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One of the first questions people ask when they sign up for Medicare is, “Does Medicare pay for prescription medications?” Unfortunately, the answer isn’t a simple “yes” or “no.” Here are a few tips to help you understand when Original Medicare will cover your medications.
When does Medicare pay for prescription medications?
Original Medicare is broken into two parts, Part A and Part B. Part A covers your care when you are an inpatient in a hospital or skilled nursing home, or if you are under hospice care.
Generally speaking, if you receive medication while you are an inpatient, those medications are covered under Part A.
Part B, on the other hand, is more complicated. For the most part, medications you take yourself at home are not covered—but there are definitely exceptions. For example, Part B will generally pay for insulin used in an insulin pump, and for medications you use with a nebulizer to treat various lung disorders. It will also pay for injectable prescription drugs at home, even if you administer them yourself, such as blood clotting factors and osteoporosis injections. It also covers oral chemotherapy drugs and oral anti-nausea drugs to treat the side effects of chemotherapy, with a few limitations.
If you’re wondering, “Does Medicare pay for prescription medications if I’m under hospice care,” in most cases, the answer is yes. Part A pays for hospice care, and under Original Medicare rules, prescription medications for relief of pain and other symptoms are covered, if you’re under hospice care.
How can I get Medicare coverage for prescription medications?
Although Medicare Part D coverage for prescription drugs is technically considered voluntary, you may be penalized if you don’t sign up as soon as you are eligible. You can avoid the penalty if you have prescription drug coverage through another source, such as an employer or union plan, that is at least as good as Part D coverage. If you wait to enroll and go without creditable coverage, you’ll pay a late-enrollment penalty with your monthly premium for as long as you have Part D.
You have two options for Part D coverage for prescription drugs: A stand-alone Medicare Prescription Drug Plan ( PDP), or a Medicare Advantage plan that includes prescription drugs coverage (MAPD). The stand-alone prescription drug plan can complement Original Medicare, as well as certain types of Medicare Advantage plans.
Of the most popular Medicare Advantage plan types, which are health maintenance organizations (HMOs) and preferred provider organizations (PPOs), the majority include Part D coverage for prescription drugs. If you choose a Medicare Advantage HMO or PPO plan with Part D coverage for prescription drugs, you generally cannot enroll into a stand-alone Part D Plan. In fact, if you do enroll in a stand-alone plan when you have Medicare Advantage with prescription drug coverage, you may be automatically re-enrolled in Original Medicare.
On the other hand, if you are in a private-fee-for-service (PFFS) plan or Medicare Savings Account (MSA) plan, for example, you can purchase stand-alone Part D coverage for prescription drugs.
How does Medicare pay for prescription drugs if you have a Part D plan?
Under federal law, all Medicare Part D Prescription Drug Plans must offer a minimum level of benefits and cover certain prescription drugs to treat most conditions. This list of covered medications is called a “formulary,” and all Medicare Part D Prescription Drug Plans use a formulary to determine how they pay benefits.
Medicare PDPs may have a yearly deductible; you will also have either a coinsurance or copayment amount when you fill a prescription. Many plans use a tiered copayment system, where generic drugs have the lowest copayment amount, and rare or brand-name medications have the highest copayments. The insurance companies can change their formularies from time to time, but they are required to notify you in advance if a formulary change will affect you.
If you’re wondering if Medicare pays for your prescription medications, you can use our Part D Prescription Drug Plan shopping tool. If you take prescription drugs on a daily basis, it’s especially important to compare the different Medicare PDPs to find one that offers the best coverage for those medications. It’s important to remember, however, if you’ve been taking a particular medication that’s not on your plan’s formulary, you or your doctor can request a formulary exception to get your medication covered.
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