How Does Medicare Pay for Chemotherapy?

Medicare, the federal health insurance program for individuals aged 65 or older and certain disabled individuals, covers chemotherapy costs. Coverage depends on where the treatment is administered and the type of medication. Beneficiaries are responsible for out-of-pocket costs.

Chemotherapy Coverage Under Medicare Part A and Part B

Chemotherapy coverage depends on where treatment occurs. Part A, Hospital Insurance, covers chemotherapy received during an inpatient hospital stay. This includes the hospital room, nursing care, and drugs administered during the stay. Part A also extends to limited stays in skilled nursing facilities following a qualifying hospital admission.

Part B, Medical Insurance, covers chemotherapy administered in outpatient settings like a doctor’s office, freestanding clinic, or hospital outpatient department. It covers intravenous (IV) chemotherapy, injections, and some oral chemotherapy medications administered by a medical professional.

Part B also covers related services for chemotherapy, including doctor’s visits, diagnostic tests like blood work and imaging, and durable medical equipment.

Prescription Drug Coverage for Chemotherapy

Medicare Part D covers chemotherapy medications. It covers self-administered oral chemotherapy medications taken at home, and medications to manage chemotherapy side effects like anti-nausea drugs and pain relief.

Injectable or intravenous chemotherapy administered in a clinical setting falls under Medicare Part B, not Part D. Part D plans have a formulary (list of covered drugs), and beneficiaries should check it for specific oral chemotherapy drugs.

Part D coverage involves stages that impact out-of-pocket costs for high-cost chemotherapy drugs. These include a deductible, initial coverage, and catastrophic coverage periods. As of 2025, the “donut hole” (coverage gap) has been eliminated.

Understanding Your Out-of-Pocket Costs

Financial responsibilities for chemotherapy under Medicare include deductibles, coinsurance, and copayments. For Medicare Part A, the inpatient hospital deductible for 2025 is $1,676 per benefit period. If a hospital stay extends beyond 60 days in a benefit period, a daily coinsurance of $419 applies for days 61-90, increasing to $838 per day for lifetime reserve days.

For Medicare Part B, beneficiaries pay an annual deductible and coinsurance. The 2025 Part B annual deductible is $257. After meeting this deductible, Medicare covers 80% of the approved amount, with beneficiaries paying the remaining 20% coinsurance. Original Medicare (Parts A and B) has no out-of-pocket maximum, so coinsurance costs can accumulate.

Medicare Part D costs for oral chemotherapy medications include a deductible, copayments, or coinsurance. The standard Part D deductible for 2025 is $590, though some plans may have a lower or zero deductible. After meeting the deductible, during the initial coverage period, beneficiaries pay 25% of drug costs until out-of-pocket spending reaches $2,000 for 2025. After this, beneficiaries enter catastrophic coverage and pay nothing for covered Part D drugs for the rest of the year.

Medigap, or Medicare Supplement Insurance plans, can cover some Original Medicare (Parts A and B) out-of-pocket costs, such as deductibles and coinsurance. They pay costs Original Medicare does not. Medicare Advantage (Part C) plans cover at least what Original Medicare covers. These plans have their own cost-sharing structures, including copayments, deductibles, and an out-of-pocket maximum, which can differ from Original Medicare. The maximum out-of-pocket limit for Medicare Advantage plans in 2025 is $9,350 for in-network costs.