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 chosen.
Medicare Part D offers the broadest prescription coverage based on meeting specific plan criteria. But Medicare Part A and Part B also offer limited prescription drug coverage.
Let’s take a closer look at the different Medicare Parts and prescription coverage.
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, skilled nursing center stays, hospice, and home health when certain criteria are met. Medications you receive as part of your care are generally covered.
In some cases, if Part A doesn’t cover your home health costs, Part B may cover them. Under Part A, you must have a 3-day hospital inpatient stay or have a skilled nursing center stay for home health to be covered. Part B doesn’t have this requirement.
For skilled nursing 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 health care benefits.
Under hospice care, there’s a 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 anti-nausea medications are covered by Part B.
Some medications covered by Part B include:
- flu vaccine
- pneumococcal vaccine
- Hepatitis 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 anti-nausea medications
- erythropoietin-stimulating drugs, like epoetin alfa (Procrit) for anemia
- tetanus shot after an injury
- osteoporosis injectable medications after a fracture in post-menopausal 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 B drugs.
Part D (prescription drug coverage)
Part D plans cover the cost of Food and Drug Administration (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 14 lettered plans, from A to N.
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.
In addition to these programs, there are advocacy groups and nonprofits that help with prescription costs. Also, when signing up for a Part D plan, look at cost savings that are available based on the medications you take.
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.
There are a few exceptions to Medicare eligibility. If you have ESRD, you’re 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 MA plan.
Important Medicare deadlines
- Jan. 1–March 31. You can join Original Medicare during this time (Part A and B), and you can change or drop Medicare Advantage plans with Part D coverage during this time.
- April 1-June 30. During this time frame, if you never enrolled in a Part D plan when you joined Medicare Part A and B, you can join one time. To make plan changes or to drop Part D after the first time, you must wait for the open enrollment period in October.
- Oct. 15–Dec. 7. This is open enrollment for Medicare Part D. You can join, change, or drop a plan during this time each year. New benefits start in January. Remember, Medicare adds a 1 percent penalty for as long as you have Medicare if you don’t have drug coverage and don’t join a Part D plan within 63 days of your eligibility period. Even with Medicare Advantage plans, you need a Part D plan added.
- Around your 65th birthday. You can join Medicare Part A and B and add Part D coverage from 3 months before to 3 months after your 65th birthday. If you receive Social Security benefits, you’ll automatically be enrolled in Part A and B when you turn 65. You’ll need to add Part D coverage if you don’t have drug coverage from another source like an employer, the VA, your union, or another source.
- Special enrollment deadline. You don’t have to join Medicare at 65 if you have coverage from your employer or other sources. The coverage needs to be at least as good as Original Medicare. Once that coverage stops, you have 8 months to enroll in Medicare or face premium penalties. This includes Part D coverage.
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.
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.
To learn more about medication coverage and specific parts, call 1-800-MEDICARE (1-800-633-4227) or visit Medicare.gov.
You can also talk to someone at the State Health Insurance Assistance Program (SHIP) in your state.