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Does Medicare Cover Prescription Drugs?

En español | Yes, Medicare covers prescription drugs, primarily through Medicare Part D plans.

These plans — sold by private insurance companies either on their own or through Medicare Advantage plans, in which private insurers bundle Medicare Part A hospitalization, Part B doctor visits and outpatient services and often Part D prescription drugs into one plan — help pay for most outpatient prescriptions (essentially, medications you take yourself outside of a professional health care setting). Other parts of Medicare generally cover drugs that medical professionals at a hospital, doctor’s office or specialty clinic dispense, such as dialysis or intravenous chemotherapy.

Nearly 45 million people, or 70 percent of Medicare beneficiaries, were enrolled in Part D plans in 2019. Participation has more than doubled since Medicare introduced the program in 2006, when 22 million people signed up.

Brand-name drugs cost you more

Medicare drug plans’ “formulary,” the name given to the list of medications covered, includes both generic and brand-name medications, but you will generally have higher out-of-pocket costs for brand-name prescriptions. Formularies vary from plan to plan, but federal law requires that all Medicare drug coverage include at least two drugs in the most commonly prescribed treatment categories and all drugs in the following categories:

  • Anticancer drugs except where covered via Part B
  • Anticonvulsive treatments for seizure disorders
  • Antidepressants
  • Antipsychotic medications
  • HIV/AIDS drugs
  • Immunosuppressant drugs

Part D also covers most vaccines. 

Over-the-counter meds are on you

Medicare Part D does not pay for over-the-counter drugs, such as cold medicines or antacids, nor does it cover drugs for hair loss, erectile dysfunction or weight control, even if they are prescribed to treat those issues.

You can use Medicare’s plan compare tool to shop for Part D coverage. AARP’s Medicare Made Easy guide has more information on prescription drug plans and other aspects of Medicare enrollment and coverage.

What Medicare drug plans cost

Medicare drug coverage carries premiums beyond what you pay for original Medicare.

Part D premiums vary by plan. In 2020 the average base monthly premium is $32.74 a month, according to the Centers for Medicare & Medicaid Services.

The base rate is what most enrollees pay for their Part D plan. But if you earn more than a certain amount, you are subject to a rate adjustment that Medicare sets.

In 2020, this adjustment starts at $12.20 a month above your regular Plan D premium if the gross income reported on your tax return is more than $87,000 for a single filer or $174,000 for a married couple filing jointly. It rises in steps to $76.40 a month above the base rate for incomes of more than $500,000 for singles or $750,000 for couples.

Copayments or coinsurance will have to be paid on most prescriptions, in addition to premiums. Your plan also may carry an annual deductible.

You’ll pay in full for prescriptions until you hit that deductible, after which Medicare starts paying its share. Deductibles vary among plans but by law cannot exceed $435 in 2020.

Medicare’s Extra Help program offers financial assistance to people with low incomes or limited resources to meet their Medicare prescription drug costs.

Editor's note: This article was originally published on July 15, 2015. It has been updated with the latest information regarding Medicare coverage in 2020.

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