A person with Medicare cannot use a drug discount coupon with their prescription drug plan. However, an individual can choose to use coupons instead of their Medicare drug coverage.

Some manufacturers and pharmaceutical companies may offer discount coupons on drugs. However, a law known as the Anti-Kickback Statute makes it illegal for people enrolled in Medicare to use manufacturer coupons or other drug discounts along with their drug plan.

This article discusses drug discount coupons and services, as well as the associated rules for people enrolled in Medicare. It then looks at the Medicare drug plans and when a person might want to use coupons instead. Finally, it considers alternative ways to reduce prescription drug costs.

Glossary of Medicare terms

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.
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Drug coupons offer a discount on the cost of named prescription drugs. The drug manufacturer or a pharmacy selling the medication may provide the coupons. Discount drug companies may also offer the coupons.

An individual enrolled in a Medicare prescription drug plan cannot use drug coupons to help them pay for their prescription medications while using their Medicare coverage. This rule applies to people enrolled in the following plans:

  • Original Medicare (Part A and Part B)
  • a Medicare (Part D) prescription drug plan
  • a Medicare Advantage (Part C) plan with prescription drug coverage

As mentioned previously, this is due to the Anti-Kickback Statute, a law that prohibits people with Medicare from also using drug manufacturer coupons.

However, Medicare beneficiaries can choose to use a drug discount coupon instead of their Medicare coverage. A drug coupon could reduce the cost of drugs not covered by Medicare. It could also help pay for drugs with restrictions, such as quantity limits or requirements for prior authorization.

People without health insurance or with private health insurance can use drug coupons.

Read about Medicare vs. private insurance.

Drug discount companies offer free services to help their members purchase prescription drugs. These services can help insured and uninsured people save money on medications

The discount service company negotiates the drug price directly with pharmacies for savings that it can pass on to its members. The company then publishes the prescription drug prices, and members can search for their medication.

People can compare these prices with their Medicare Part D plan formulary, a list of prescription drugs covered by Medicare. Individuals can calculate whether it is cheaper to use their Medicare coverage or the discount service.

A person’s medication may be less costly with the drug discount service than with their Medicare prescription drug coverage. However, a person with Medicare can use the drug discount service only when they pay out of pocket for their prescriptions.

A person cannot use both Medicare coverage and the drug discount service.

On January 1, 2023, a new prescription drug law went into effect that can help people with Medicare save money. It improves access to affordable treatments and helps strengthen the overall Medicare program.

This law helps people with Medicare save in various ways.

Insulin costs

The new prescription drug law helps people have lower costs for insulin when using Medicare.

With Medicare Part D, if a person does not pay a deductible, the drug plan cannot charge more than $35 for a 1-month supply of covered insulin. This includes people in the Extra Help program to lower the cost of prescription drugs.

So, for example, if an individual gets a 3-month supply of insulin, they will pay no more than $105. This is the equivalent of $35 per month of supply.

If a person has equipment or insulin that is covered by Medicare Part B or a Medicare Advantage plan, the cost is the same. This means they also can pay no more than $35 per 1-month supply.

Read more about Medicare Part D vs. Part B.

Negotiation of drug costs

This new law makes it possible, for the first time, for Medicare to be able to negotiate the price of certain medications directly with the manufacturers. These medications are specific high costing, brand-name Part B and Part D prescription drugs that do not have generic competition.

The first 10 drugs that Medicare is negotiating the price for include:

The negotiated prices for these medications will become effective in 2026.

Medicare has several plans, which offer various levels of drug prescription coverage.

Original Medicare (Part A and Part B)

Original Medicare does not provide drug prescription coverage. However, a person can choose to add prescription drug coverage through a Medicare prescription drug plan, called Part D.

Medicare Part D

Most Medicare prescription drug plans include both generic and brand-name prescription medications. They provide a formulary of those drugs and their costs.

Some plans put their covered prescription drugs into different levels, called tiers. Within each tier, the medications have a set copay. They generally range in cost, starting with generic drugs and going up to the highest cost prescription drugs.

Medicare Advantage (Part C)

Many Medicare Advantage (Part C) plans do offer prescription drug coverage.

People can enroll in or make changes to a Medicare Part D or Medicare Advantage plan during various periods throughout the year:

  • The initial enrollment period runs for 7 months, starting 3 months before someone turns age 65 years.
  • The open enrollment period runs from October 15 through December 7.
  • The Medicare Advantage open enrollment period runs from January 1 through March 31. During this time, a person can change Medicare Advantage plans or choose to go back to Original Medicare. A person can also enroll in a Medicare Part D plan.

This online tool can help people find a plan that suits their needs.

Medicare prescription drug plans generally have monthly premiums, an annual deductible, copays, or coinsurance.

According to the National Council on Aging, the average cost of a Part D plan in 2024 is $55.50. However, if an individual has a gross income above $103,000, they have to pay additional amounts.

Most Medicare drug plans have a temporary limit on what they pay for prescription drugs. In 2024, the coverage gap begins after a person and their plan have spent $5,030 on covered drugs.

A person can choose to use drug discount coupons instead of their Medicare prescription drug plan. However, an individual may wish to consider several factors before making that decision.

For example, although a drug discount coupon may initially offer a particular medication at a lower cost than through a Medicare plan, canceling a Medicare prescription drug coverage plan could eventually lead to higher out-of-pocket expenses.

The higher expenses may occur if the drug discount price is available for only a certain amount of time or if coupons are for a single use. Without coupons, a person may have to pay full price for the medication. Without Medicare coverage, these costs could be considerable.

If a person drops their Medicare drug plan and then decides to re-enroll, they may have to pay a late enrolment penalty on each monthly plan premium.

If a person chooses to use their Medicare prescription drug coverage rather than a discount service or coupons, they may reduce costs in several ways.


An individual can ask their healthcare professional whether there is a cheaper option for the drug prescribed. Many drugs have generic versions that are cheaper than the brand-name medication.

Comparison shopping

Each pharmacy sets the prices of the drugs they sell. People can check prescription drug prices in several pharmacies to see which one offers the most cost savings. It could lead to lower out-of-pocket costs outside a person’s Medicare coverage.

It may also be possible for a person to save on prescriptions by using a mail-order pharmacy.

Coverage gap discounts

The Medicare coverage gap discount program is a federal government-approved option that provides manufacturer discounts for people who are enrolled in Medicare Part D and get the drugs covered by the plan.

Pharmaceutical drug manufacturing companies can join the program to lawfully offer discounts to Medicare beneficiaries.

Patient assistance programs (PAPs)

Drug manufacturers and the state government may offer PAPs to people with a low income. The programs may include free medications or financial assistance to help people pay their out-of-pocket prescription drug costs. However, not all states offer the program.

Medicare resources

For more resources to help guide you through the complex world of medical insurance, visit our Medicare hub.

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Because of the Anti-Kickback Statute, an individual cannot use discount drug coupons together with their Medicare prescription drug plan.

However, if an individual finds that their prescription is cheaper through a discount drug program, they can choose this option instead of using their Medicare plan.

Some states provide programs to help people with low incomes reduce the costs associated with their prescription drugs.