Medications: Which Part of Medicare Pays for Your Drugs?
A drug can be covered in more than one way. What decides who pays is often not the drug itself. It is where you get it and how you take it.
A pill you take at home is paid one way. A drug a nurse gives you in a clinic is paid a different way. A drug you get in a hospital bed is paid a third way. This page shows you the whole map, so you can tell which part of Medicare pays — and what you are likely to owe.
The short answer
- Drugs you take at home are covered by a drug plan — Part D. You can have a Part D plan on its own, or inside a Medicare Advantage plan.
- Drugs a doctor or nurse gives you in an office or clinic are covered by Part B.
- Drugs you get during a covered hospital or skilled nursing stay are covered by Part A, as part of the stay.
Part A: drugs during a covered stay
If you are admitted to a hospital as an inpatient, the drugs you get there are part of your hospital care. Part A pays for them as part of the stay. The same is true during a covered stay in a skilled nursing facility.
You do not get a drug bill for those drugs. You still owe your share of the stay itself, just as you would if no drugs were involved.
One caution: this rule needs a covered stay. If you are in the hospital for care but have not been admitted as an inpatient, other rules may apply. Ask the hospital how your stay is classed if you are not sure.
Part B: drugs a provider gives you
Part B covers a set of drugs that a doctor or nurse gives you. You do not take these drugs on your own. They include:
- Drugs given by drip or by shot in a doctor's office, a clinic, or a hospital outpatient department
- Certain cancer drugs you take by mouth, when the same drug also comes in a form a provider can give you
- Drugs that keep your body from rejecting a transplanted organ, if Medicare helped pay for the transplant
- Drugs used with covered equipment, such as a nebulizer or a pump
- Insulin used in an insulin pump that Part B covers as equipment
For most Part B drugs, you pay 20% of the cost Medicare allows, after you meet the Part B deductible for the year. There is no yearly cap on that 20% under Original Medicare. A Medicare Supplement plan can pay that 20% for you — see the table below.
Insulin is a special case. If your insulin is used in a covered pump, Part B covers it, and your cost is capped. You pay no more than $35 for a one-month supply of each covered insulin product, and you do not have to meet a deductible first.
Part B does not cover most drugs you take on your own at home. Those drugs belong to Part D.
Part C: Medicare Advantage plans
Most Medicare Advantage plans include drug coverage. If you are in one of these plans, you get your Part A, Part B, and drug coverage through the plan.
The plan's own drug list decides what is covered and what you pay. Each plan has its own list and its own prices, so two plans can treat the same drug in very different ways.
Have a Medicare Advantage plan? Check your plan's drug list before you fill a new prescription: Medicare Advantage.
Part D: drug plans and drug lists
Part D is Medicare drug coverage. You can add a Part D plan to Original Medicare. Or you can get drug coverage through a Medicare Advantage plan, as above.
Each plan has a drug list, called a formulary. The list shows every drug the plan covers. A drug that is not on your plan's list is not covered, unless the plan grants an exception.
Plans sort the drugs on the list into tiers. Your tier is what sets your cost. A low tier means a low cost. A high tier means a high cost. The tier table below shows how this works.
Plans can also set rules on some drugs. A plan may ask your doctor to get approval first. It may ask you to try a lower-cost drug first. Or it may limit how much of a drug you can get at one time.
What Part D costs over a year (2027)
Two numbers frame your year with a drug plan.
- The deductible. This is what you pay first, before the plan starts to share the cost. For 2027, the standard deductible is $700. Your plan may charge less than that, or nothing at all.
- The yearly cap. Once the money you have spent on covered drugs reaches $2,400 in 2027, you pay nothing more for covered drugs for the rest of that year.
Plan year 2027 · Source: CMS (Centers for Medicare & Medicaid Services)
Insulin has its own cap in drug plans too. Under Part D, you pay no more than $35 for a one-month supply of each covered insulin product, and the deductible does not apply to insulin.
Who covers this medication?
Use this table to find your case. Find the row that fits how you get the drug. Then read across to see who pays.
| Your situation | Original Medicare (Parts A & B) | Medicare Advantage (HMO) | Medicare Supplement | Part D | Also possible |
|---|---|---|---|---|---|
| Pills or other drugs you take at home | Not covered. Parts A and B do not cover most drugs you take at home. | Covered with conditions. Most plans include drug coverage. The plan's drug list and tier set your cost. | Not covered. Supplement plans sold today do not include drug coverage. | Covered with conditions. The drug must be on your plan's list. Your tier sets your copay or share of the price. | Medicaid or Extra Help can lower your cost if you qualify. Veterans may use VA pharmacy benefits. |
| A drug a provider gives you by drip or shot at a clinic or office | Covered with conditions. Part B covers drugs a provider gives you. You usually pay 20% of the allowed cost, after the Part B deductible. | Covered with conditions. Your plan covers it under its Part B rules. The plan sets what you pay. | Pays part of your cost. Many plans pay the Part B 20% for you. A supplement never covers a drug on its own — it pays toward your Original Medicare cost. | Not covered. Part D does not pay for drugs that Part B covers. | Medicaid can help with costs if you have both Medicare and Medicaid. |
| Drugs you get during a covered hospital or skilled nursing stay | Covered. Part A covers drugs as part of a covered stay. You owe your share of the stay, not a drug bill. | Covered with conditions. Your plan covers the stay. Your cost follows the plan's terms for hospital care. | Pays part of your cost. Many plans pay toward the Part A deductible and the daily costs of a long stay. | Not covered during a stay Part A covers. Part A pays for drugs in that stay. | Medicaid can help with stay costs if you qualify. |
| Insulin used in an insulin pump | Covered with conditions. Part B covers insulin used in a pump it covers as equipment. You pay no more than $35 for a one-month supply of each covered insulin product, and no deductible applies. | Covered with conditions. Your plan covers pump insulin under Part B rules, and the same $35 monthly limit applies. | Pays part of your cost. If your supplement pays your Part B coinsurance, it should cover that $35 or less for your insulin. | Not covered for insulin in a Part B pump. Part D covers insulin you inject with a pen or a syringe instead. | The $35 limit applies to everyone who takes insulin, even if you get Extra Help. |
| A specialty drug you inject yourself at home | Not covered. Parts A and B do not cover most drugs you give yourself at home. | Covered with conditions. The drug must be on the plan's list. Specialty drugs sit on the top tier, so you pay a share of the price. | Not covered. Supplement plans sold today do not include drug coverage. | Covered with conditions. These drugs usually sit on the specialty tier (Tier 5). You pay a share of the price, not a flat fee. The 2027 cap still protects you: at $2,400 spent, covered drugs cost $0 for the rest of the year. | The drug's maker or a charity fund may help with the cost of some specialty drugs. |
Drug tiers: how your plan sorts your drugs
Plans do not charge the same for every drug on the list. They sort drugs into tiers, from low cost to high cost. Most plans use five tiers, but some use fewer or more.
| Tier | What goes on it | What you usually pay |
|---|---|---|
| Tier 1 — Preferred generic | Generic drugs the plan prefers | The lowest cost of any tier. Often a small flat copay. Some plans charge nothing for some of these drugs. |
| Tier 2 — Generic | Other generic drugs | A low copay, a bit more than Tier 1. |
| Tier 3 — Preferred brand | Brand-name drugs the plan prefers | A higher copay, or a share of the drug's price. |
| Tier 4 — Non-preferred | Brand-name drugs the plan does not prefer | More than Tier 3. Often a share of the price, not a flat fee. |
| Tier 5 — Specialty | Very costly drugs for complex health needs | The highest cost. You pay a share of the price — a percentage — not a flat copay. |
Three things to keep in mind about tiers:
- Each plan makes its own list. The same drug can be on Tier 2 in one plan and Tier 4 in the next.
- Lists change. A plan can move a drug to a higher tier or drop it from the list. Plans tell their members about changes that affect them.
- The deductible may not hit every tier. Some plans let you use low tiers before you meet the deductible. Check your plan's rules.
Have a Medicare Supplement plan?
A supplement plan helps with the costs of Original Medicare. It does not cover your drugs. Supplement plans sold today include no drug coverage at all.
If you have a supplement, you still need a drug plan for the medicines you take at home. That means a Part D plan of your own, unless you have drug coverage from another source Medicare counts as equal, such as a former employer.
Your supplement still helps on the drug side in one way. When Part B covers a drug, many supplement plans pay the 20% you would owe. Read more: Medicare Supplement.
Before you fill a new prescription
- Check the list. Look for the drug on your plan's drug list, and note its tier.
- Ask about a lower tier. Ask your doctor if a generic or a lower-tier drug can do the same job.
- Ask about rules. Ask your plan if the drug needs approval first, or if you must try a different drug first.
- Ask what you will pay. Your plan and your pharmacy can both tell you your cost before you fill the prescription.
Please read this
Care and Living Guide is not connected with or endorsed by Medicare, the Centers for Medicare & Medicaid Services, or any government agency. We are a private publisher. Plan names and program names on this site belong to their owners.
Coverage and costs change. Drug lists (formularies), tiers, and copays can change during the year and differ by plan. Always check with your insurance company or plan directly to confirm what is covered and what you will pay.