Medicare covers many cancer drugs, but not all of them, and the coverage depends on which part of Medicare you have and how the drug is given

If you have cancer and Medicare, your coverage for drugs falls into three categories: drugs you take at home (covered under Part D), drugs given in a hospital or outpatient clinic (covered under Part B), and drugs given during a hospital stay (covered under Part A). The same drug can be covered differently depending on where you receive it. Chemotherapy pills you swallow at home are Part D. The same chemotherapy given by IV in a clinic is Part B. This matters because your out-of-pocket costs are different for each.

Medicare does not cover every cancer drug on the market. The Food and Drug Administration (FDA) must have approved the drug, and Medicare's Centers for Medicare & Medicaid Services (CMS) must have decided to cover it. Some newer drugs, especially those approved very recently, may not yet be on Medicare's coverage list. Your oncologist's office can tell you whether a specific drug is covered before you start treatment.

Key Takeaways

  • Cancer drugs given by IV in a clinic or hospital are covered under Medicare Part B with a 20 percent coinsurance after you meet your deductible.
  • Cancer pills you take at home are covered under Part D (prescription drug coverage), and your costs depend on which plan you chose and which tier the drug is on.
  • Some cancer drugs are not yet on Medicare's coverage list, especially very new ones, so ask your oncologist to check before starting treatment.
  • If Medicare denies coverage for a drug your doctor prescribed, you have the right to request a review and provide medical reasons why you need it.
  • Clinical trials for cancer treatment may cover all costs, including drugs not yet approved by Medicare, so ask your oncologist whether a trial is an option.

How Medicare Part B covers cancer drugs given in a clinic or hospital

When you receive chemotherapy, immunotherapy, or other cancer drugs by IV or injection in an outpatient clinic or hospital, Medicare Part B covers the drug itself. You pay 20 percent of the Medicare-approved amount after you have met your Part B deductible (which is $240 in 2024, though this amount changes yearly). The clinic or hospital bills Medicare directly, and you receive a bill for your share.

Part B also covers certain oral chemotherapy drugs if they are considered the same as or a substitute for an IV drug. Your oncologist's office handles the paperwork to show Medicare that the oral drug is medically necessary. If the drug is covered, you still pay 20 percent coinsurance, not the Part D copay you would pay for other prescription drugs at a pharmacy.

If you have a Medigap or Medicare Advantage plan, your coinsurance may be lower or covered entirely. Check your plan documents or call your plan to find out what you will owe for a specific drug before treatment starts.

How Medicare Part D covers cancer pills you take at home

Cancer drugs you swallow at home — such as tyrosine kinase inhibitors, hormone therapies, or targeted therapies — are covered under Part D, the prescription drug benefit. Part D is optional, and you choose a plan during the annual enrollment period (October 15 to December 7 each year). If you did not choose a plan when you first became may be able to access for Medicare, you may face a late enrollment penalty.

Each Part D plan has a formulary, which is a list of drugs it covers. Not all plans cover all cancer drugs, and the tier (or cost level) of a drug varies by plan. A drug on tier 3 in one plan might be tier 4 in another, meaning your copay or coinsurance is different. Before you start a new cancer drug, ask your oncologist's office to check your specific plan's formulary or call your plan directly.

Part D has a coverage gap (sometimes called the "donut hole"), which means your costs increase after you and your plan have spent a certain amount on drugs in a calendar year. For 2024, the gap begins after $5,850 in total drug costs. Once you reach that point, you pay a higher percentage until you hit the catastrophic coverage threshold. Cancer drugs are often expensive, so you may reach the gap quickly. Some plans offer extra help during the gap, so ask your plan what happens to your copays once you enter it.

What to do if a cancer drug is not on Medicare's coverage list

If your oncologist prescribes a drug that Medicare does not cover, you have several options. First, ask your doctor whether there is a similar drug that Medicare does cover. Many cancer types have multiple treatment options, and switching to a covered drug may be possible without affecting your care.

Second, you can request a coverage information from Medicare or your Part D plan. This is a formal request asking Medicare to review whether the drug should be covered in your specific case. Your oncologist must provide medical documentation explaining why this particular drug is medically necessary for you. The review process takes about 72 hours for urgent requests and up to 30 days for standard requests. If Medicare says no, you have the right to appeal.

Third, ask your oncologist whether you are a candidate for a clinical trial. Trials often cover all treatment costs, including drugs not yet approved by Medicare. The National Cancer Institute maintains a searchable database of trials at cancer.gov.

Costs you will owe for cancer drugs under Medicare

Your out-of-pocket costs depend on which part of Medicare is paying and which plan you have chosen. For Part B drugs given in a clinic, you owe 20 percent coinsurance after your deductible. For Part D drugs you take at home, you owe a copay or coinsurance that varies by plan and by the tier of the drug. Some plans charge a flat copay (for example, $15 per month), while others charge coinsurance (a percentage of the drug's cost).

Cancer drugs are often among the most expensive medications. A single month of some targeted therapies or immunotherapies can cost $10,000 or more before insurance. Even with Medicare, your share can be substantial. If cost is a barrier, ask your oncologist's office about patient information programs run by the drug manufacturer. Many manufacturers offer the drug free or at reduced cost to people who cannot afford it, regardless of insurance status.

You can also ask your oncologist's office to help you understand your costs before treatment starts. They can tell you the drug's price, your plan's copay or coinsurance, and whether you will hit the Part D coverage gap. Some offices have financial counselors who work with patients on cost issues.

How to check whether a specific cancer drug is covered

The fastest way to find out is to call your Part D plan directly. Have your plan name and member ID ready, and ask whether a specific drug is covered and what tier it is on. You can find your plan's phone number on your Medicare card or at Medicare.gov.

You can also visit Medicare.gov and use the Plan Finder tool. Enter your zip code, and the tool will show you all Part D plans available in your area. Click on a plan, and you can search for a specific drug to see whether it is covered and what your copay would be.

Your oncologist's office can also check for you. Many offices have staff who specialize in insurance and can look up coverage in your specific plan. This is often faster than doing it yourself, and the office can also check whether prior authorization is required (a step where your doctor must get approval from your plan before you start the drug).

Prior authorization and other coverage requirements

Some cancer drugs require prior authorization, which means your oncologist must contact your insurance plan and get approval before you start the drug. This is not a denial — it is a step to confirm that the drug is medically necessary and that you meet the plan's criteria. Prior authorization can add a few days to the process, so your oncologist's office usually starts this as soon as the drug is prescribed.

Some plans also require step therapy, which means you must try a cheaper drug first before the plan will cover a more expensive one. If step therapy applies to your drug, your oncologist can request an exception if the cheaper drug is not appropriate for your specific cancer or medical history.

If your plan denies prior authorization or step therapy, you have the right to appeal. Your oncologist can provide medical evidence to support the appeal. Appeals usually take 72 hours for urgent requests.

Frequently Asked Questions

Does Medicare cover cancer drugs that are still in clinical trials?

Medicare does not cover drugs that have not been FDA-approved. However, if you are enrolled in a clinical trial, the trial itself usually covers all costs of the experimental drug and related care. Ask your oncologist whether you are a candidate for a trial and what costs the trial covers.

What happens to my cancer drug coverage if I switch from Original Medicare to a Medicare Advantage plan?

Medicare Advantage plans include drug coverage (Part D) as part of the plan, so you do not choose a separate Part D plan. However, the drug formulary in a Medicare Advantage plan may be different from the one in a standalone Part D plan. Before you switch, check whether your current cancer drugs are covered in the new plan and what your costs will be.

Can I get a refund if I paid for a cancer drug before I knew Medicare would not cover it?

Medicare will not refund you retroactively. However, if you paid out of pocket and then Medicare approves coverage after an appeal, you may be able to submit a claim for reimbursement. Ask your oncologist's office or your plan's customer service whether this is possible in your situation.

Do I have to pay the Part D coverage gap costs for cancer drugs, or does Medicare help?

Once you enter the coverage gap, you pay a higher percentage of the drug's cost. However, if you have a low income, you may be may be able to access for Extra Help (also called the Low-Income Subsidy), which covers most or all of your costs during the gap. You can check whether you may have access to at Medicare.gov or by calling 1-800-MEDICARE.

What if my oncologist prescribes a brand-name cancer drug but my plan only covers the generic version?

Ask your oncologist whether the generic version is medically appropriate for your cancer. If it is, switching to the generic will lower your costs. If your doctor believes the brand-name drug is necessary, they can request a formulary exception, which asks the plan to cover the brand-name drug instead. The plan will review the request and usually respond within 72 hours.