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. Knowing how Medicare covers cancer 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 B Cover 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 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, as that is where your out of pocket expenses can start to elevate if you don’t have the right coverage.

Under Part B of Medicare, there is an annual Part B deductible ($183 in 2017) that is payable once a year. After that, Medicare pays 80% of Part B expenses and the remaining 20% is left up to you to pay – whether that is out of pocket or whether you have insurance coverage to pay it for you in some instances.

 

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. And 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 which 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 2017 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 because there is underwriting involved unless you are enrolling during your Open Enrollment period surrounding your initial enrollment into Part B of Medicare, are already on Part B but are turning 65, or are eligible for a guarantee issue status because of losing employer coverage after age 65. Now as to why Medigap is the best option.

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 $184 for 2017. Even better is that there is no cap on how much the Medigap plans will pay on the Part B 20% co-insurance.

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.

 

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. Thos 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. 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 because your out-of-pocket costs will vary depending on which part covers each drug.

For services covered under Medicare Part B, patients must first pay the annual deductible that is set by Medicare each year. 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 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 2017, the deductible is $400.

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 usage of every drug. The 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.

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Keith Murray is an independent agent and the founder and owner of Integrity Senior Solutions Inc. He has over 21 years of experience working with Seniors to meet their insurance and financial needs.