Does Medicare cover prescription drugs?

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The good news is that when you’re eligible to enroll in Medicare, you’ll also be able to purchase insurance that pays for some of your prescription drug costs — in many cases, most of the costs. But there are many caveats about Medicare drug coverage and significant variations in coverage and costs between plans.

The original health insurance (parts A and B) does not cover prescription drugs, except in specific cases (medicines administered during surgery, for example). Beneficiaries of original Medicare can purchase prescription drug coverage, called Medicare Part D, which is sold and administered by private insurers.

Most Medicare Advantage plans, on the other hand, include prescription drug coverage.

In both cases, Medicare Part D and Medicare Advantage, it is important to remember that the specific drugs covered vary from plan to plan. The same goes for monthly premiums and other fees. So it pays to educate yourself, shop carefully, and re-evaluate your diet choice every year.

What Medicare Part D plans cover

Medicare drug plans cover both generic drugs and brand name drugs. All plans cover certain classes of drugs to treat specific conditions. Each plan decides which specific drugs to insure by category.

Each Medicare Part D plan lists the drugs it covers in a formulary, which typically includes both brand name drugs and generic drugs. Formularies change, so it is very important to regularly check that your medications are included.

You should also check each plan for restrictions on drug coverage, such as requirements that certain drugs be approved in advance by the insurer.

If you or your provider believe that none of the covered drugs will adequately treat your condition, you can request an exception.

What you will pay for prescriptions

In addition to Part D premiums, you may be responsible for cost sharing, which may include deductibles, copayments, or coinsurance. Medicare Part D plans set their own premiums.

Part D plan deductibles range from $0 to the maximum allowed, which in 2021 is $445 (rising to $480 in 2022). High-income earners will pay an additional monthly fee of $12.30 to $77.10 for Part D in 2021.

Co-payments or coinsurance

Almost all Medicare Part D and Medicare Advantage plans with prescription drug coverage charge copayments or coinsurance. Buy with care; your costs will vary from plan to plan.

Part D coverage requires you to pay varying prices for different classes of drugs. In general, your copayment will be higher for brand name drugs.

Note that if you delay registering for Part D too long, you will incur a late registration penalty.

How to Compare Medicare Part D Plans

Medicare.gov can help you find a Part D plan that covers your prescriptions and can help you compare your costs across various Medicare Part D and Medicare Advantage plans.

More from NerdWallet

John Rossheim writes for NerdWallet. Email: USexpansion@nerdwallet.com.

The article Does Medicare Cover Prescription Drugs? originally appeared on NerdWallet.

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