If you are transitioning onto Medicare and are undergoing or anticipating cancer treatments, you need to know -- in what ways will Medicare cover cancer treatments, such as chemotherapy and radiation?
Does Medicare Cover Cancer? What You Need to Know
There are a lot of decisions facing those who are facing cancer and are going onto Medicare. You have many choices for insurance coverage, including Part D drug plans. SoKnowing how can help with your decision.
Most prescription drugs are covered under the Part D prescription drug plan. This generally covers many common prescriptions that treat various medical problems such as high cholesterol, high blood pressure, arthritis, thyroid conditions, and other health conditions. The general rule is that Part D will cover the types of medicines that you get at your local pharmacy.
How Medicare Part A and Part B Covers Cancer Treatments
First of all, let me get Part A out of the way. Part A covers your inpatient portion of cancer treatments. As was the case when oldest son was 11 and was going through chemo treatments, we had to have a hospital stay about every three to four weeks to receive chemo. This was because one of the chemotherapy drugs he was taking -- Cyclophosphamide -- would burn his bladder if it stayed on the bladder too long. So they had to keep the IV fluids pumping through his little body to dilute it and keep it from damaging the bladder. The weeks that he did not have to stay in the hospital, he received the chemotherapy treatments in the pediatric oncology clinic.
If he had been on Medicare, his inpatient stays would have been covered under Medicare Part A. But the visits to the clinic for chemo would have been considered an outpatient visit. That is what I want to cover here. The out of pocket expenses can balloon if you don’t have the right coverage.
Under Part B of Medicare, there is an annual Part B deductible ($198 in 2020) that is payable once a year. After that, Medicare pays 80% of Part B expenses. The remaining 20% is left up to you to pay. You can pay that out of pocket or get insurance coverage that will pay it for you.
Medicare Only -- With No Additional Health Insurance
If you only have Medicare Part A and Part B with no additional insurance, you would have to pay the Part B deductible before Medicare kicks in. After the deductible is met, the 20% co-payment that Medicare does not cover is your responsibility.
This is the most important thing to remember about having no supplemental coverage -- there is NO LIMIT to the amount that you are required to pay. If your outpatient care costs $100,000 in a year, you pay 20% of that. If it reaches $300,000 in a year, you are looking at being on the hook for $60,000!
Think it could not possibly reach that amount? Not so fast. As we will get into in a moment, most chemotherapy drugs administered in a doctor’s office or clinic are going to fall under Part B. I know we had one drug that my son took that cost $10,000 per treatment.
In 14 months of treatment, we had a total bill of around $750,000. The vast majority of those charges was from chemo drugs administered at the oncology clinic. If we had not had good insurance or had been on Medicare Part B with no insurance, our portion of that bill would have been $150,000-200,000!
Medicare with a Part C Medicare Advantage Plan
Things are a little better with a Medicare Advantage rather than having no insurance coverage at all in addition to Medicare. On almost every Medicare Advantage plan -- as I point out in the video above -- you will still have to pay that 20% out of your pocket for all outpatient services. The good news compared to having Medicare alone is that there is a cap on how much you will pay out of pocket.
For in-network outpatient services, the maximum out of pocket you will have to pay for any particular plan is $6,700. That is the limit that is set by Medicare for 2020 for in-network coverage. Out of network can be much higher. One thing to note is that the annual out of pocket maximum resets every year. As I talked about in the video above, we have had people that have paid that maximum amount 3-4 years in a row because of ongoing treatments.
Medicare With a Medigap Plan
Medigap is your best option if you are undergoing cancer treatments or have other health issues when you are first eligible for Medicare. It is very hard to switch to one of these plans once a diagnosis is in. This is because there is underwriting involved in getting Medigap coverage.
There are three ways that you can avoid underwriting when enrolling in a Medigap plan:
- You are enrolling during your Open Enrollment period surrounding your initial enrollment into Part B of Medicare
- You are already on Part B but are turning 65
- You are eligible for a guaranteed issue status because of losing employer coverage after age 65
Why Medigap is the Best Option for Medicare Cancer Coverage
You don’t pay the Part B co-insurance amount of 20% -- your Medigap plan pays it for you. If you have the most popular plan -- Plan F -- you will pay nothing out of pocket for outpatient services under Part B. Whatever is left over after Medicare pays is covered 100% by the Plan F.
The Plan G -- which is a better value than Plan F because of the additional savings -- will pay 100% of the Part B co-payment once you pay that annual Part B deductible. Again, that deductible is $198 for 2020.
Remember where I mentioned above that there is no cap on Part B 20% amount you could be charged? The good news is that there is also no cap on how much the Medigap plans will pay on the Part B 20% co-insurance. So your Part B charges are fully covered after the deductible is met on most plans.
Every Medigap Plan A through N will cover all of that 20% co-payment with the exception of Plan K which pays 50% of it, and Plan L which pays 75% of it -- both with a limit on out of pocket expenses. Plan F and Plan C are the only plans that cover the Part B annual deductible. On all the other plans, you would be responsible for that deductible.
Does Medicare Cover Cancer Drugs?
Many Cancer Drugs Fall Under Part B of Medicare
Medicare Part B covers doctor visits and outpatient hospital services. Part B also covers the drugs that are infused (given in a vein through an IV) or injected (given as a shot) in a doctor’s office or treatment center. Many chemotherapy drugs and the anti-nausea drugs used along with chemo are given by IV infusion in a doctor’s office or clinic. This means they are still covered under Part B.
The difference in coverage for cancer drugs under Medicare Part B and Medicare Part D is blurred. When it comes to chemo and anti-nausea drugs given by mouth (these are often called oral drugs), some of these drugs are covered under Part B, but others are covered under Part D.
Cancer treatment drugs taken by mouth
Some cancer drugs are taken by mouth as part of chemotherapy treatment. For the most part, these drugs are covered under Part B if they are used instead of the same drug that could be given through an IV in your doctor’s office. In other words, if your doctor has a choice between giving you drug by mouth or the same drug as an IV, the oral drug is covered under Part B.
In contrast, oral cancer drugs that cannot be given by IV are covered under Part D. This one key component determines whether Medicare will cover cancer treatments under Part B or Part D.
Anti-nausea drugs taken orally
As cancer patients know, anti-nausea medications are a key component of cancer treatment. The rule for how Medicare covers cancer-related anti-nausea drugs taken by mouth is much the same. Oral drugs are covered under Part B if your doctor has a choice between giving you an anti-nausea drug by mouth or through an IV and the drug is given within 48 hours of chemo.
Oral anti-nausea drugs that cannot be given through an IV are covered under Part D, not Part B. This rule does not apply to anti-nausea medications given to non-cancer patients. Those will normally fall under Part D.
Sorting out Medicare Part B and Part D
Many people find the rules for the difference between Medicare coverage under Part B and Part D hard to understand. The rules can be even more confusing for people with cancer wondering -- will Medicare cover cancer drugs? This is because some cancer drugs are already covered under Part B.
As a general rule, drugs that patients can inject on their own without help from a doctor or nurse are covered under Part D. Drugs that are not taken as part of chemo are also covered under Part D.
If you have more questions, check with your physician to help sort through the coverage rules. They can help you figure out whether a drug is covered under Medicare Part B or Medicare Part D.
Why do I need to know if a drug is covered under Part B or Part D?
It’s important to understand the difference between drug coverage under Part B and coverage under Part D. Your out-of-pocket costs will vary depending on which part of Medicare covers each drug.
Patients must first pay the annual deductible that is set by Medicare each year for Part B services. After that, Medicare pays 80% of all costs. This means that under Part B, patients must pay 20% of the drug’s cost no matter how high their total medical bills run. Many people with Medicare have supplemental or Medigap insurance to cover their out-of-pocket costs under Part B. For those who choose to go with a Medicare Advantage plan, they will pay much more. Most Medicare Advantage plans force you to pay the 20% co-payment out of pocket. This could quickly cause you to hit your annual out-of-pocket limit under your plan.
Part D and Cancer Drugs
Part D is different. After you pay a certain deductible for your drugs (some plans have no deductible), you must pay a set copay, or a percentage of your drug costs for the rest of the year, or until you reach the donut hole. Again, this deductible amount is set each year. In 2020, the maximum Part D deductible is $435.
Because some cancer drugs are clearly covered under Part B, like those given through an IV in your doctor’s office, you might not be able to find all of your cancer treatment drugs on a Part D plan’s list of covered drugs. The list of covered drugs is also known as the formulary. If you are deciding whether to enroll in a drug plan and you don’t see a drug you need on a plan’s formulary, call the plan. You’ll want to ask if they might cover the drug and how you can go about getting it covered.
What about off-label drugs and Part D?
What is off-label drug use?
When the Food and Drug Administration (FDA) approves a new drug, it means the federal government has found the drug to be safe and effective for a certain disease or condition. The FDA approves the usage of every drug. Drug usage information can be found in the label information printed in the official prescribing information. This approved usage can also be found in the package insert with the drug. It describes the approved dose and way the drug should be given (as a pill, injection, infusion, etc.) Your doctor may prescribe a drug for a use that is not approved by the FDA in some cases. Doctors base this on their knowledge and new advances in medicine. The use of a drug for a disease the FDA did not approve it for, or in a dosage that is not listed on the label, is called “off-label” use of the drug.
The United States allows the use of off-label drugs. But drugs used off-label are only covered under Part D if the use is cited in one of the reference standards for prescription drugs (called a compendium) named in the Medicare law. Part B may cover off-label use of cancer drugs. However, Part D drug plans cannot cover any use not listed in one of the approved reference standards. The National Comprehensive Cancer Network estimates that about half of all uses of drugs in cancer care in the United States are off-label.
This is a topic that hits very close to home for me. If you have seen my About Me page on my website, or you’ve seen some of my other videos where I’ve talked about my son who had cancer, you know that this is something very near and dear to me. My son, when he was eleven years old, was diagnosed with a rare bone cancer called Ewings Sarcoma. He’s 16 years old now and doing fantastic. So we’re very grateful for the great treatment he was able to receive.
I wanted to talk a little about how Medicare will handle your treatments if you are diagnosed with cancer, or are undergoing cancer treatments at the time. Now in the case of the two people who called, these are people who are losing coverage from their employer plan. They are already on Medicare Part A and Part B. Since they are losing their group coverage from work, they are going to be in a guaranteed-issue status. And so they can go to any Medicare supplement company they want to. It’s just like an open enrollment period. There is no pre-existing condition clause – nothing like that they have to worry about. They will be covered from day one because of being guaranteed issue.
Now this will also apply if you are in your open enrollment period. You will be covered from day one. There is no pre-existing conditions clause. And you cannot have your premiums raised unless they raise the rates for everybody who is covered by that plan in your state. And you cannot have your plan canceled unless you just don’t pay for it. It is guaranteed renewable for life. Now that is IF you go with a Medicare Supplement policy.
I want to show you the difference of cancer coverage under the Medicare supplement versus the Medicare Advantage. Then you can see why most people -- when they have a cancer diagnosis – they’re either very glad they have a Medigap plan or they wish that they could get the coverage because it is so much more comprehensive, the coverage that you get on the Medicare supplement if something major like this were to happen.
The first thing I want to cover is chemotherapy treatment. If you are receiving chemo treatments at a physician’s office or a clinic and it is through an IV or injection, that is going to be treated as an outpatient treatment. That will be covered under Part B of Medicare.
Now if you have a Plan F, Plan G, or Plan N Medicare supplement (or Medigap) plan, then those plans are going to pick up the 20% co-pay and pay it completely. If you have a Medicare Advantage plan, then outpatient services – including chemotherapy treatments – you will have a 20% co-pay up to your maximum out of pocket for the year.
I shared in another video just recently of a lady who called us a few weeks ago. She met her out of pocket maximum of $6,700. On January 1, her out of pocket reset and she has already met it again this year – another $6,700. In less than one year, that is $13,400 in co-payments that she has had to pay for chemotherapy in an outpatient situation. And I’m going to cover a little bit more the Medicare Advantage in just a few moments, but I want to make sure you understand how the chemotherapies fall under Part B and Part D.
If you take an oral medication for chemotherapy, here’s how that works. If the oral medication is also available in IV (or injection) form, then it will be covered under Part B. So if your doctor says, “This is your chemo drug and you can IV or have it as an oral medication,” that will be covered under Part B regardless of whether you take the IV or the oral medication. Now if you take an oral medication that is not available in IV form, then that will fall under your Part D Medicare prescription drug plan.
This also applies to anti-nausea medications, as well. As long as the medication is administered within 48 hours and it is administered via IV, or is an oral medication that also has an IV form to it, then that will be covered under Part B. But it must be done within 48 hours of the chemo treatment. If it is an oral medication and there is not an IV (injectable) equivalent, then that is going to be covered under your Part D of Medicare – your Medicare prescription drug plan.
One last thing on the prescription drugs – with all the cutting-edge research that’s going on these days, there are a lot of new drugs that are coming out onto the market that treat cancer all the time. There are also some drugs that are already around that were used for other illnesses or ailments that work well with cancer treatments. The FDA may not have necessarily approved these drugs at the time that your doctor wants you to take them. Those are referred to as “off-label drugs.”
Now, off-label drugs are legal in the United States – you can use them. But they’re not covered under Part B. They are only covered under Part D prescription drug plans. Not all drugs plans are going to cover all of these, so you want to be sure to discuss this with your physician beforehand to know what your portion of the cost is going to be before taking an off-label drug.
The other thing I wanted to talk about as well was… Um, I forgot to talk about radiation. Radiation is also going to be treated as an outpatient service. And that is going to fall under Part B of Medicare. And if you have a Medicare Advantage plan, there again that is going to be an outpatient service that – on most plans – you’re going to have to pay the 20% out of pocket until you reach the maximum out of pocket annually of $6,700.
The problem is with the way that cancer treatments go, when people get cancer and they’re on a Medicare Advantage plan, their out of pocket expenses can get quite high every year, and a lot of them to all the way to the maximum out of pocket every year.
The other disadvantage of having a Medicare Advantage plan is the network limitations. You can go to the doctors that are within their network. You can go the hospitals and the treatment centers that are within their networks. And that’s where your choice lies. If you have a Medicare Supplement plan like a Plan F, a Plan G, or a Plan N, these are just a subsidy to Medicare. So if Medicare approves the treatment, your Plan F, G, and N are going to pick up the difference. That is why so many people that are on the Advantage plans when a cancer diagnosis comes in want to move to the Medicare Supplement.
But here’s the problem – in order to get a Medicare Supplement, when you are in Open Enrollment, when you are turning 65, you can choose any Medicare Supplement you want to. There are no pre-existing conditions like I mentioned. There’s no waiting period – it’s day one coverage no matter where you are in your treatment on a Medicare Supplement.
Now once you are out of your Open Enrollment period -- which would be six months after your 65th birthday or six months after you go on Part B -- you will have to go through underwriting. So, a lot of people go with the Medicare Advantage, thinking it is a cheaper alternative. It’s “free Medicare,” as some agents wrongfully say. You can see that aggravated me when they do that. It is not free. It ends up costing you a lot more if something like this were to happen. But the problem is -- once that diagnosis comes -- making a switch is nearly impossible. You’re going to have to stay with the plan that you have once that cancer diagnosis comes and you want to go to a Medicare Supplement plan.
So the best thing is to just start off with the best coverage! The Medicare Supplement coverage is going to cover all of those cancer needs that you have – chemotherapy, radiation, hospitalization, surgeries. The Plan F is going to cover everything that Medicare approves. The only thing is that on the Plan G you’re going to have a $166 deductible ($166 is the deductible for 2016). And on the Plan N you have the $166 deductible (for 2016) and up to a $20 copay when you go to the doctor.
That is why we definitely recommend the Medicare Supplement. Getting insurance is not for what is happening today. It’s for what is coming down the road. And you don’t want to be stuck in a plan that has limitations; that says, “well, you can’t go to the Mayo Clinic if you want to. You can’t go here. You can’t go there. You can’t go to this top cancer center. You have to go to what’s in our network.” That is not so with a Medicare Supplement plan. As long as that facility accepts Medicare then your Medicare Supplement is good there.
Let me share something on a personal note. When you have something as traumatic as a cancer diagnosis – and trust me, that is about as traumatic as it comes, when you hear the word, CANCER, or stroke, or whatever it may be. If something like that were to happen, the last thing that you want to be worried about is how you’re going to pay the bill. You just need to get well. You need the best doctors, the best facilities, and to get you better, not worry about the bills. Let the insurance so its job. Pick the right plan from the beginning so that that is something you never have to worry about.
Again, my name is Keith Murray. I’m with Integrity Senior Solutions and ExpertMedicare.com. If we can help with any of this – like I said, I’ve walked through this. I understand the plight of cancer patients. If there is anything I can do to help, please give me a call. The telephone number is 1-888-228-6119. You can also visit us at https://expertmedicare.com. We have other videos there that will teach you about Medicare – the parts and plans of Medicare, the different Medicare plans and how they compare against each other, Medicare Supplement vs Medicare Advantage, and under the Supplements we have videos on how the Plan F compares to the Plan G. Just some information there to help you get educated to make the best decision that you can.
Our service is FREE. It costs you nothing to use our service. The insurance company takes care of the agent, so whether you go through an agent or directly to the company you’re going to pay the same cost. You might as well let someone who has been there and done it – I’ve been doing this over 20 years, working with people on Medicare and on their Medicare supplement coverage. So, let my experience go to work for you. It’s not going to cost you anything extra, and making a wrong decision could cost you a lot more.
I’ve got the experience. I know what the companies out there are doing. We can compare company to company. In the 2016 version of the Medicare and You book on page 100, it says that all Medicare Supplement plans are exactly the same from company to company. The only difference is the premium. We can shop all the plans in your area and find out what’s best. So let us go to work for you!
Thanks so much for watching, and if there is anything I can do to help, please let me know how I can best serve you. God bless you. Have a great day!
Keith Murray is an independent agent and the founder and CEO of Integrity Senior Solutions Inc. He has over 22 years of experience working with Seniors to meet their insurance and financial needs.