicare Prescription Payment Plan with my old plan. How do I sign up with you, and when will it start?"
Medicare's booklet says you can sign up anytime during the calendar year.
If you're comparing plans during Open Enrollment, October 15 to December 7, see how to compare Part D plans during open enrollment.
What happens to any balance I still owe?
If you leave the payment plan or switch plans, Medicare's booklet says:
- You must still pay what you owe.
- You can pay the balance all at once or be billed monthly.
- After you leave, you pay the pharmacy directly for new drug costs.
Does my monthly bill start over in January?
The payment plan spreads costs across the calendar year (January to December). Each year starts fresh with that year's costs. For a big cost early in the year, monthly bills are spread over more months than a cost in, say, October.
Medicare.gov lists the Part D yearly out-of-pocket cap at $2,100 in 2026 and $2,400 in 2027, so the most you'd pay over a year for covered drugs is capped either way.
What if I miss a payment?
Medicare's booklet explains:
- Your plan sends a reminder if you miss a payment.
- If you don't pay by the date in that reminder, you'll be removed from the payment plan.
- You still owe the balance, and you can pay it all at once or monthly.
- You'll still be enrolled in your drug plan.
The booklet also says to always pay your plan's monthly premium first, so you don't lose your drug coverage. The payment plan bill is separate from the premium bill.
Should I stay in it for 2027?
That's your call. Some things to think about:
- Do you have large drug costs early in the year? That's when spreading costs helps most.
- Do you get Extra Help, or qualify for it? Medicare's handbook says the payment plan may not be the best choice for people who get or are eligible for Extra Help, including through a Medicare Savings Program. See Extra Help with drug costs.
- Can you keep up with a monthly bill? If not, ask your plan about other help.
To leave, the booklet says you can contact your plan at any time. Leaving doesn't affect your drug coverage.
How do I check the monthly bill?
Compare your payment plan bill with your plan's Explanation of Benefits:
- Each prescription on the EOB should show up in the payment plan amounts.
- The amounts should match what you would have paid at the pharmacy.
- The bill should be separate from your premium.
What to say if something looks wrong:
"I'm in the Medicare Prescription Payment Plan. My bill for [month] shows $[amount], but my Explanation of Benefits shows $[amount] in drug costs. Can you explain the difference?"
Medicare's booklet says that if you think the plan made a mistake on your payment plan bill, you can use the grievance process in your plan's Evidence of Coverage.
Who can help?
- Your plan's member services for bills and sign-up.
- Your State Health Insurance Assistance Program (SHIP) for free counseling. Find yours at shiphelp.org.
Frequently asked questions
Does the Medicare Prescription Payment Plan renew each year?
Yes. Your plan automatically renews your participation unless you change plans or opt out.
What if I switch Part D plans?
Your participation ends. Contact your new plan to sign up again.
What happens if I miss a payment?
You get a reminder. If you don't pay by its date, you're removed from the payment plan, but you keep your drug coverage and still owe the balance.
Does the payment plan lower my drug costs?
No. It spreads them across the year.
Check your monthly drug bills
Bill Review Coach is a monthly medical bill review service for seniors and their families. Upload your first bill free, no card needed. Snap a photo of your payment plan bill and Explanation of Benefits, and you'll get back a plain-English summary of what doesn't match and what to ask. Refer a friend and you both get a free month once they join the paid plan. You make the calls and write the emails; we help you know what to say.
General information, not legal advice. Check your own bill and notices.