Medicare Prescription Costs: Part B vs. Part D vs. MA Plans

Medicare beneficiaries have a few options for how they get coverage for prescription drug costs. If you’re preparing your transition to Medicare and are looking at prescription drug coverage options, or are helping a parent to do so, getting clarity now can help you avoid unnecessary costs and frustration later. This article will help you understand how to get prescription drug coverage if you choose original Medicare with a Part D prescription drug plan or a Medicare Advantage plan.

How Medicare covers prescription drugs

There are two main ways to use Medicare plans to cover prescription drug costs. These options depend on the type of Medicare plan you choose. If you have original Medicare for your health coverage (Part A and Part B), you can buy a separate private prescription drug plan called Part D to get comprehensive prescription drug coverage.

The other option is for people who have chosen to replace original Medicare with a Medicare Advantage plan, known as Part C. Private insurers offer Part C plans that include all the services of Parts A and B, as well as additional services that almost always include prescription drug coverage similar to Part D.

When it comes to prescription drugs, Medicare relies on various components to pay for medications. A drug might fall under:

• Part B, if it’s administered by a doctor.
• Part D, if you fill it at a pharmacy.
• Part C, if you have a Medicare Advantage plan that typically combines hospital, medical, and prescription coverage under one insurer.

To sum it up, your prescription drug costs can be covered either through Part B and Part D of original Medicare or through Part C (Medicare Advantage), depending on which type of Medicare you have selected.

Comparison of how Medicare covers prescription drugs

Type of coverage	What it covers	Where you get the drug	Typical costs	Best for
Medicare Part B	Drugs administered by a doctor (infusions, injections, certain vaccines)	Doctor’s office or outpatient clinic	20% coinsurance after the Part B deductible (Medigap may cover this)	High-cost clinical treatments or conditions requiring provider-administered drugs
Medicare Part D	Retail pharmacy prescriptions (maintenance meds, insulin, antibiotics, shingles vaccine)	Pharmacy or mail order	Premium + deductible + copays/coinsurance based on the plan’s formulary	People taking several ongoing medications or wanting a broad pharmacy choice
Medicare Advantage (Part C)	Replaces Part A, Part B, and usually Part D coverage	Plan network pharmacies and providers	Copays for most drugs	People who prefer bundled coverage, lower upfront costs, or extra benefits

What’s covered under Medicare Part B

Part B focuses on drugs that have to be administered in a clinical setting, usually because you can’t safely or effectively take them at home.

Typical examples include:

• Doctor-administered injections, like certain autoimmune or osteoporosis medicines.
• Infusion therapies, such as chemotherapy or advanced biologics.
• Drugs that involve medical equipment, such as using a nebulizer with inhalation solutions.
• Vaccines that Part B covers, including flu, COVID-19, and pneumococcal vaccines.

What Part B costs look like

Under Part B, you’d be responsible for:

• The annual Part B deductible.
• 20% coinsurance on most Part B-covered medications after paying the deductible.

There is no out-of-pocket maximum under original Medicare, so many people buy a Medigap (supplemental insurance) plan to protect themselves from that 20% coinsurance. Medigap can cover some or all of it.

What’s covered under Medicare Part D

Part D is your traditional prescription drug coverage, offered by private insurers, which deals with the medications you pick up at your pharmacy or by mail order. 

Part D coverage could include:

• Maintenance medications for chronic conditions (such as blood pressure, cholesterol, heart disease, and thyroid treatment).
• Diabetes medications in oral form, plus many insulins.
• Osteoporosis drugs you take at home.
• Antivirals and antibiotics.
• The shingles vaccine.

How Part D costs work

Part D plans vary because the private insurers issuing them design each plan’s coverage. However, they all use similar components, which are:

• A monthly premium.
• Formulary tiers, ranging from low-cost generics to high-cost specialty drugs.
• An annual deductible, which some plans might waive for lower-tier drugs.
• Copays or coinsurance, which differ by drug tier.
• Preferred pharmacies, where you’ll usually find the lowest copays.

Understanding how your medications figure into a plan’s formulary (the list of covered medications) is essential. A drug might cost $20 with one Part D plan and $80 with another simply because it falls into a different tier or because the insurer has negotiated different rates.

This price variation is also why reviewing your plan each year during open enrollment is so crucial. Formularies can change from year to year, even when the plan name stays the same.

How Medicare Advantage (Part C) plans combine coverage

Medicare Advantage (MA) plans combine and replace Part A, Part B, and usually Part D coverage under one plan. You still receive all the benefits of original Medicare. However, your plan sets the rules for provider networks, drug costs, and coverage. 

Prescription drug coverage under MA plans

The vast majority of Medicare Advantage plans (88%) have prescription drug coverage.

These plans often feature:

• Predictable copays for most prescription drugs.
• Annual maximum out-of-pocket limits (MOOPs) for Parts A and B services.
• Network limitations of available doctors, pharmacies, and sometimes mail-order options.
• Plan-specific formularies.

Some Medicare Advantage plans offer great prices on commonly used generic drugs. Others might charge more for specialty medications or impose stricter rules, such as requiring prior authorization or step therapy, where individuals must first try a less expensive or preferred medication before their plan will cover a more expensive one.

Variation among plans

The key differences between plans can be found in:

• Premium amounts.
• Copay levels for each drug tier.
• Which pharmacies are considered preferred.
• How the plan covers expensive Part B drugs (like for chemotherapy).

Because of these variations, the same medication could have very different out-of-pocket costs between Medicare Advantage plans, even if they’re in the same zip code.

Where to get official Medicare prescription cost and coverage information

The most reliable place to identify and compare Medicare prescription costs is the Medicare plan finder. By entering your exact prescriptions and preferred pharmacies, you’ll see:

• Estimated annual cost differences.
• Premiums and deductibles.
• Copays and coinsurance.
• Whether your drugs are covered.
• Required cost controls (such as prior authorization and quantity limits).

Because insurers change plan details each year, you’ll want to review your coverage during the Medicare open enrollment period, which runs from October 15 to December 7.

Help with Medicare prescription costs

Several programs are available to help people with prescription costs:

• Extra Help, the federal low-income subsidy for Part D.
• State Health Insurance Assistance Programs (SHIPs) for free, unbiased guidance.
• State Pharmaceutical Assistance Programs (SPAPs), where available.
• Drug manufacturer programs, particularly for high-cost specialty medications.

When it comes to Medicare prescription costs, the most important step is knowing which part of Medicare covers which drug and how each part structures your costs. 

Again, Part B covers drugs administered by a doctor. Part D covers drugs you pick up at the pharmacy. Medicare Advantage plans package everything together, but they vary widely in how they price medications.

Matching your medication list to the right plan and reviewing that match each year are the best ways to avoid unnecessary expenses. Clarity now can go a long way toward preventing surprise bills later.