“Does Medicare cover cancer treatment?”
It’s a simple enough question. But as with so many aspects of US healthcare, the answer is complex.
Generally speaking, yes—Medicare does pay for cancer treatment. But exactly which treatments will be covered and how much of the cost you’ll be responsible for can vary a great deal. Here’s what you should know.
The Four “Parts” of Medicare
As you probably know, Medicare is a program run by the US federal government to help seniors (age 65 and older) and those with long-term disabilities pay for healthcare. It’s very similar to private insurance in the way it works, but it’s designed to be affordable for people on a long-term fixed income.
The Medicare program is divided into four “parts” that cover different types of treatment. Part A is automatic—you’re enrolled when you reach age 65 if you’ve paid into the system via your work activities (note that if you haven’t worked but are married to someone who worked and paid in, you’ll get coverage, too). As for the other parts, you need to elect them. Approximately three months before you become eligible for coverage, you’ll get paperwork in the mail to help with this. From the time you receive this, you’ll have a grace period of seven months to return your selection. Then, your window closes again until the next open enrollment (which lasts from mid-October to early-December for a start date of Jan 1).
Medicare Part A
Broadly speaking, this branch of Medicare covers hospitalization, surgery, and “in-patient” care (treatments you receive while staying in the hospital overnight). It also covers rehabilitative care in a skilled nursing facility or via home health services, as well as hospice care for those nearing the end of life.
For cancer patients, Part A could apply in many different situations. For example, if you stay in the hospital overnight for a surgical procedure,
get some necessary diagnostic blood work while you’re there, and then recover afterwards in a skilled nursing facility, all of these things would be covered by Part A.
Again, most people 65 and older are automatically covered by Medicare Part A and don’t even have to pay a monthly premium. You do, however, owe an annual deductible ($1,408 in 2020) before Medicare kicks in and begins sharing the burden.
Medicare Part B
The next branch of Medicare, Part B, covers healthcare you get outside of the hospital—i.e. outpatient care. That means doctor visits, medical equipment, home healthcare, medications infused or injected at a center or clinic, and some preventive care.
During cancer treatment, for example, Part B will cover visits with your oncologist and primary care provider. It will also cover X-rays or CT scans you get to track your cancer, outpatient IV chemotherapy treatments, and a wheelchair or walker if you use one during recovery.
Unlike Part A, you do need to pay a monthly premium to keep your Medicare Part B coverage. For most people, this amounts to $144.60 per month. Fortunately, your annual deductible for Medicare Part B is only $198. After that, Medicare will cover 80% of your treatment costs and you’ll be responsible for the remaining 20%—which Part C or a Medigap plan can actually cover.
Also called Medicare Advantage, Medicare Part C plans are government-approved policies offered by private insurance companies. They provide all of the coverage offered by Medicare Part A and B (essentially taking over those two), and may also offer additional benefits such as vision, dental, hearing, and prescription medicine coverage.
What these plans cover (and how much they cost) varies a lot from insurer to insurer. So if you’re signing up for a Medicare Advantage plan, make sure to read the fine print. Note also that a 2018 investigation by the Department of Health and Human Services found that these plans improperly deny many claims
and refuse to cover legitimate medical treatments.
Medicare Part D
Medicare Part D is a program that covers prescription drugs dispensed from a pharmacy directly to you (prescriptions given in the hospital or an infusion center would not go through Part D). If you don’t have drug coverage from a different insurance, consider Part D necessary versus optional because if you decide you want this coverage later, you’ll be asked to pay a 1% penalty in perpetuity on your Part D premiums for each month you were eligible for but did not have Part D. For example, if you were eligible for Part D 24 months ago and had no drug coverage throughout that time period, you would pay 24% more for your Part D premium going forward. There are many different variations of this program offered by private insurance companies, with the typical monthly premium running around $32.
During cancer treatment, prescription drug coverage can be crucial. Pain medication, anti-nausea drugs, hormonal therapies, and oral chemotherapy medications can all be covered by Medicare Part D.
This program can be a financial life-saver, given how expensive some brand-name cancer treatments are. All Medicare Part D plans carry a catastrophic coverage limit ($6,350 in 2020), after which your medications are 95% covered. Once you spend that much out-of-pocket, your prescription drug costs should drop significantly (though keep in mind that if they’re falling from high numbers to start, you may still have large bills to contend with).
As we mentioned above, you’re responsible for 20% of your costs under Medicare Part B. During an expensive cancer treatment, that could leave you on the hook for tens of thousands of dollars. Medicare Supplemental Insurance—aka Medigap—is a way to protect yourself from that financial risk.
While a Medigap policy doesn’t cover everything, it fills a lot of the “gaps” in original Medicare. In 2019, the average Medigap policy cost about $152 per month
. You can see what plans are available with the Medicare Plan Finder tool
(and you can learn even more here
). In addition, you may want to find an insurance salesperson you trust who can walk through the options with you.
One thing to note here is to pick your Medigap carefully because switching can be challenging. While you’re able to change it during open enrollment, unlike first time sign-ups, what you pick at that time can restrict treatment for a pre-existing condition, like cancer, for 6 months when you first start the new plan (this would hold for Advantage Plans as well).
Does my doctor take Medicare?
Again, this seems like it should be a simple question—but it’s a bit more complex than that. When it comes to Medicare, doctors fall in three distinct categories:
- Participating (“accepting assignment”)
Participating, of course, means the doctor is working fully with the Medicare program. This is typically your best financial option for cancer treatment. Sometimes people in the medical field say that these doctors “take assignment” or are “accepting assignment.” That’s just a bit of jargon meaning that they accept payment from Medicare (along with your deductible and copay) to fully cover your treatment. Participating doctors also will typically wait for Medicare to pay its 80% share before asking you for your payment—and they’ll never charge you extra for submitting a claim to Medicare.
Non-participating doctors—contrary to what you might think—still sometimes work with Medicare. But they make these decisions (or “take assignment”) on a case-by-case basis. They may also charge you significantly more than a participating doctor—up to 15% above Medicare’s approved amount. (This is called the “limiting charge” and varies by state.) Your cancer treatment with these doctors may also be more complex from a finance and paperwork perspective. Typically, you’ll have to pay for the entire treatment out of pocket and seek reimbursement from Medicare for its share.
Opt-out doctors don’t work with Medicare at all. If you choose one of these providers, you’re stuck paying the entire cost of your cancer treatment, which you probably don’t want to do.
How much should I expect to spend on cancer treatment?
We know it’s tough to face big financial unknowns, but there isn’t a one-size-fits-all answer to this question. You might end up spending far less than the next person on cancer treatment, depending on the type of cancer you have, the treatment you receive, and the particulars of your Medicare plan. But just as a rough benchmark, one 2017 study
found that Medicare patients spent between roughly $2,000 and $8,000 out of pocket.
If you’re worried about paying for Medicare, there may be programs in your state that can help cover your copays, monthly premium costs, and deductibles. Contact your state’s Medicare Savings Program
office, the Medicare Rights Center
, or 1-800-MEDICARE (1-800-633-4227) for more information.