“Smoothing” – What You Need to Know About Changes to Part D

I recently found a new word used to describe changes being made to Part D: “smoothing.”
What does this mean?  (And no – it’s not a delicious concoction of blended fruits and juice)  😋
The Center for Medicaid and Medicare Services (CMS) recently released draft guidance for the Medicare Prescription Payment Plan, part of the Inflation Reduction Act. This plan will help seniors and people with disabilities manage high upfront prescription drug costs by spreading payments throughout the year, starting in 2025.  This spreading out of payments is referred to as “smoothing”.
The new plan allows for more manageable, smaller monthly payments throughout the year.
Additionally, the Inflation Reduction Act includes other cost-saving measures like capping out-of-pocket costs, lowering insulin prices, and ensuring drug companies don’t raise prices faster than inflation (We’ll see how the intended results play out. Watch our video about this HERE).
CMS highlighted that this plan is designed to help those with high drug costs and encourages people to explore both the Medicare Prescription Payment Plan and the Extra Help program to find the best options for them.
Part D losing its donut hole, smoothing, and the lower out-of-pocket cap will be GREAT news for some (read: those with high Rx costs) and not-so-great news for those who don’t take any or very few prescriptions.
Just like with anything, the money has to come from somewhere.  CMS is spreading out the cost of high prescription costs to everybody, so some people will feel relief and some people will feel more of a pinch in the form of higher monthly premiums.
If you’re worried about what all this might mean for you – keep an eye on your email in September and October. We will be putting together some tools to help you make sure you are enrolled into the most cost-effective prescription drug plan for 2025. Stay tuned!