Does Medicare A and B Cover Prescriptions?

Medicare serves as the federal health insurance program for individuals aged 65 or older, as well as certain younger people with disabilities. This program is structured into different “parts,” each covering distinct aspects of healthcare services. A common question among beneficiaries is whether Medicare Parts A and B provide coverage for prescription medications. This article clarifies the extent to which Medicare Parts A and B cover prescription drugs and explains where most prescription drug coverage is obtained within the Medicare system.

Medicare Part A and Part B Coverage

Medicare Part A, known as Hospital Insurance, covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health services. Part A covers prescription drugs only when administered during a covered inpatient hospital stay or as part of hospice care. For example, if a patient receives intravenous antibiotics during a hospital admission, these medications are covered under Part A. However, Part A does not cover self-administered outpatient prescription drugs picked up from a pharmacy.

Medicare Part B, or Medical Insurance, covers medically necessary services like doctor visits, outpatient care, durable medical equipment, and certain preventive services. Part B generally does not cover most outpatient prescription drugs purchased at a retail pharmacy. Limited exceptions exist where Part B covers certain medications. These exceptions include drugs administered by a healthcare professional in a clinic or hospital outpatient setting.

Examples of drugs covered under Part B include certain injectable or infused medications, such as some chemotherapy drugs, injections given in a doctor’s office, or drugs used with durable medical equipment like nebulizers. Vaccinations, such as flu shots, pneumococcal shots, and Hepatitis B shots for certain individuals, are also covered by Part B. Additionally, some oral medications, like certain oral anti-cancer drugs or anti-nausea drugs used with chemotherapy, may be covered.

Medicare Part D Prescription Drug Coverage

Medicare Part D provides optional prescription drug coverage through private insurance companies approved by Medicare. These plans use a formulary, a list of covered drugs, and categorize them into different cost-sharing tiers. Beneficiaries pay premiums, deductibles, copayments, or coinsurance based on their chosen plan and the drugs they use.

Part D plans operate through coverage stages. The first stage is the deductible period, where beneficiaries pay 100% of their prescription drug costs until a set deductible is met. For 2025, the standard deductible for Part D plans cannot exceed $590. After the deductible is satisfied, beneficiaries enter the initial coverage stage.

In the initial coverage stage, the Part D plan pays a portion of the drug costs, and the beneficiary pays a copayment or coinsurance. For 2025, once a beneficiary’s out-of-pocket costs, including the deductible, reach $2,000, they transition into the catastrophic coverage phase. This change eliminates the former “coverage gap” or “donut hole” phase and simplifies the benefit structure.

Upon reaching the catastrophic coverage phase in 2025, beneficiaries will have no further cost-sharing for covered medications for the remainder of the calendar year. If individuals do not enroll in Part D when first eligible and lack other creditable drug coverage, they may incur a late enrollment penalty added to their monthly premium.

Medicare Advantage and Drug Coverage

Medicare Advantage (Part C) offers an alternative way to receive Medicare benefits. These plans are provided by private companies approved by Medicare and often bundle Part A (Hospital Insurance) and Part B (Medical Insurance) coverage. Many Medicare Advantage Prescription Drug Plans (MA-PDs) also include prescription drug coverage, removing the need for a separate Part D plan.

Medicare Advantage plans often offer additional benefits not covered by Original Medicare, such as vision, dental, and hearing services. If a beneficiary enrolls in an MA-PD plan, their prescription drug coverage is integrated within that plan. The specific rules for drug coverage, including network pharmacies and formularies, are determined by the individual plan.

Different types of Medicare Advantage plans exist, such as Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs). These plan structures influence how beneficiaries access their prescription drugs and associated costs.

Understanding Enrollment and Costs for Drug Coverage

Enrollment in Medicare prescription drug coverage occurs during specific periods. The Initial Enrollment Period (IEP) is a seven-month window around an individual’s 65th birthday. For those who did not enroll during their IEP, the Annual Enrollment Period (AEP), from October 15 to December 7 each year, allows individuals to join, switch, or drop Part D or Medicare Advantage plans. Special Enrollment Periods (SEPs) may also be available for specific life events.

Costs associated with Medicare prescription drug coverage include monthly premiums, which vary by plan and income. Beneficiaries also pay an annual deductible, as well as copayments or coinsurance for each prescription filled.

For individuals with limited income and resources, financial assistance is available through the Extra Help program (Low-Income Subsidy or LIS). This federal program helps pay for Part D premiums, deductibles, and copayments. In 2025, those who qualify for Extra Help may pay no more than $4.90 for covered generic drugs and $12.15 for covered brand-name drugs. Medicare.gov provides tools to compare plans and assist beneficiaries in selecting suitable coverage options.