What Medicare Part D Does and Does Not Cover

Medicare Part B covers a limited number of medications. That leaves the bulk of your prescription drug coverage to Medicare Part D. While Part D plans can be extensive, they may not always cover what you need. Understanding what a Part D plan has to offer and what it does and does not cover will help you to find the plan that is best for you.

Your Medicare Part D plan works similar to other private insurance prescription drug plans. Each plan will provide you with a list of medications it agrees to cover. This list is called a formulary. The formulary is usually broken up into different tiers. The lower the tier, the lower the cost of the medication. These medications tend to be generic. Medications on the higher tiers tend to be brand name and are more expensive.

To control costs, your plan may require your healthcare provider to pursue a prior authorization before they will cover certain medications. Paperwork will need to be completed that explains why the medication in question is being prescribed and why it is medically necessary. It is at the discretion of your Part D plan to approve or deny the request.

In this case, you will be asked to trial a lower cost drug first. If the treatment is unsuccessful, then your plan may consider covering the higher tier drug.

Part D plans are required to cover at least two medications in each of 148 different drug classes. Six of those drug classes are protected. They include antidepressants, antipsychotics, chemotherapy agents, HIV/AIDS drugs, immunosuppressants, and seizure medications. Nearly all medications will be covered in these categories, at least for now.

A new proposal by the Trump administration aims to lift Medicare’s restrictions on these protected drug classes. The proposal would allow Part D plans to exclude drugs in these six categories, starting with drugs that have prices increasing faster than inflation. The proposal could also lead to health plans denying coverage for drugs that are a new form of an old product.

While Medicare would still be required to cover at least two drugs per category under current law, there could be repercussions for people with certain medical conditions. Limiting access to these critical drugs could have serious consequences for patients with cancer, HIV, mental illness, and seizure disorders. People who have had an organ transplant could also be denied access to life-saving immunosuppressive therapies. The Partnership for Part D Access and other groups have spoken out against the proposal. 

Medicare only wants to cover services that they consider to be medically necessary. That being the case, there are many medications that the government does not allow Medicare Part D plans to cover at all.

Medications that are excluded from your Part D plan include:

• medications covered by Medicare Parts A and B
• medications for the relief of cough and cold symptoms
• medications purchased from a foreign country
• medications that require testing exclusive to the manufacturer
• medications used for hair growth or other cosmetic purposes
• fertility drugs
• medications for weight management (such as for anorexia, weight gain, or weight loss)
• non-prescription medications
• sexual and erectile dysfunction drugs

Except for prenatal vitamins and fluoride, prescription vitamins and minerals are not covered. Niacin may be covered, but only if it is prescribed for a specified medical condition (not as a vitamin supplement).

Barbiturates and benzodiazepines were previously excluded as well, but this decision was reversed in 2013.

Keep in mind that Medicare Part D does not pay for medical marijuana beyond three FDA-approved cannabinoid medications. These are only covered for very specific medical conditions. This is because the DEA still classifies marijuana as a Schedule I drug.

More than nine million people are dual eligible for both Medicare and Medicaid. In this case, there are rules as to when Medicare or Medicaid pays for your medication.

Each state's Medicaid program will have its own list of excluded medications. This may or may not correspond with the medications excluded from your Part D plan as noted above. For example, California Medicaid will pay for all medications used to treat anorexia, weight gain, or weight loss, but Florida Medicaid will pay for none.

When you go to the hospital, your Medicare Part D plan may or may not pay for any medications you receive during your stay. It depends on whether you are placed under observation or are admitted as an inpatient.

As an inpatient, your medications are billed to Medicare Part A. Part A, however, does not pay for observation services. In this case, any medication that you receive will likely be billed to you directly. You will need to submit a claim to your Part D plan for a refund.

Keep in mind that any medications that are not on your formulary are unlikely to be reimbursed.

With all the Medicare Part D options you have, it can be hard to know which one to pick. Take a close look at each plan's formulary to see if it covers the medications you need and check out how much it costs. Understanding what these plans cover, how these plans work in the hospital setting, and how they work when you also have Medicaid will help you to make the best decision.