The Difference Between Part B and Part D Prescription Drug Coverage

If you are on Medicare, odds are you rely on a Part D plan for your prescription drug coverage. If you have certain medical conditions, you may not even be aware that some of your medications are covered by Part B. In fact, you can thank Part B for covering many of the adult vaccinations you receive.

Part B Prescription Coverage

Whether you choose Original Medicare (Part A and Part B) or a Medicare Advantage (Part C) plan, you have access to medications covered by Part B. Many of these medications are limited to people with specific medical conditions. The following list is not all-inclusive but reviews all the covered Part B categories.

Oral Medications

• Chemotherapy drugs*
• Anti-nausea medication as part of a chemotherapy regimen*
• Immunosuppressive medications for people who have had an organ transplant that was covered by Medicare
• Medications used for end-stage renal disease (ESRD)

* Oral chemotherapy and anti-nausea agents have to meet certain criteria to be covered by Part B. While the majority of injectable medications will be covered by Part B, keep in mind that some drugs may be excluded. The coverage requirements change on an annual basis.

Injectable Medications

• Antigens (e.g., allergy shots) that are prepared by a healthcare provider and administered by a trained individual
• Blood-clotting factors for people with hemophilia
• Erythropoiesis-stimulating agents for people who have ESRD or anemia related to certain medical conditions
• Intravenous Immune Globulin (IVIG) for people with a diagnosis of primary immune deficiency disease
• Osteoporosis drugs for women who have had a fracture due to post-menopausal osteoporosis
• Other injectable and infused medications administered by a licensed medical professional (e.g., biologic agents used to treat inflammatory bowel disease, psoriasis, and rheumatoid arthritis)*
• Parenteral (IV) nutrition or tube feeds for people who cannot take food by mouth or absorb nutrition in their GI tract

Vaccinations

• COVID-19 vaccine
• Hepatitis B vaccine for people at moderate to high risk*
• Influenza vaccine ("flu shot")
• Pneumococcal vaccine ("pneumonia shot")
• Rabies vaccine for people bitten by an animal suspected to have rabies
• Tetanus vaccine for people with a dirty wound from an injury that penetrated deep into the skin and tissue

* Hepatitis B risk factors for the purpose of Part B coverage include diabetes mellitus, ESRD, hemophilia, living with someone who has hepatitis B, or being a healthcare worker who could be exposed to blood or other bodily fluid.

Medical Equipment Used to Administer Medications

• Infusion pumps
• Nebulizer machines

Part D Prescription Coverage

The majority of your prescription medications are covered by Medicare Part D. Some Medicare Advantage plans also include Part D coverage.

At a minimum, Part D plans are required to cover at least two medications in each therapeutic drug class. For six of those classes—antidepressants, antipsychotics, chemotherapy agents, HIV/AIDS drugs, immunosuppressants, and seizure medications—nearly all medications will be covered. 

Part D plans also cannot charge you more than 25% of the retail cost of drugs on their formulary. If you need a more extensive plan or a plan that covers specific medications, you may need to do some searching. It is possible that you could pay more than the basic standard premium which is $31.50 per month for 2023.

How Parts B and D Work Together

Medicare Parts B and D pay for medications you receive in the ambulatory setting, i.e., medications you get when you are not admitted to a hospital. They won't pay towards the same prescription though. You can only turn to one part of Medicare or the other for any given drug.

Medication coverage in the hospital changes based on your situation.

• You are admitted as an inpatient. In this case, all your medications will be covered by your Part A deductible for the first 60 days of care and copayment for subsequent days.
• You are placed under observation or have outpatient orders. Part B will cover any intravenous or intramuscular medications you receive, If you receive oral medications that are not on the Part B list of approved medications, the hospital will bill you directly for those medications. You are responsible for paying the hospital yourself but you can send copies of your hospital bills to your Part D plan for reimbursement. Unfortunately, if you receive a medication that is not on your Part D formulary, your plan may not pay for it.

Medicare Advantage Plans Negotiate Costs

The anti-kickback statute prohibits manufacturers from giving or offering to give anything of value to someone to induce the purchase of any item or service for which payment may be made by a federal healthcare program. This includes medications from Medicare Part B and Part D. This is the reason you cannot use coupons, rebates, or vouchers to keep your drug costs down when you are on Medicare.

Although you cannot negotiate with the pharmaceutical companies yourself, your Medicare Advantage plan may do so on your behalf. Starting in 2019, Medicare Advantage plans were able to negotiate prices of medicines covered by Medicare Part B.

Medicare Advantage plans will do so by using step therapy to keep costs down. In this scenario, your plan may require that you try a less expensive medication before moving you up to a more expensive alternative if the first treatment is not effective. Private insurance plans that have used this model have achieved discounts of 15-20% whereas Medicare has paid full price.

Step therapy will also affect how much you spend on Part D drugs. This is because the less expensive medication options recommended by your plan are more likely to be on your Part D formulary. The goal is for your Medicare Advantage plan to contain costs. It will do this by shifting costs to low-cost Part D alternatives and away from more pricy healthcare provider-administered Part B drugs.

Part D Plans Negotiate Costs

The Inflation Reduction Act was passed in 2022. It will allow Medicare to negotiate directly with drug companies. The type and number of drugs that can be included will be limited to 10 in the first year of the Medicare Drug Price Negotiation Program but will increase to 20 over the years.

Only Part D drugs will be up for negotiation in the first year, 2026. Part B drugs will also be eligible for negotiation starting in 2028.

Summary

Not everyone realizes they get Medicare prescription drug coverage from both Part B and Part D. Understanding when each part of Medicare covers and how much you will pay out of pocket will help you to plan ahead and budget your expenses.