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Does Medicare cover cancer treatment? It certainly does. The American Cancer Society reports that Medicare pays for nearly half of the $74 billion spent on cancer treatment each year.
It’s an important benefit and one that hits close to home for many people, right?
Over the last 15 years, our agency has helped hundreds of Medicare beneficiaries navigate their cancer benefits. Several local cancer hospitals and groups refer their turning 65 patients to us. Because of this, we have a great deal of experience in helping people set up their Medicare benefits to their best advantage.
I thought I’d share with you the best of what we’ve learned along the way.
While facing cancer can be overwhelming, rest assured that your Medicare benefits for cancer treatment are substantial. In fact, Medicare, paired with the right Medigap plan, can provide 100% coverage for many services. Learning which parts of Medicare cover certain services and how to access those services is the first step.
It also doesn’t matter if you have cancer before you age into Medicare. There are open enrollment windows that you can use so that your pre-existing conditions won’t affect you.
Here are some of the common medical services and treatments that Medicare covers.
What you pay depends on whether the particular medical service falls under Part A or Part B. For example, you can obtain chemotherapy on an inpatient or outpatient basis these days. Based on your choices when you enrolled in Medicare, most of you will access your benefits either from Original Medicare or a Medicare Advantage plan. Let’s review your potential cost-sharing on these two types of coverage.
Based on your choices when you enrolled in Medicare, most of you will access your benefits either from Original Medicare or a Medicare Advantage plan. Let’s review your potential cost-sharing on these two types of coverage.
Suppose you are enrolled in Original Medicare (often with a Medicare supplement plan, also known as Medigap). In that case, your benefits will come directly from Medicare Parts A, B, and D. You can see any doctor or provider that accepts Medicare. We’ll cover how people in a Medicare Advantage plan access benefits further below.
Medicare Part A will cover most cancer treatments you receive during an inpatient hospital stay. Part A has a deductible that you must satisfy before your benefits begin. In 2023, that deductible is $1,600.
Depending on the timing between hospital stays, it’s possible to owe this more than once throughout the year. Many Medigap plans can cover this deductible so that you won’t have to worry about it.
Part A also covers skilled nursing that you may receive after an inpatient hospital stay for cancer surgery. The first 20 days in a skilled nursing facility are covered in full by Medicare. If hospice benefits are needed, Medicare also provides care at any certified hospice facility.
Chemotherapy administered in a clinical setting is covered under Medicare Part B.
Medicare Part B will cover certain cancer screenings 100% under your preventive care benefits. Medicare Part B will also cover chemotherapy or radiation at your doctor’s office or stand-alone clinic.
After you pay the Part B deductible, Medicare covers 80% of the cost of this outpatient care.
You are responsible for the other 20%. Cancer treatments that fall under Part B will cost you 20% with no cap on your spending.
Here’s the deal, though:
Nearly all Medigap plans, such as Plan F, Plan G, and Plan N, will pay the 20% that Medicare doesn’t (only Plans K and L cover less). Several Medigap plans also cover your Part A and/or B deductibles. This makes Medigap one of the best Medicare plans for cancer patients.
Consider this example:
Judy is currently undergoing chemotherapy for breast cancer. This treatment will be covered 80% by Medicare Part B. If Judy has a Medicare supplement Plan F, her Plan F policy will pay her deductible and the other 20%.
Judy will owe nothing.
Also, if Judy has cancer before she ages into Medicare, she doesn’t have to worry about being turned down for coverage. She can use her 6-month Medicare Supplement Open Enrollment window to buy any Medigap with no health questions asked.
Some people opt for Medigap Plan G or N, which have lower premiums than Plan F. In return, you pay your own Part B deductible, and on Plan N, you also have some copays and possible excess charges. You can compare benefits between Medigap plans using our Medigap comparison chart.
Medicare Advantage plans cover the same Part A and B services as Original Medicare. However, how you access your benefits and what you pay for services will be different.
Here’s how they work:
Most plans have an HMO or PPO network of providers. You’ll seek care within the network to get the lowest copays. Sometimes the oncologist or hospital you wish to see may not be in the plan’s network.
With Medicare Advantage plans, you have cost-sharing or copays for treatment as you go along. Some cancer services under Medicare Advantage plans require up to 20% coinsurance from you. You pay a percentage of the cost of that treatment.
We see many plans where your cost-sharing for chemotherapy and radiation will be as much as 20%. You will pay this until you reach the plan’s Out-of-Pocket Maximum. That maximum can be as high as $8,300 per calendar year in the network in 2023 and even higher out-of-network.
Let’s check out an example:
Doug is undergoing radiation for prostate cancer. His Medicare Advantage plan requires him to pay a 20% coinsurance for his radiation treatments. While he is getting treatment, he also has twice-monthly appointments with his oncologist, at which he pays a $50 copay for a specialist visit.
He pays this 20% radiation cost and all of his doctors’ copays until he reaches $8,300 out of his own pocket. Then the plan covers 100%.
Bottom line?
If you plan to enroll in a Medicare Advantage plan, be sure that you have funds set aside for a rainy day. You could also consider purchasing a cancer policy to help pay for these items if you later develop cancer.
It has been my personal experience that people diagnosed with cancer, while covered by a Medicare Advantage plan, desperately want to return to a Medigap plan. However, their cancer diagnosis now prevents them from being able to get approved for a Medigap plan because they cannot pass the medical underwriting to get approved.
This is not to say that you can’t receive great care under a Medicare Advantage plan. It’s just that you may need to seek treatment with the qualified providers who participate in the plan’s network. You may also incur higher costs while undergoing treatment.
Be aware of this before you enroll in a Medicare Advantage plan.
Determining whether a cancer medication falls under Medicare Part B or D can be tricky.
Cancer medication that you receive in a doctor’s office or clinical setting will fall under Part B, which will pay 80% (if you have a Medigap plan, it will pay the other 20%. Or a Medicare Advantage plan, you will usually pay 20% up to the plan maximum).
These Part B drugs are often IV infusion chemotherapy drugs or anti-nausea medicines.
Sometimes your doctor will have a choice to give you medication by injection or in pill form. The American Cancer Society gives a helpful general rule about this. If the doctor has a choice between giving you a drug by mouth or by IV, then the oral drug should be covered under Part B.
However, your doctor must give you the medication within 48 hours of your cancer treatment. Otherwise, it will fall under Part D, which we will discuss below.
Why does that matter?
Well, if you have a Medigap plan, and Medicare pays 80%, and your Medigap plan pays 20% on a Part B drug, you owe nothing. Always verify with your doctor upfront so you will be prepared for whatever cost-sharing you will owe under Part B or D.
Choosing the right Part D plan is crucial during your cancer treatment.
Many people ask us if cancer drugs are covered by Medicare, and the answer is often yes.
Medications that cannot be administered by IV are usually covered by Part D. This includes medications you take orally or inject yourself.
Think of it like this:
Part D drugs are medications that you fill yourself at a local pharmacy.
Your copay for these medications is based on which tier they fall into on the plan’s drug formulary. Part D covers several generic cancer medications, such as Tamoxifen or Flutamide.
I ran a local Part D drug plan search for these two medications while writing this post. I saw copays as low as $2 for Flutamide and Tamoxifen on the first plan I reviewed.
However, many of the cancer drugs most frequently listed on Part D drug plan formularies are brand-name medications. This means that your copay or coinsurance for the drug can be quite expensive. For example, Tarceva is a newer medication that you would fill under Part D, and it can be costly due to the Part D Donut Hole. Depending on the type of cancer, there may various drugs that your doctor prescribes to prevent recurrences.
Although Part D is a voluntary program, it could potentially be devastating to fill medications as expensive as some of these without Part D. Several years ago, we had a client who had knowingly passed on enrolling in Part D coverage because she was healthy. She then developed cancer and got prescribed the brand-name Gleevec in September.
This part is crazy:
The medication cost her $5,600 a month for the next four months. Yup, she paid over $20,000 for that life-saving medication over the next four months.
Fortunately, this was just before the annual election period for Part D. We enrolled her in a plan to start in January, where her catastrophic coverage under Part D protected her from that kind of future spending.
All Part D plans include a catastrophic coverage limit which protects you from spending beyond a certain limit. In 2023, that limit is $7,400. Once you reach that limit, your Part D plan must cover 95% of your approved medication costs for the rest of the year.
This is why enrolling in Part D when you are first eligible is important. You are buying insurance against catastrophic spending on retail medications.
Let me add something else. Your insurance agent makes about $3 a month on a renewal drug plan. It’s not a money-maker for your agent, but it is extremely important coverage for you. I don’t advise skipping it.
Let’s recap. Does Medicare cover cancer treatment in the hospital? Yes.
Does Medicare cover cancer treatment on an outpatient basis, like chemotherapy? Yes.
Does Medicare cancer treatments that include oral medications? You betcha!
If you have Original Medicare, you can seek treatment for these services at any healthcare provider who accepts Medicare. If you are enrolled in a Medicare Advantage plan, you should obtain treatment within the plan’s network for the lowest out-of-pocket. Consult the plan’s online provider directory to make sure you are treating in the network.
You may want to consider this when you are setting up your coverage. If you were to be diagnosed with breast, liver, or ovarian cancer next year, what type of insurance would give you the most peace of mind?
Cancer patients often face losing their hair as a result of chemotherapy. It can cause additional emotional and mental strain during a time when you are already dealing with a very physical illness.
When it comes to what Medicare will cover, the question always surrounds the medical necessity of the treatment or item. Unfortunately, Original Medicare does not deem wigs for cancer patients to be medically necessary. If you are enrolled in a Medicare Advantage plan instead of Original Medicare, check with your plan to see if they include any benefits for wigs under prosthetic coverage.
Yes, if your doctor feels immunotherapy is medically necessary for your treatment, Medicare may cover this.
Medicare does not cover long-term care if it is needed during or after cancer treatment. Medicare only covers short-term care for up to 100 days. Medicare also does not cover lodging for you and your family if it is necessary for you to travel for your cancer treatment.
