Are Pharmacy Benefits Covered With Medicare Supplement?
Navigate prescription drug coverage with Medicare Supplement plans. Understand what's covered and how to secure your medication benefits.
Medicare Supplement plans, often called Medigap, assist with out-of-pocket costs associated with Original Medicare. This article clarifies how pharmacy benefits integrate within the Medicare framework, detailing the roles of Medigap and other Medicare components in covering prescription medications.
What Medicare Supplement Plans Cover
Medicare Supplement plans are private insurance policies that work alongside Original Medicare, which consists of Part A (hospital insurance) and Part B (medical insurance). These plans help cover certain costs that Original Medicare does not, effectively filling in the “gaps” in coverage. Common expenses covered by Medigap plans include deductibles, copayments, and coinsurance for hospital stays under Part A and doctor visits or outpatient services under Part B.
Medicare Supplement plans, regardless of the specific plan letter, do not cover prescription drugs. While these plans are designed to reduce out-of-pocket expenses for medical services, they do not provide benefits for medications obtained at a pharmacy.
Understanding Medicare Part D
Medicare Part D provides prescription drug coverage through private insurance companies that are approved by Medicare. Individuals typically enroll in a standalone Part D plan to obtain this benefit.
Part D plans involve various cost-sharing elements. Beneficiaries typically pay a monthly premium and an annual deductible before the plan begins to pay. After the deductible is met, copayments or coinsurance apply for covered prescriptions, varying by drug and its tier within the plan’s formulary. For 2025, once out-of-pocket costs for covered drugs reach $2,000, beneficiaries enter the catastrophic coverage phase where they pay nothing for covered Part D drugs for the remainder of the year.
Coordinating Medicare Supplement and Part D
It is common for individuals to have Original Medicare, a Medicare Supplement plan, and a separate Medicare Part D plan concurrently. The Medicare Supplement plan addresses medical costs not fully covered by Original Medicare, such as deductibles and coinsurance for doctor visits or hospital stays. The Part D plan exclusively covers prescription medications. These two types of plans serve different purposes and operate independently, ensuring comprehensive medical and drug coverage.
The distinction between this setup and Medicare Advantage (Part C) plans is important. Medicare Advantage plans bundle medical coverage (Parts A and B) and often include prescription drug coverage (Part D) and other benefits, all within a single plan from a private insurer. If an individual enrolls in a Medicare Advantage plan, they cannot also have a Medicare Supplement plan or a standalone Medicare Part D plan. Choosing a Medicare Advantage plan means receiving Medicare benefits through that private plan, which typically includes drug coverage. Enrolling in Part D when first eligible is important to avoid potential late enrollment penalties, which can increase the monthly premium for as long as one has Part D coverage.