Medicare covers chemotherapy drugs when a doctor prescribes them. The type of chemotherapy will determine which Medicare part provides coverage.
When a person receives a cancer diagnosis, their doctor may prescribe chemotherapy drugs that can help fight the condition.
People can take chemotherapy drugs intravenously (IV) or orally. Medicare helps pay for medically necessary chemotherapy.
Medicare is a federal health insurance plan for people aged 65 and older. Younger people who have a disability may also be eligible. There are several parts to Medicare coverage with differing benefits:
- Part A covers in-hospital care.
- Part B covers outpatient services, including doctor visits.
- Part D covers many prescribed medications.
Depending on how a person receives chemotherapy drugs, and in what setting, will determine which Medicare parts cover the costs, and which out-of-pocket expenses will apply.
In this article, we discuss how Medicare covers cancer treatments, chemotherapy, and options a person has to help fill any gaps in coverage.
We may use a few terms in this piece that can be helpful to understand when selecting the best insurance plan:
- Deductible: This is an annual amount that a person must spend out of pocket within a certain time period before an insurer starts to fund their treatments.
- Coinsurance: This is a percentage of a treatment cost that a person will need to self-fund. For Medicare Part B, this comes to 20%.
- Copayment: This is a fixed dollar amount that an insured person pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
Medicare covers cancer treatments when prescribed by a doctor who accepts Medicare. Each of the different parts of Medicare covers various aspects of chemotherapy.
Which Medicare parts cover chemotherapy
Chemotherapy may be covered by Medicare parts A, B, or D, depending on the type of chemotherapy.
Medicare Part A covers oral and IV chemotherapy when a person stays in a hospital as an inpatient.
Medicare Part B pays for some oral chemotherapy medication and may also cover IV chemotherapy a person receives in a doctor’s office or freestanding clinic. Copayments and coinsurance may apply.
Medicare Part A is hospital insurance and will generally cover:
- hospital admission for a person’s cancer treatment
- skilled nursing facility care after a 3-day hospital admission
- home health care for rehabilitation services
- hospice care
- inpatient breast reconstruction procedures after a mastectomy
Some cancer treatments are outpatient services, and in these cases, Medicare Part B may cover the costs. Treatment must be Medicare-approved, medically necessary, and related to a person’s cancer treatment.
A person can check what services and treatments are covered by using Medicare’s online tool: Is my test, item, or service covered?
Medicare Part D
If Part B does not pay for a specific drug or treatment, coverage may be available through Part D.
Medicare Part D is a prescription drug plan offered by private medical insurance companies. Therefore, coverage options may vary. A person must have Medicare parts A, B, or both to join a Medicare Part D program, and enrollment is not automatic.
The private insurance company determines the medications covered in the plan. The company publishes a formulary, which is a list of medicines the company usually covers. Some Part D plans include both oral and IV chemotherapy medications. Most policies will cover:
- oral chemotherapy drugs
- drugs to treat nausea
- prescription drugs used in cancer treatment, including pain medication
The companies also put different drugs on specific tiers, or levels. The level the drug is on will affect a person’s out-of-pocket expenses.
The out-of-pocket costs can include charges for doctor visits and chemotherapy treatments.
The average out-of-pocket costs vary depending on:
- the type of cancer
- how aggressive the cancer is
- how much and the kind of chemotherapy prescribed
- whether Medicare covers the recommended chemotherapy
- which Medicare parts a person holds
Doctors who will accept assignment do not charge more than the Medicare-agreed amount, and this helps reduce a person’s out-of-pocket expenses.
A study from early 2015 showed the average out-of-pocket costs for cancer treatments with Medicare was $4,727.00.
The out-of-pocket expenses for people getting the same service could vary from $5,976.00 to $8,115.00, according to a second
Private insurance companies sell Medicare Advantage plans. The companies must cover the primary benefits of Medicare parts A and B. However, they can also include Part D and offer additional benefits. Each private company can decide what added coverage they will provide.
All Medicare Advantage plans are different, and it is essential to understand the rules and costs that may apply. A person can find and compare plans in their area on the Find a Medicare plan website.
Private insurance companies also sell Medigap plans. These plans help cover additional costs, such as:
They can also offer extra benefits, such as coverage when traveling outside of the United States.
A person can find Medigap policies using the online Medicare tool, Find a Medigap policy that works for you.
A person’s decision to begin chemotherapy may be less daunting knowing that treatment is financially covered.
Together, Medicare parts A, B, C, D, and Medigap help pay some costs of chemotherapy.
Medicare Part A pays for many inpatient treatment options. Medicare Part B covers outpatient chemotherapy, both oral and IV.
Medicare Part D may help cover some medications that are not elsewhere covered.
Medicare Part C and Medigap may help cover out-of-pocket expenses. Private insurance companies sell them, and as such, differing levels of coverage and benefits may apply.