How Much Does Medicare Pay for Cancer Treatment?

Medicare is a federal health insurance program primarily for individuals aged 65 or older, though it also extends to certain younger people with disabilities. While Medicare covers a wide range of cancer treatments, the extent of this coverage varies based on the specific Medicare plan. Understanding how Medicare works is important for those navigating cancer care.

Medicare Coverage for Cancer Treatment Services

Medicare Part A, known as Hospital Insurance, covers inpatient care, skilled nursing facility care, hospice care, and some home health services. For cancer patients, Part A helps cover inpatient hospital stays for surgeries, chemotherapy during inpatient admission, or hospice care.

Medicare Part B, or Medical Insurance, covers outpatient services, including doctor’s services, medical supplies, and preventive services. Part B covers chemotherapy infusions, radiation therapy, diagnostic tests like scans and laboratory work, doctor visits with oncologists and surgeons, durable medical equipment, and certain prescription drugs administered in a clinic or hospital outpatient setting.

Medicare Part D provides prescription drug coverage for most outpatient prescription drugs, including oral chemotherapy and supportive medications taken at home. Part D coverage is distinct from Part B, which covers drugs administered in a medical facility.

Medicare Part C, also known as Medicare Advantage, offers an alternative to Original Medicare (Parts A and B). These plans are provided by private insurance companies approved by Medicare and must cover at least all services Original Medicare covers. While Medicare Advantage plans cover cancer treatment, they may have different cost-sharing structures, provider networks, and referral rules compared to Original Medicare. Many Medicare Advantage plans also include prescription drug coverage (Part D) and may offer additional benefits.

Patient Cost-Sharing Under Medicare

Under Original Medicare, beneficiaries have financial responsibilities. For Medicare Part A, a deductible applies for each benefit period. In 2025, this deductible is $1,676 per benefit period for inpatient hospital stays. If a hospital stay extends beyond 60 days, a daily coinsurance applies: $419 per day for days 61-90, and $838 per day for days 91-150 (using lifetime reserve days). Skilled nursing facility care also has a coinsurance of $209.50 per day for days 21-100 in 2025.

For Medicare Part B services, beneficiaries pay an annual deductible of $257 in 2025. After meeting this, patients typically pay 20% coinsurance for most Medicare-approved services, including outpatient chemotherapy, radiation therapy, and doctor visits. Original Medicare Part B has no annual out-of-pocket limit, meaning the 20% coinsurance can accumulate indefinitely for high-cost treatments.

Medicare Part D costs include a deductible, copayments, and coinsurance for prescription drugs. The standard Part D deductible in 2025 is $590, though some plans may have a lower or zero deductible. After meeting the deductible, beneficiaries pay a portion of the drug cost, typically 25%, through copayments or coinsurance. For 2025, the coverage gap, often called the “donut hole,” is eliminated. A new annual cap on out-of-pocket spending for Part D drugs is $2,000 for 2025. Once this limit is reached, beneficiaries pay nothing for covered medications for the remainder of the calendar year.

Strategies for Managing Cancer Treatment Costs

To manage cancer treatment costs under Medicare, beneficiaries can explore supplementary options and assistance programs. Medicare Supplement Insurance (Medigap) helps cover “gaps” in Original Medicare coverage. These private policies pay for out-of-pocket costs like deductibles, coinsurance, and copayments that Original Medicare does not cover, including the 20% Part B coinsurance. Different Medigap plans offer varying levels of coverage, with some covering nearly all out-of-pocket costs, providing predictability.

Medicare Advantage Plans (Part C) offer another cost management strategy. While these plans replace Original Medicare, they often feature different cost-sharing structures, including copayments and coinsurance for services. A key advantage for high-cost treatments like cancer is their annual out-of-pocket maximum. In 2025, the in-network limit for Medicare Advantage plans may not exceed $9,350, after which the plan pays 100% of covered services. This provides a ceiling on a patient’s annual financial exposure, though specific costs and provider networks vary by plan.

Several government assistance programs provide financial relief for low-income Medicare beneficiaries. Medicaid is a joint federal and state program that helps cover Medicare premiums, deductibles, and copayments for eligible individuals with limited income and resources. This program can significantly reduce out-of-pocket costs for cancer treatment.

Medicare Savings Programs (MSPs) are state-run programs that help individuals with low incomes and limited assets pay for some Medicare costs. MSPs can assist with Part A and/or Part B premiums, deductibles, and coinsurance. Eligibility is based on income and resource limits, typically higher than for full Medicaid benefits.

The Extra Help program (Low-Income Subsidy or LIS) assists with Medicare Part D prescription drug costs. This program helps eligible beneficiaries pay for Part D premiums, deductibles, and copayments for covered medications. Extra Help is beneficial for cancer patients needing expensive oral chemotherapy drugs or other high-cost prescriptions.

Other financial assistance avenues exist beyond government programs. Pharmaceutical companies often offer patient assistance programs to help cover medication costs, especially for high-cost drugs. Many non-profit organizations provide financial aid or resources for cancer patients to help with treatment-related expenses. Hospital financial aid programs can also offer assistance based on a patient’s income and financial need, potentially reducing hospital bills.