Does Medicare cover prescriptions?

Does Medicare cover prescriptions? | Drugs covered by Medicare | Drugs not covered by Medicare | How to get Medicare drug coverage | Eligibility & enrollment | Costs & savings | How to choose a Medicare drug plan

When looking into Medicare health insurance plans, it’s important to understand your options to ensure that you are getting the proper coverage for your specific healthcare needs. For many, the cost of prescription drugs can be a large portion of their healthcare spending, making it crucial that they have prescription drug coverage.

“As people age, prescriptions become much more commonplace,” says Alex Kronk, MHA, the creator of The Health Plan Critic. “Many chronic conditions begin to surface in those [older than] 65 years of age. Some common examples are blood thinners for those at risk of pulmonary embolism or AFib, rheumatoid arthritis, and congestive heart failure. Prescription drugs can be extremely expensive, and you will not want to go without some sort of coverage.”

To get Medicare coverage for prescription drugs, you’ll either need to enroll in a Medicare Part D or a Medicare Part C plan with prescription drug coverage.

Does Medicare cover prescriptions?

Prescription drug coverage through Medicare is optional. People with Medicaid or people formerly enrolled in State Pharmaceutical Assistance Programs (SPAPs) are automatically enrolled into Part D plans when they age into Medicare. Others must sign up specifically for a prescription drug plan.

Medicare Part A (hospital insurance) covers inpatient hospital stays and skilled nursing facilities. Medicare Part B (medical insurance) covers outpatient care, including doctors’ services and tests. Together, Medicare Part A and Part B are known as Original Medicare and are funded by the federal government. This is one way to receive Medicare.

Another way to receive Medicare is through Medicare Part C (Medicare Advantage), which offers Medicare Part A, Part B, and often Part D through Medicare-approved private insurance companies. 

Medicare Part D (drug coverage) is also administered by private companies to provide prescription drug benefits. “Part D plans are sold separately from Parts A and B (considered traditional Medicare). Many Part C (or Medicare Advantage plans) also contain drug coverage at no additional cost,” says Kronk.

Although other parts of Medicare may cover the cost of certain drugs under limited circumstances, the purpose of Medicare Part D is to help lower the prescription drug costs you take regularly at home, which are not covered by Original Medicare.

RELATED: Understanding Medicare Part D plans

What prescriptions are covered by Medicare?

Part A drug coverage

Medicare Part A will only cover drugs administered in an inpatient setting, such as receiving a prescription drug during a hospital stay. If you are prescribed a medication to take at home after being discharged from the hospital, Part A will not cover the costs of that medication.

Part B drug coverage

While most drugs that Medicare Part B covers are those administered by a healthcare provider in a doctor’s office, it does cover some outpatient prescription drugs. Examples of prescriptions covered by Part B in some circumstances include:

• Some drugs that are used with durable medical equipment (DME), like an infusion pump or a nebulizer
• Injectable osteoporosis drugs
• Some oral End-Stage Renal Disease (ESRD) drugs
• Transplant or immunosuppressive drugs if Medicare covered the organ transplant
• Some oral cancer drugs
• Oral anti-nausea drugs taken as part of a chemotherapy regime
• Some self-administered drugs in hospital outpatient settings

Some vaccines and immunizations are also covered by Part B, including those for flu, pneumonia, Hepatitis B, and COVID-19.

Part D drug coverage

On the other hand, prescription drugs that are taken regularly at home are covered by Medicare Part D. While most drug plans under Part D will have their own list of covered drugs, known as a formulary, all plans generally include both brand-name and generic drugs, as well as at least two drugs from each of the commonly prescribed drug categories. 

Additionally, Part D plans are required to cover nearly all drugs in Medicare’s Six Protected Classes of drugs. This helps ensure that beneficiaries can get the prescription drugs they need. These classes of drugs include the following: 

• Immunosuppressants: These drugs are commonly used to reduce the strength of the body’s immune system to prevent organ rejection after a transplant. 
• Antidepressants: These drugs are used to help treat depression and anxiety disorders.

• Antipsychotics: These drugs are used to help treat forms of psychosis. 

• Anticonvulsants: These drugs are used to treat seizure disorders. 

• Antiretrovirals: This group of drugs is commonly used to treat HIV/AIDs. 

• Antineoplastics: Also known as anticancer drugs, antineoplastic drugs are used to treat cancer. 

Drugs that are not covered by Medicare

While Part D covers prescriptions for a wide variety of medical conditions, not all drugs are covered. Some examples of prescription drugs that are not covered by Medicare Part D include:

• Brand-name drugs when a generic version is available
• Drugs used to treat anorexia, weight loss or gain
• Over-the-counter medications
• Prescription vitamins and mineral products, except prenatal vitamins 
• Drugs used for the treatment of sexual or erectile dysfunction

It’s also important to know that the plan’s formulary might not include the specific drug prescribed to you. In this case, a similar drug should be available; however, when this is not the case, you or your prescriber can request a formulary exception. If one or more of your prescriptions are not included in your plan’s formulary, you can change your plan during the Open Enrollment Period, which is from Oct. 15 to Dec. 7.

Note: Medicare supplement plans, like Medigaps, will not provide you with additional drug coverage. Medigaps only help subsidize the cost-sharing associated with Original Medicare. These policies do not include any drug coverage at all.

How to get Medicare drug coverage

There are two ways to get Medicare drug coverage: Medicare Advantage Plans (Part C) with drug coverage and stand-alone Medicare drug plans (Part D).

Medicare Advantage Plans (Part C) with drug coverage includes all your Part A (hospital insurance) and Part B (medical insurance) benefits in addition to Part D (prescription drug coverage) coverage. However, some Medicare Advantage plans do not include drug coverage, so you will want to verify this before enrollment. Additionally, Medicare Advantage plans have a fixed network of providers, unlike Original Medicare plans that can be used anywhere that accepts Medicare. 

Medicare Part D plans add drug coverage to Original Medicare plans. You must already be enrolled in either Part A or Part B to get Medicare prescription drug coverage through a Part D plan.

Eligibility and enrollment

Those who are eligible for Medicare are also eligible for Medicare Part D coverage. This includes those who are 65 years old, those who have received Social Security Disability Insurance (SSDI) benefits for at least 24 months, and those who have been diagnosed with End-Stage Renal Disease.

Once you have determined eligibility, you can enroll in a Medicare Part D plan during your seven-month Initial Enrollment Period, which starts three months before the month you turn 65 and ends three months after the month you turn 65. 

For those who are eligible because of a disability, your Initial Enrollment Period begins three months before your 25th month of receiving Social Security benefits and ends three months after your 25th month of getting those benefits.

The Initial Enrollment Period varies for people with ESRD and ALS based on their situation.

You can also make changes to your Medicare prescription drug plan during the Open Enrollment Period for Medicare Advantage and Medicare drug plans. The annual Open Enrollment Period begins Oct. 15 and ends Dec. 7. Changes to coverage made during this time will start on Jan. 1 of the following year. Examples of changes that can be made during this period include: 

• Changing from Original Medicare (Part A or B) to a Medicare Advantage Plan (Part C)
• Changing from a Medicare Advantage Plan (Part C) to Original Medicare (Part A or B)
• Switching to a different Medicare Advantage Plan (Part C)
• Switching to a different Medicare drug plan (Part D)
• Enrolling in a Medicare drug plan (Part D) if you are switching from a Medicare Advantage Plan (Part C) to Original Medicare (Part A or B)

Costs and savings

Although Medicare Part D does help beneficiaries save on prescription drugs, it’s not free. The specific out-of-pocket costs will vary based on the plan you choose. Each plan will have its own yearly deductible, monthly premium, copayment, coinsurance, and coverage gap. 

Additionally, there may be a late enrollment penalty for Medicare beneficiaries who are not enrolled in Part D or other creditable drug coverage for a continuous period of 63 days or more after their Initial Enrollment Period for Part D coverage ends. This late enrollment penalty is permanently added to your monthly premium for as long as you have Part D coverage unless you qualify for Extra Help or demonstrate that you received bad information from your insurance company about creditable coverage. 

The exact cost of the penalty depends on how long you went without creditable prescription drug coverage after you became eligible for Part D coverage, which may change each year. 

Even with Medicare assistance, the cost of prescription drugs can add up. There are, however, additional savings options to further reduce the costs associated with Medicare Part D. Some of these options include:

• Medicare Part D Extra Help: This assistance program helps people with limited income and resources pay for the costs associated with Medicare drug plans, including yearly deductibles, monthly premiums, and coinsurance.
• Senior Savings Model: Medicare beneficiaries in participating Part D drug plans can get additional savings on insulin through the Senior Savings Model. This program allows drug plans to offer discounted insulin.
• SingleCare: This free program offers discounts on medications, whether you have a prescription drug coverage plan or not. Compare pharmacy prices, get a free discount card, and save up to 80% on your medications at more than 35,000 nationwide pharmacies. Get your free prescription discount card here.

RELATED: Can I use SingleCare while I’m on Medicare?

How to choose a Medicare drug plan

Before selecting a Medicare drug plan, consider all your options and choose the best plan for your specific needs. First, compile a list of your current prescription drugs and how frequently you have them filled, as well as your current health plan coverage. You can then use this information to compare plans on medicare.gov or by calling 1-800-Medicare and speaking with a counselor about your options. 

Be sure to consider each plan’s formulary and all associated costs, as well as any restrictions like prior authorization or step therapy, which typically requires you to try one of the less-expensive drugs on the plan’s formulary before your drug plan pays for a more expensive drug for that same medical condition. Medicare drug plans may also limit the number of prescription drugs they cover over a certain period.

Lea este artículo en español aquí.

Sources

• Formulary guidance, Centers for Medicare & Medicaid Services (2023)
• Exceptions, Centers for Medicare & Medicaid Services (2023)
• Medicare prescription drug plans, benefits.gov
• Original Medicare (Part A and B) eligibility and enrollment, Centers for Medicare & Medicaid Services (2023)
• Part D Senior Savings Model, Centers for Medicare & Medicaid Services
• Explore your Medicare coverage options, medicare.gov