Orlando Harmon
Medicare prescription drug coverage, also known as Medicare Part D, helps to cover the cost of prescription drugs. This is available to anyone with Medicare, and there are two ways to get prescription drug coverage. You can either enroll in a stand-alone Medicare Part D plan, or you can join a Medicare-approved plan that offers drug coverage. It's important to note that Original Medicare does not generally cover prescription drugs, and if you join a Medicare Advantage Plan that doesn't offer drug coverage, you usually won't be able to add a separate Medicare drug plan.
| Characteristics | Values |
|---|---|
| Medicare Part covering prescription drugs | Part B (Medical Insurance) and Part D (Prescription Drug Plan Coverage) |
| Coverage under Part B | A limited number of outpatient prescription drugs under certain conditions; drugs you wouldn't typically give to yourself, like those you get at a doctor's office or in a hospital outpatient setting; drugs used with some types of durable medical equipment (DME) if medically necessary; some antigen allergy tests and treatments; HIV prevention drugs; injectable osteoporosis drugs; erythropoiesis-stimulating agents for End-Stage Renal Disease (ESRD) or to treat anemia |
| Coverage under Part D | Available to anyone with Medicare; offered by private insurance companies that follow rules set by Medicare; each plan can vary in cost and specific drugs covered; helps pay for most prescribed medicine |
| Cost under Part B | After meeting the Part B deductible, you pay up to 20% of the Medicare-approved amount for covered Part B prescription drugs; your coinsurance amount can change depending on your prescription drug's price; you might pay a lower coinsurance for certain Part B-covered drugs and biologicals you get in a doctor's office, pharmacy, or outpatient setting if their prices have increased faster than inflation |
| Cost under Part D | Depends on the plan chosen |
| Rules | Step therapy: starting with a more cost-efficient version of a drug before moving on to a more expensive medication; prior authorization: requiring approval from your doctor before the plan will pay for a drug; quantity limits: restrictions on the number of doses and/or refills covered by insurance for certain drugs, such as opioids |
| Additional Information | Medicare also covers Hepatitis B shots for certain people, oral cancer drugs, oral anti-nausea drugs as part of cancer treatment, and immunosuppressive drugs after organ transplants |
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What You'll Learn
Medicare Part D
Part D plans are provided by private insurance companies and are partially funded by the government. These plans typically pay for most of the prescription costs, although they are reimbursed by manufacturers and pharmacies. Enrollees cover a portion of their drug expenses, known as cost-sharing. The amount of cost-sharing varies depending on the drug's retail cost, the rules of the specific plan, and whether the enrollee is eligible for additional federal income-based subsidies.
To enrol in Part D, beneficiaries must also be enrolled in either Medicare Part A or Part B. They can participate in Part D through a stand-alone prescription drug plan or a Medicare Advantage plan that includes prescription drug benefits. In 2019, about three-quarters of Medicare enrollees obtained drug coverage through Part D, totalling 47 million beneficiaries.
The number of Part D plans available varies by location, but enrollees typically have numerous options. When selecting a plan, beneficiaries often compare premiums, covered drugs, and cost-sharing policies. Medicare provides an interactive online tool that allows users to compare coverage and costs for all plans in their geographic area. This tool uses biweekly data updates to remain current and enables users to input their medications to calculate personalized projections of annual costs under different plans.
In 2020, the average monthly premium for Part D across all plans was $27. Premiums for stand-alone prescription drug plans tend to be higher than those for Medicare Advantage plans, which use federal rebates to reduce premiums. Enrollees can choose to pay their premiums directly to plans or have them deducted from their Social Security checks.
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Outpatient prescription drugs
Medicare Part B (Medical Insurance) covers a limited number of outpatient prescription drugs under certain conditions. Part B generally covers drugs that cannot be self-administered, such as those administered in a doctor's office or hospital outpatient setting. In most cases, after meeting the Part B deductible, you will pay up to 20% of the Medicare-approved amount for covered Part B prescription drugs. Your coinsurance amount may vary depending on the price of your prescription drug.
Medicare Part B covers drugs used with certain types of durable medical equipment (DME) if they are medically necessary. This includes drugs infused through DME, such as an infusion pump or nebulizer. Part B also covers some antigen allergy tests and treatments if they are prepared by a healthcare provider and administered under appropriate supervision. Additionally, it covers HIV prevention drugs, injectable osteoporosis drugs, and erythropoiesis-stimulating agents for certain conditions.
Medicare drug plans (Part D) offer additional coverage for prescription drugs. These plans are provided by Medicare-approved private insurance companies and must follow rules set by Medicare. Part D covers many drugs that Part B does not, and each plan has its own list of covered drugs called a "formulary". To join a Part D plan, you must live in the plan's service area and be a United States citizen or lawfully present in the country. Part D generally covers all adult vaccines recommended by the Advisory Committee on Immunization Practices (ACIP), including vaccines for Respiratory Syncytial Virus (RSV), shingles, whooping cough, and measles.
If you receive Part B-covered drugs in a hospital outpatient setting as part of your outpatient services, you will pay a copayment for those services. Part B does not cover self-administered drugs in a hospital outpatient setting, and you will be responsible for the full cost of any non-covered prescription drugs unless you have other drug coverage. If you have coverage through Part D or another plan, your costs will depend on whether the drug is included in your plan's formulary and if the hospital is in your plan's network. It is recommended to contact your plan to understand your specific coverage and costs for outpatient prescription drugs.
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Non-covered prescription drugs
Medicare Part B covers a limited number of outpatient prescription drugs under certain conditions. Part B covers drugs that are typically administered by a doctor or in a hospital outpatient setting. Some of the drugs covered by Part B include:
- Drugs used with some types of durable medical equipment (DME), such as infusion pumps or nebulizers, if they are medically necessary.
- Certain antigen allergy tests and treatments, if they are prepared by a healthcare provider and administered under appropriate supervision.
- HIV prevention drugs.
- Injectable osteoporosis drugs.
- Erythropoiesis-stimulating agents for patients with End-Stage Renal Disease (ESRD) or anemia related to certain other conditions.
However, it's important to note that Part B does not cover "self-administered drugs" in a hospital outpatient setting. Self-administered drugs refer to medications that patients would typically take on their own. If you obtain non-covered prescription medications in an outpatient setting, you will be responsible for the full cost of the drugs unless you have alternative drug coverage.
Additionally, there are certain drugs that are generally not covered by any Medicare plans, including Part D, which is the component of Medicare that offers prescription drug coverage. These non-covered drugs include:
- Drugs for anorexia, weight loss, or weight gain (e.g., Xenical®, Meridia, phentermine HCl).
- Drugs that promote fertility (e.g., Clomid, Gonal-f, Ovidrel®, Follistim®).
- Drugs for cosmetic purposes or hair growth (e.g., Propecia®, Renova®, Vaniqa®).
- Drugs solely for the relief of cough and cold symptoms (e.g., Phenergan with Codeine, Robitussin® AC, Tanafed, Tessalon® Perle).
- Prescription vitamins and mineral products, except for prenatal vitamins and fluoride preparations.
It's important to note that prescription drugs used for the above conditions may be covered by Medicare if they are being prescribed to treat other non-cosmetic conditions. Additionally, drugs used to treat psoriasis, acne, rosacea, or vitiligo may be covered under Part D, as they are not considered cosmetic drugs.
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Transplant/immunosuppressive drugs
Medicare covers transplant drug therapy, including certain compounded immunosuppressive drugs, if Medicare helped pay for your organ transplant. To be eligible for this coverage, you must have had Part A at the time of the transplant and must have Part B at the time you get immunosuppressive drugs. If you only have Medicare because of End-Stage Renal Disease (ESRD), your Medicare coverage, including immunosuppressive drug coverage, will end 36 months after a successful kidney transplant. However, Medicare offers a benefit to help pay for immunosuppressive drugs beyond 36 months if you don't have certain types of other health coverage, such as a group health plan, TRICARE, or Medicaid that covers immunosuppressive drugs. This extended benefit is called Medicare Part B Immunosuppressive Drug (Part B-ID) and only covers immunosuppressive drugs, not other items or services.
To be eligible for Part B-ID coverage, patients must meet certain criteria, including currently or previously having Medicare due to ESRD that ends 36 months after a kidney transplant. They must also attest that they are not currently enrolled in other health coverage that would make them ineligible for Part B-ID. Patients with other specific health coverage, such as group or individual health plans, Medicaid, or the Children's Health Insurance Program (CHIP) with immunosuppressive drug coverage, are not eligible to enrol in Part B-ID.
It is important to note that the Part B-ID benefit only extends Medicare coverage for immunosuppressive drugs. If you qualify for other health insurance plans, you may want to explore those options to obtain broader health benefits and coverage. As of January 1, 2023, kidney transplant recipients can qualify for lifetime Medicare coverage of their immunosuppressive drugs, regardless of age, if they do not have other insurance coverage.
For immunosuppressive drugs, you will pay a monthly premium of $110.40 or higher, depending on your income, and a $257 deductible in 2025. Once you have met the deductible, you will pay up to 20% of the Medicare-approved amount for your immunosuppressive drugs. If you have Original Medicare, you can join a Medicare drug plan (Part D) to get Medicare drug coverage. Part D plans cover many drugs that Part B does not, but it is important to check the plan's drug list to see what outpatient drugs are covered.
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Prescription drug plan rules
Medicare Part B (Medical Insurance) covers a limited number of outpatient prescription drugs under specific conditions. Typically, Part B covers drugs administered in a hospital outpatient setting or a doctor's office, rather than self-administered drugs.
Medicare Part B covers:
- Drugs used with certain types of durable medical equipment (DME), such as infusion pumps or nebulizers, if deemed medically necessary.
- Some antigen allergy tests and treatments, provided they are administered by a properly instructed person under appropriate supervision.
- HIV prevention drugs.
- Injectable osteoporosis treatments.
- Erythropoiesis-stimulating agents for patients with End-Stage Renal Disease (ESRD) or those treating anemia related to certain conditions.
- Hepatitis B shots for certain individuals and other vaccines directly related to treating an injury or illness.
- Transplant/immunosuppressive drugs if Medicare helped fund the organ transplant. Part A is required at the time of the transplant, and Part B is necessary for immunosuppressive drug coverage. Coverage typically ends 36 months after a successful kidney transplant, but Medicare may assist with immunosuppressive drug costs beyond this period if certain conditions are met.
- Some oral cancer drugs if the same drug is available in injectable form or if it is a prodrug of the injectable version.
- Oral anti-nausea drugs taken as part of a cancer chemotherapeutic regimen, either before, during, or within 48 hours of chemotherapy, or as a full therapeutic replacement for intravenous anti-nausea medication.
Medicare drug plans may have additional rules and restrictions regarding coverage:
- Medication safety checks and drug management programs may be in place, especially for opioid pain medications.
- Medication Therapy Management (MTM) programs may be available for those with complex health needs.
- When transitioning to a new drug plan, you may receive a one-time, 30-day supply of a drug that your new plan does not cover or requires prior authorization/step therapy for. Check with your plan provider for specific coverage rules.
- Prior authorization may be required for certain drugs, where specific criteria must be met for coverage. This may include demonstrating that the drug is medically necessary.
- You or your prescriber can request an exception to prior authorization if a drug is believed to be medically necessary and there are no suitable alternatives.
- Step therapy may be a requirement, where a less expensive drug on the plan's drug list must be tried first before covering a more expensive option. However, exceptions can be requested if the less expensive drug is believed to be ineffective or detrimental to your health.
- Drug plans may limit the amount of drugs covered over a specific time period for safety and cost reasons.
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Frequently asked questions
Medicare prescription drug coverage, also known as Medicare Part D, helps you pay for most of your prescribed medicines. Original Medicare does not usually cover prescription drugs.
To get Medicare drug coverage, you must join a Medicare-approved plan that offers drug coverage. Private insurance companies offer Medicare drug coverage but must follow rules set by Medicare. You must live in the plan's service area and be a United States citizen or lawfully present in the United States.
Medicare Part B covers a limited number of outpatient prescription drugs under certain conditions. Part B covers drugs you wouldn't typically give to yourself, like those you get at a doctor's office or in a hospital outpatient setting.
Medicare covers Hepatitis B shots for certain people, some other vaccines, transplant drug therapy, oral cancer drugs, oral anti-nausea drugs, erythropoiesis-stimulating agents, and more.
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