Each year, over 100,000 Medicare beneficiaries are diagnosed with a form of cancer. Inevitably, our clients often ask us about what Medicare would cover in the case that they were diagnosed with cancer.
We also get the dreaded question of, “what now?” for the clients who want to know their options after being diagnosed. In this Medicare Cancer Guide, we will take a deep dive into what exactly is covered by Medicare when it comes to cancer.
Does Medicare cover cancer?
In simple terms, yes, Medicare does cover cancer treatment. It is important to understand how each part of Medicare covers the treatment options so that you’ll know exactly what to expect from your coverage.
If you are enrolled in Original Medicare, your benefits will come directly from Medicare Parts A, B and D. You can see any doctor or fac that accepts Medicare.
Medicare Part A Cancer Coverage
Medicare Part A will cover most cancer treatments that you receive while staying at the hospital. Your first day in the hospital begins a new benefit period. Before your coverage kicks in and begins to pay, you will have to pay a deductible. The deductible that must be met with Part A is $1,340 per benefit period as of 2018. Once this is met though, Medicare will pay for all approved Part A expenses for the next 60 days.
In the case that you have an extended hospital stay beyond 60 days in a row, you will begin to incur daily hospital copays that get larger over time. Fortunately, inpatient stays this long are rare, and many Medicare beneficiaries have Medigap plans take care of the deductible and daily copays leaving you with no extra out-of-pocket costs. We’ll discuss more on Medigap plans later on.
Additionally, Part A will cover skilled nursing care under certain conditions for a period of up to 100 days. To qualify for skilled nursing facility (SNF) care, you must first spend 3 or more days in the hospital. Once your doctor deems you ready to leave the hospital, he can transfer you to an SNF for follow-up care while you heal. The first 20 days in a skilled nursing facility are covered in full by Medicare.
On the 21st day, you will begin to incur a daily copay. This is another benefit that a Medigap plan can help to cover for you. Your skilled nursing benefits may include wound care or physical, occupational or speech therapy.
If hospice benefits are needed, Medicare also provides care at any certified hospice facility.
Medicare Part B Cancer Coverage
Under Part B you receive preventive care benefits such as mammograms and colonoscopies that are covered 100% by Medicare. There are cancer screenings that fall into this category and Medicare encourages you to take advantage of them. This is an initiative to catch any signs of cancer early and give you the best chance of full recovery if you are diagnosed.
Part B’s outpatient coverage also pays for doctor visits, lab testing, and diagnostic imaging, all of which are services that you might expect to use when treating for cancer. Part B also covers chemotherapy and radiation. Chemotherapy is one of the most common treatments for cancer. Fortunately, if your treatment is administered in a clinical setting, chemotherapy and radiation are covered by Part B.
Your Part B benefits are delivered on an annual basis. You are responsible for a one-time Part B deductible and then Medicare covers 80% of these outpatient treatments. This means you are left with paying the other 20% out-of-pocket. There is no cap on the total you might spend in any given year, so it’s important to have supplemental coverage that will help you to pay for this.
It’s important to realize that some chemotherapy treatments today are given orally on an outpatient basis, so let’s look into how Medicare decides where your treatment will fall.
Medicare’s Coverage of Cancer Drugs
Figuring out whether your cancer drugs fall under Part B or Part D can be confusing. The key to understanding it is to identify how the drug is administered. Here’s how it works:
Part B Drugs
Cancer medication that you receive in a clinical setting or at your doctor’s office will fall under Part B. Part B will cover 80% of the drugs and you will pay the other 20% (unless you have a Medigap plan, it will pay the other 20%). These Part B drugs are commonly IV infusion chemotherapy drugs or anti-nausea medicines.
In some cases, your doctor has the choice to give you a medication by injection or in pill form. If the doctor has a choice between giving you a drug by mouth or by IV, then the oral drug should be covered by Part B. There are some rules as to how quickly your doctor prescribes it after a cancer treatment, so be sure to speak with your physician about this.
Part D Drugs
Medications that you fill yourself at a local pharmacy will be covered by Part D. This includes medications you take orally or inject yourself.
Part D covers several generic cancer medications, such as Tamoxifen or Flutamide. Your Part D copay on these drugs will be dependent upon which tier they fall into on your formulary.
Many of the cancer drugs listed on Part D drug plan formularies are brand-name medications. In turn, that causes your copayments and coinsurance to be much higher. It’s important to have a Part D plan in place so that you aren’t paying full price for these medications.
Tarceva is a good example of a commonly prescribed brand-name drug. Tarceva is a newer cancer medication that would be filled under Part D and can be quite expensive even with Part D drug coverage.
With certain types of cancer, your doctor may recommend an ongoing prescription to avoid a reoccurrence. This means you may be taking the medication long-term. You’ll want to shop your Part D drug plan every year to make sure you are enrolled in the plan that gives you the lowest possible pricing for your medications.
The importance of Part D with cancer drugs
As you may already know, Part D is a voluntary program. Because of this, people sometimes opt to not enroll to save money (or because they don’t currently take drugs). This can be a costly mistake if you are diagnosed with cancer. The cost of some of these cancer drugs could be potentially devastating to your finances.
I will never forget a situation we encountered several years ago. We had a client that knowingly passed on enrolling in Part D coverage because she was healthy. Not long after, she developed cancer and was prescribed a brand-name medication, Gleevec, in early autumn.
Here’s where it gets crazy:
The Gleevec cost her $5,600 a month for the next four months. You read that right, she paid over $20,000 for that medication over the next four months.
The silver lining for her was that this whole situation happened just before the annual enrollment period for Part D. That January we helped her get a Part D plan, where her catastrophic coverage on the plan protected her from that ever happening again.
With that said, we hope you can see now why enrolling in Part D when you are first eligible is so important.
Let me add one last note; your insurance agent makes about $3 per month on the renewal of that plan. It’s not a money-maker for your agent, so there’s little financial motivation for your agent to recommend it to you. However, it is extremely important coverage for you. We don’t advise skipping it.
What you will pay out-of-pocket
What you will end up paying out-of-pocket for cancer treatment will vary widely based upon what services you need and what other insurance you may have.
As we explained above, Medicare Parts A, B, and D provide some of your benefits but you are responsible for your copayments, coinsurance, or deductibles. People who have enrolled in suitable supplemental coverage will have much lower and much more predictable expenses than someone who is enrolled in only Original Medicare.
Some doctors may recommend you get cancer treatments more often than Medicare covers. Also, it is possible that a treatment may get recommended but is not covered by Medicare. If this happens, you may have to pay some or all of the costs. If you are unsure about whether a service is covered, check with your Medicare insurance broker to get the facts.
What’s not covered by Medicare
While it is important to know what Medicare does cover, it is equally important to know what it does not cover:
- Staying in an assisted living facility
- Adult day care
- Long-term nursing home care
- Medical food or nutritional supplements (except enteral nutrition equipment)
- Services that help you with activities of daily living (like bathing and eating) that do not require skilled care
Many individuals are surprised to learn that Medicare does not cover long-term care services. It will cover any medical needs you have while in long-term care, but it does not pay for your monthly rent for your room or apartment in a long-term care facility. You can pay this privately out of your own retirement savings or if you purchased a long-term care policy earlier in life, that policy may kick in to help you cover some of the costs of assisted living or long-term care.
Options for Filling in the Gaps
Medigap and Cancer Coverage
While Medicare doesn’t cover everything, the good news is that there is supplemental options to help you fill in those gaps. The most common form of coverage is a Medigap plan, also called a Medicare Supplement.
Nearly all Medigap plans, such as Plan F, Plan G, and Plan N, will pay that 20% that Medicare Part B does not cover. Several Medigap plans also cover your Part A and/or Part B deductibles. This makes Medigap one of the best Medicare plans for cancer patients.
Real-Life Example
Martha is currently receiving chemotherapy for breast cancer. Her chemotherapy will be covered 80% by Medicare Part B. If Martha has a Medicare supplement Plan F, that plan will pay both her Part A and Part B deductibles as well as the 20% that Medicare will not be covering.
In other words, Martha will owe nothing for any of her Medicare-approved cancer treatments.
Additionally, if Martha has already been diagnosed with cancer prior to turning 65, she will not be turned down for Medigap coverage if she applies during her open enrollment window for Medigap. Martha will have 6-months after her Part B effective date where she will be able to buy any Medigap with no health questions asked.
Medigap Comparison
In contrast to Plan F, there are plans with lower premiums such as Medigap Plan G or N. With these plans, you pay your own Part B deductible. On Plan N you also have some copays and possible excess charges out of pocket if you treat with a doctor that doesn’t accept Medicare’s assignment rates.
You can compare the benefits between Medigap plans using our Medigap comparison chart.
Medicare Advantage and Cancer Coverage
Medicare Advantage plans have identical benefits to that of Parts A and B of Original Medicare. However, the way you access those benefits and pay for services is a little different.
Most Medicare Advantage plans have an HMO or PPO network of providers. In some cases, specialist (such as oncologists) or specific hospitals that you prefer may not be in the plan’s network. Be aware that if you have chosen to get your coverage from a Medicare Advantage plan, that you will need to treat with doctors in the network to make sure that your treatments are covered and that you get them at the lowest possible out-of-pocket copays and coinsurance.
Your Potential Coinsurance with Medicare Advantage
There are certain cancer treatments and services under Medicare Advantage plans that may require up to a 20% coinsurance from you. It’s very common for Advantage plans to charge 20% for chemotherapy and radiation.
You will pay these copays until you hit the plan’s yearly maximum. The maximum can be as high as $6,700 per calendar year within the network, and even higher out-of-network. Be prepared for what you might spend in the event of a cancer diagnosis.
Real-Life Example
Frank has prostate cancer and is receiving radiation treatment. His Medicare Advantage plan requires him to pay a 20% coinsurance for the each of the treatments. While getting treatment, he also has bi-weekly appointments with his oncologist which are a $50 copayment per visit.
Frank will pay the 20% radiation cost and all doctor copays until he reaches an out-of-pocket total of $6,700 in that calendar year. From then on, his plan will cover 100% through December, but everything resets in January. Frank will begin paying that 20% again for his treatments in the following year.
What’s the point here?
If you choose to go with a Medicare Advantage plan, make sure you are setting money aside for these out-of-pocket copays that arise. Additionally, if diagnosed with cancer, you could consider purchasing a cancer policy that would help cover the costs. Cancer policies can also help with costs Medicare doesn’t cover, such as travel and lodging for you and your family while you are undergoing treatment.
Being in this industry for some time, it has been our personal experience that those diagnosed with cancer (while covered by a Medicare Advantage plan) often want to switch to a Medigap plan that has far lower back-end expenses. Unfortunately, the cancer diagnosis prevents them from switching in most states because they cannot pass medical underwriting to get approved for the Medigap plan.
Appealing payment/coverage decisions
If you have a claim or treatment that is denied by Medicare, you have the option to appeal. You have the right to appeal if Medicare denies any of the following requests:
- Health care service, supply, item, or prescription that you think you should be able to get
- Payment of a health care service, supply, item, or a prescription drug you already got
- To change the amount you must pay for a health care service, supply, item, or prescription drug
Additionally, if Medicare stops providing or paying for all or part of a health care service, supply, item, or prescription drug you believe you still need, you can appeal. The appeal process applies to Medicare, your Medicare health plan, and Medicare Part D.
Clients of ours can always count on our team assisting them with this appeal process. Our team has advocated for many beneficiaries when claims issues have arisen so that they have someone to guide them through the process. This is a major benefit of enrolling in your policy through our agency.
To sum it all up
Does Original Medicare cover cancer treatment on an outpatient basis, like chemotherapy? Yes.
Does Original Medicare cover outpatient drugs to treat cancer? Yes, but only for those that have Medicare Part D.
Though this is a lot of information to take in, it is important to know as you select your Medicare insurance plan. What insurance plan would give you the most peace of mind if you were to be diagnosed with cancer?
Do you have questions about Medicare coverage for cancer treatment? We’d love to hear your thoughts about Medicare and cancer coverage in the comments below.
