Medications are expensive, and according to a new Kaiser Family Foundation poll, 23 percent of older adults say they’re finding it hard to pay for their prescription medications. Affordable drug coverage is important for most Americans.
The good news is there are thousands of Medicare plans that can help offset prescription drug costs. Medicare has several different parts that offer prescription benefits based on the individual plan you choose.
Medicare Part D offers the broadest prescription coverage based on meeting specific plan criteria. But other parts of Medicare also offer different levels of drug coverage.
Let’s take a closer look at the different parts of Medicare and the plan options available.
Medicare has four major parts that offer different benefits: hospital (Part A), outpatient medical (Part B), prescription drugs (Part D), and Medicare Advantage (Part C), which covers many of these options and a few other extras.
Part A (hospital)
Medicare Part A covers hospital stays, limited skilled nursing facility stays, hospice, and home healthcare when certain criteria are met. Medications you receive as part of your care are generally covered.
For skilled nursing facility stays, if Part A doesn’t cover your medications, your Part D plan may cover them. There are no deductibles for skilled nursing, hospice, or home healthcare benefits. Under hospice care, there may be a small copay for medications.
Part B (medical)
Part B provides coverage for limited prescription medications that are usually given at a doctor’s office, dialysis center, or other outpatient hospital settings. The medications must be administered by a licensed healthcare provider.
Generally, these are medications given by injection or infusion and not self-administered by you. But some oral cancer chemotherapy medications and antinausea medications are covered by Part B.
Some medications covered by Part B include:
- flu vaccine
- pneumococcal vaccine
- bepatitis B vaccine for people who are at moderate to high risk for hepatitis B, such as people with end stage renal disease (ESRD)
- some cancer medications
- some antinausea medications
- erythropoietin-stimulating drugs, like epoetin alfa (Procrit) for anemia
- tetanus shot after an injury
- osteoporosis injectable medications after a fracture in postmenopausal women
- immunosuppressant medications after transplant
- enteral and parenteral nutrition given intravenously or by feeding tube
- intravenous immunoglobulin
Part C (Medicare Advantage)
Medicare Advantage plans include HMO and PPO options. These plans may also have options for some extra benefits, like dental, vision, and hearing.
If you enroll in a Medicare Advantage plan, you can choose Part D coverage as part of your benefits. You can’t have Part C and a separate Part D plan for drug coverage. All Part C plans must cover Part A and Part B drugs.
Part D (prescription drug coverage)
Part D plans cover the cost of FDA-approved prescription medications not covered by Part A or Part B.
Covered drugs are based on the specific plan you choose and the plan’s formulary or covered drug list. Your prescription costs depend on your out-of-pocket costs like deductibles and copays.
Part D does not cover certain excluded medications, like:
- over-the-counter medications
- cosmetic agents
- fertility medications
- weight loss medications
Medigap can be added to your Part A and B coverage to help pay for out-of-pocket costs like copays and deductibles. There are 10 letter-named plans available.
Different insurance companies carry different plans. However, Medigap insurance plans don’t cover prescription drugs. Also, you can’t carry both Medigap insurance and a Part C plan.
Other options to help with prescription drug costs include:
- Federally qualified health centers (FQHCs). These are federally funded health centers that can sometimes help lower your copays for prescription medications. You can ask if you’re eligible for copay help.
- Part D Low-Income Subsidy (LIS). Also called Extra Help, this program helps pay for premiums and lowers medication copays. If you qualify, you’d pay $3.60 for generic and $8.95 for brand medications in 2020. You might qualify for full or partial help. You still need to select a Part D plan and might be eligible to enroll during the special enrollment period if you qualify for Extra Help.
- Patient Assistance Programs (PAPs). These are offered directly through pharmaceutical companies. You may be eligible for discounts or pay nothing for your medication. Ask your doctor if you are eligible and about enrollment.
- State Pharmaceutical Assistance Programs (SPAPs). These programs help pay for prescriptions and other drug related costs. Check to see if your state has a plan and if you qualify.
You’re eligible for prescription drug benefits when you become eligible for Medicare. For most people, you become eligible 3 months before to 3 months after your 65th birthday.
If you’re getting Social Security benefits, you’re eligible for Medicare and will be automatically enrolled in Part A and B.
If you have ESRD, you may be eligible for Medicare before you turn 65. Also, if you’ve received Social Security disability payments for at least 2 years, you’re eligible 3 months before to 3 months after your 25th month of receiving benefits. You can also enroll in a Part D plan or Medicare Advantage plan.
You can also enroll for Part D coverage or change plans if your plan no longer provides coverage, you move to an area where your plan doesn’t offer coverage, you qualify for extra help, or other special circumstances apply.
To enroll in a Part D plan, you have several options. You can enroll:
- online through the Medicare plan finder tool
- by calling Medicare directly at 800-MEDICARE (800-633-4227)
- by contacting a private insurance company that offers the Part D plan you want, or visiting the company’s website to submit an application
If you decide on a Medicare Advantage plan to provide your prescription drug coverage, there are two ways to sign up:
- Online. Shop for Part C plans with Medicare.gov’s plan finder tool.
- With a private company. Insurance companies offer Part C plans, and you can enroll directly with them via their website or by phone.
When you enroll, be prepared to provide some basic information about yourself. You’ll also need to have your Medicare card ready to give your Medicare number and the date that your original Medicare coverage began.
Prescription medications are covered in a few different ways with Medicare. There are thousands of Part D plans and Medicare Advantage plans to choose from depending on where you live. Part A and B offer limited prescription coverage.
Choose the best plan based on the medications you take and the out-of-pocket costs of the plan.