Does Medicare Cover Chemotherapy and Its Costs?

Medicare, a federal health insurance program, provides healthcare coverage for millions of Americans, primarily those aged 65 or older and certain younger individuals with disabilities. Understanding Medicare’s coverage for chemotherapy is important, as this complex medical intervention is a cornerstone of cancer treatment. This article will detail how Medicare addresses chemotherapy through its different parts, helping individuals manage the financial aspects of their care.

Coverage Under Original Medicare

Original Medicare, comprising Part A (Hospital Insurance) and Part B (Medical Insurance), forms the foundation of coverage for chemotherapy treatments. These parts address different settings and types of services, with a crucial distinction between inpatient and outpatient care.

Medicare Part A primarily covers chemotherapy administered during an inpatient hospital stay. This includes the chemotherapy drugs, hospital services like a semi-private room, meals, nursing care, and related medical supplies. Part A benefits apply if a patient requires admission to a hospital for chemotherapy administration or management of side effects. Part A also covers inpatient rehabilitation or skilled nursing facility care if it follows an eligible hospital stay and is necessary for recovery from chemotherapy or related conditions. Part A does not cover custodial or long-term care needs.

Medicare Part B is the primary component covering outpatient chemotherapy services, which represents the majority of treatments today. This includes intravenous (IV) chemotherapy administered in a doctor’s office, a freestanding clinic, or an outpatient hospital department. Part B also covers the administration services, such as infusion provided by medical professionals.

Part B covers associated medical services like doctor’s visits for diagnosis, treatment planning, and follow-up care related to chemotherapy. Necessary lab tests, imaging scans (X-rays, CT scans, MRIs), and radiation therapy prescribed as part of a cancer treatment plan are also covered. Chemotherapy administered via a durable medical equipment (DME) pump, such as an infusion pump worn at home, falls under Part B. While most oral chemotherapy drugs are covered under Part D, Part B may cover specific oral anti-cancer drugs if they are the same drugs that would be given intravenously and cannot be self-administered.

Coverage for Prescription Chemotherapy Drugs

While Part B covers many chemotherapy treatments administered by medical professionals, coverage for self-administered prescription drugs, especially oral chemotherapy, typically falls under Medicare Part D. Part D is Medicare’s prescription drug benefit, offered through private insurance companies approved by Medicare. These plans help cover the costs of prescription medications, including many oral chemotherapy drugs that patients take at home.

Medicare Part D plans operate with formularies, which are lists of covered drugs. The specific drugs covered and their cost-sharing amounts can vary significantly between different Part D plans. Most oral chemotherapy drugs, along with other medications often needed during cancer treatment like anti-nausea drugs, pain medication, or antibiotics, are included in these formularies.

Part B may cover an oral chemotherapy drug only if it is the same drug that could be administered intravenously and cannot be self-administered by the patient. However, the vast majority of oral chemotherapy medications that patients take themselves, and which are typically filled at a pharmacy, are covered exclusively under a Medicare Part D plan. Patients usually obtain Part D coverage either through a stand-alone Prescription Drug Plan (PDP) or as part of a Medicare Advantage Plan (Part C) that includes drug coverage.

Understanding Costs and Supplemental Coverage

Even with Medicare coverage, individuals receiving chemotherapy can incur significant out-of-pocket costs, including deductibles, coinsurance, and copayments. Understanding these financial responsibilities is important for managing cancer treatment expenses. These costs vary depending on the type of Medicare coverage and whether supplemental insurance is in place.

For Medicare Part A, the inpatient hospital deductible is $1,676 per benefit period in 2025. If an inpatient stay for chemotherapy extends beyond 60 days, a daily coinsurance applies: $419 per day for days 61 through 90, and $838 per day for lifetime reserve days from day 91 onward. These costs can accumulate quickly, particularly for lengthy hospitalizations.

Under Medicare Part B, beneficiaries pay an annual deductible of $257 in 2025. After meeting this deductible, Medicare generally pays 80% of the Medicare-approved amount for most outpatient chemotherapy services, doctor’s visits, and covered durable medical equipment. The patient is responsible for the remaining 20% coinsurance, and there is no annual limit on this out-of-pocket spending with Original Medicare.

Medicare Part D plans also have associated costs, including monthly premiums, which average around $45 for stand-alone plans in 2025. Many plans have a deductible, which can be up to $590 in 2025, before coverage begins. After the deductible, patients typically pay copayments or coinsurance for their prescription drugs. A significant change for 2025 is the introduction of a $2,000 annual out-of-pocket cap for covered prescription drugs, after which the plan covers 100% of costs.

To help manage these out-of-pocket expenses, many individuals consider supplemental coverage options. Medicare Advantage Plans (Part C) are offered by private companies approved by Medicare and provide an alternative to Original Medicare. These plans must cover at least the same benefits as Medicare Parts A and B, and most include Part D prescription drug coverage. Medicare Advantage plans typically have their own network rules, deductibles, copayments, and an annual out-of-pocket maximum, which can offer a more predictable cost structure than Original Medicare.

Medigap (Medicare Supplement Insurance) plans are designed to pay some of the remaining healthcare costs that Original Medicare does not cover, such as Part A and Part B deductibles, coinsurance, and copayments. These plans are purchased from private companies and work alongside Original Medicare. Medigap plans do not cover prescription drugs, so individuals with Medigap would still need a separate Part D plan for medication coverage.