There are many misunderstandings about Medicare coverage, especially prescription drug coverage. The four parts (A, B, C, D) cover different healthcare services, from hospital stays and doctor visits to prescription drugs and other benefits.
Medicare parts B and D both offer prescription drug coverage under different federally set guidelines. While Part B only covers select types of medications under specific conditions, Part D offers broader drug coverage.
Both require you to pay premiums based on your income and there are copays, deductibles, and other out-of-pocket costs. We’ll look at the specific differences in prescription coverage between parts B and D.
Medicare Part B covers many outpatient health and medical services, including:
- doctor visits
- preventive screenings
- some vaccines and medications
- outpatient hospital services
- mental health services
- skilled nursing and long-term care, when eligibility requirements are met
You can check Medicare’s website to see if your specific test or service is listed.
Part B also covers some prescription drugs depending on if you meet specific criteria. Most medications covered by Part B are administered by a health professional.
Some examples of medications Part B covers include:
- vaccines: flu, pneumonia, hepatitis B
- certain injectable and infusion medications
- some transplant medications
- medications given by nebulizers
- end stage renal disease (ESRD) medications
There are out-of-pocket (OOP) costs you will pay for Part B including premiums, deductibles, and coinsurance. The rates change from year to year, and your OOP costs also depend on your earned income.
According to the Centers for Medicare and Medicaid Services (CMS), average monthly premiums for Part B in 2020 are $144.60, and the deductible is $198. This is an increase from 2019 rates.
In addition, you must pay a 20 percent coinsurance for certain services after meeting your deductible. This includes doctor’s fees and medications. Medigap supplementary plans can help with coinsurance and other OOP costs.
According to the Kaiser Family Foundation, of the 60 million people covered by Medicare, 1 in 5 have five or more chronic conditions. Medications account for a large part of costs for beneficiaries. Almost $1 for every $5 spent on Medicare services is for medications.
A few medications are responsible for a large majority of money spent on Medicare Part B drug costs. In 2015, only 22 medications accounted for 30 percent of prescription drug costs for Part B, totaling $7.4 billion.
Part B covers some very expensive medications, such as:
You can check here for a list of what’s covered in Medicare Part B. If you take medications on the list, having Part B may save you a lot of money.
Medicare Part D covers most of the outpatient medications that you would get from your local pharmacy, mail-order pharmacy, or another pharmacy provider.
Depending on the plan, Part D covers medications not covered by parts A or B. Plans are offered by private insurance companies and there are many choices based on where you live.
Enrollment happens between October 15th and December 7th every year during open enrollment. You’re not automatically enrolled, and there’s a penalty if you don’t have some type of drug coverage.
CMS requires all plans to cover at least two medications from the most prescribed therapeutic classes.
Part D does not cover:
- fertility medications
- medications for weight loss or weight gain
- cosmetic agents, such as for hair loss
- erectile dysfunction medications
- over-the-counter medications or supplements
Part D plans must cover medications from these six classes:
Individual plan costs vary depending on:
- where you live
- your income
- coverage you want
- what you want to pay OOP
All Part D plans have a coverage gap commonly called a “donut hole.” In 2020, while you’re in the gap, you must pay 25 percent of the cost of medications until you meet the plan limit. There are substantial discounts for brand name drugs to help offset higher costs while you’re in the gap.
Medicare Part D is an important benefit to help pay for prescription drug costs. Medicare pays a large part of drug costs but you still have to pay some portion. Since the cost of medications has steadily increased over the years, having Part D coverage can save you significantly on your medications.
Also, even though Part D is voluntary, if you don’t have some drug coverage, there’s a penalty that will be added to your premium forever. So, it’s beneficial to select a part D plan when you’re eligible, even if you currently don’t take any medications.
FINDING A MEDICARE PRESCRIPTION PLAN
To learn more about Medicare parts B and D, check with these resources:
There are several options when it comes to choosing Medicare Part B and Part D plans for prescription drug coverage.
They offer different prescription coverage, and it’s usually not an either/or choice. You may need both plans to save the most on your prescription drug costs depending on your healthcare needs.
When choosing a plan, consider the following:
- what medications are covered
- if your doctor and pharmacy are on the plan
- the OOP costs
- the plan rating (5-star plans are more expensive)
- if you need injections at the doctor’s office
- each plan’s limits for medication coverage
- the coverage gap in 2020, which starts at $4,020
- if you need supplemental insurance
- the other costs that don’t count toward your OOP costs
Medicare parts B and D cover prescription medications in different ways based on meeting eligibility criteria. Most people have both plans to help pay for medications depending on their overall health.
Part B covers only select medications, while Part D covers many medications you get from your local pharmacy or other pharmacy providers.
There are many plans and eligibility rules based on your income, what you want to pay out of pocket, and what type of coverage you want.
For those who need it, Medicare can also help with premiums and OOP costs through the Extra Help program.