Does Medicare Cover Prescriptions? 

The keys to living a long, healthy life typically include eating right and getting regular exercise. Despite this, disease and injury don’t always play by the rules. For many seniors in the United States, illnesses require more than just an apple a day – they require prescription medications.

Prescription medications are available to treat all kinds of medical conditions. From infections to cancer, there are very few situations where a prescription is not available, and modern medical research has allowed scientists to create safer medications that target relief than at any time in the history of humanity.

The cost of prescription medications

While seniors can rest easy at night knowing that medications are available to help in the event of a medical concern, what may keep them up is the cost of these medications. From 2022 to 2023 alone, the cost of single-source prescription drugs in the United States rose over 7%, and the cost of multi-source drugs rose 26%. This is according to the U.S. Department of Health and Human Services.

To make matters more challenging, the cost of many prescriptions is very difficult to accommodate on a fixed income without insurance. Some seniors rely exclusively on Social Security income to cover their food and household bills, and when prescription drug costs get thrown into the mix, a tight budget can snap.

How does Medicare cover prescriptions?

Fortunately, seniors can turn to Medicare benefits to help cover the cost of many prescription medications. Medicare is a health insurance program governed by the Centers for Medicare & Medicaid Services (CMS). The cost of Medicare is shared between workers who pay Federal Insurance Contributions Act (FICA) taxes and premiums paid by Medicare recipients.

When Medicare was introduced to American seniors in 1965, the program did not include a benefit for prescription drug coverage. It wasn’t until 2006 that prescription medication coverage was added to Medicare benefits through Medicare Part D. Today, millions of America’s seniors rely on Part D to help cover the cost of prescription drugs.

Medicare Part D premium costs

Although Medicare Part D helps to offset the cost of prescriptions, it doesn’t provide full coverage for medications. Medicare recipients generally are required to pay a monthly premium to carry Medicare Part D. Premium fees can vary based on income and tax filing status, with high earners paying more. In general, plans that cover more prescription drugs will come with higher premiums.

In fact, Medicare recipients who have an income above $103,000 as a single tax filer or $206,000 when married and filing jointly will face an income-related monthly adjustment amount (IRMAA). This is an additional premium on top of the plan premium, and the amount of an IRMAA goes up as income rises.

Medicare Part D deductible costs

Medicare Part D plans also come with deductibles. These are amounts Medicare recipients must incur in qualifying prescription drug costs before Medicare benefits are used to help pay for medications. In 2024, the maximum Part D deductible can be no higher than $545 per year.

Copay costs for medications under Part D

A copay is a fee that is paid per medication, and it is paid at the time of purchase. Some medications covered by Part D may still require a copay despite being discounted.

As a side note, Medicare benefits for prescription drugs are only valid at participating retail pharmacies. Medications administered while admitted to a hospital or skilled nursing facility are covered by Medicare Part A. Medications administered in an outpatient clinical setting are generally covered by Medicare Part B.