Medicare covers prescribed chemotherapy drugs. How and where a person receives chemotherapy helps determine which Medicare part provides the coverage.
When a person receives a cancer diagnosis, their doctor may prescribe chemotherapy drugs. People can take these by mouth or through an intravenous (IV) line.
Medicare helps pay for chemotherapy deemed medically necessary.
Medicare is a federal health insurance plan for people aged 65 and older. Younger people with a disability may also be eligible for coverage. Medicare has several parts that provide different benefits:
- Part A covers in-hospital care.
- Part B covers outpatient services, including doctor visits, preventive care, and durable medical equipment.
- Part D covers many prescribed medications.
How a person receives the treatment and in what setting determines which Medicare parts cover the costs and which out-of-pocket expenses apply.
In this article, we discuss how Medicare covers chemotherapy and how a person might fill 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.
When a doctor who accepts Medicare insurance prescribes cancer treatment, Medicare covers some of the costs. Each part of Medicare can cover different aspects of chemotherapy.
Which Medicare parts cover chemotherapy
Medicare parts A, B, or D may provide coverage. Part A covers oral and IV chemotherapy when a person receives it as an inpatient in a hospital.
Part B pays for some oral chemotherapy medications. It may also cover IV chemotherapy that a person receives in a doctor’s office or freestanding clinic. Copayment and coinsurance costs may apply.
Part D, which provides prescription drug coverage, may cover some chemotherapy medications that Part B does not. A person should check their provider’s list of covered medications for more information.
Inpatient chemotherapy
Medicare Part A is insurance for costs relating to care during hospital admission. For people with cancer, it generally covers:
- hospital admission for cancer treatment
- inpatient breast reconstruction procedures after a mastectomy
- care at a skilled nursing facility after a 3-day hospital admission
- certain rehabilitation services
- hospice care
Outpatient chemotherapy
Medicare Part B may cover the costs of outpatient treatments. These must be Medicare-approved, medically necessary, and related to cancer treatment.
A person can check which services and treatments are covered 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, Part D may cover the costs. A person must have original Medicare, which is parts A and B, to join a Medicare Part D program. Enrollment is not automatic.
Medicare Part D is a prescription drug plan that private insurance companies offer. Each company determines which medications are covered by its plans and publishes a formulary, which is a list of these medications.
Some Part D plans cover oral and IV chemotherapy. Most policies cover:
- oral chemotherapy drugs
- drugs to treat nausea
- prescription drugs used in cancer treatment, including pain medication
The companies put different drugs on different tiers, or levels. This system helps determine a person’s out-of-pocket expenses.
While the exact costs vary from person to person, certain programs may help offset some of these expenses.
Out-of-pocket costs
These can include charges for doctor visits and chemotherapy treatments.
The average out-of-pocket cost can depend on:
- the type of cancer
- how aggressive it is
- how much and what kind of chemotherapy is prescribed
- whether Medicare covers the recommended chemotherapy
- which Medicare plan a person has
A doctor who accepts assignment from Medicare must follow certain rules. Assignment means that they cannot charge more than the Medicare deductible and coinsurance amounts. They also need to submit the claim directly to Medicare and cannot charge the person for the claim.
Costs of chemotherapy have risen over the years. In 2018, people with cancer in the United States paid about $5.6 billion out of pocket for treatment. A 2017 study showed that the average out-of-pocket expenses for participants with Medicare were
In 2019, researchers looked at out-of-pocket costs associated with Medicare Part D. They found that the average in 2019 was $2,622–16,551. However, these costs varied, depending on the medication prescribed.
Medicare Advantage plans, also known as Part C, and supplement insurance plans, also known as Medigap, may help cover gaps in regular Medicare’s coverage.
Private insurance companies provide Medicare Advantage plans. The companies’ plans must provide the primary benefits of Medicare parts A and B. They can also offer the benefits of Part D and additional benefits. Each company can decide what added coverage to provide.
All Medicare Advantage plans are different, and it is essential to understand the rules and costs that may apply. A person can compare the plans offered 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:
- deductibles
- copayments
- coinsurance
They can also offer extra benefits, such as coverage when traveling outside of the U.S.
A person can weigh their options using the Find a Medigap policy that works for you tool.
Medicare parts A, B, C, D, and Medigap help pay some costs of chemotherapy treatment.
Part A pays for many inpatient treatments, while Part B covers outpatient oral and IV chemotherapy. Part D may help cover costs associated with some medications.
Medicare Part C, also known as Medicare Advantage, and Medigap may help cover out-of-pocket expenses. Private insurance companies sell these plans, which offer differing levels of coverage and benefits.