Does Medicare Cover Chemotherapy and Cancer Drugs?

Medicare Part B covers chemotherapy drugs, immunotherapy, and targeted therapy that are administered by a healthcare provider in an outpatient setting. This includes infusions given in your oncologist's office, hospital outpatient departments, and freestanding infusion centers. Part B also covers the administration itself, including the nursing time, supplies, and facility fees associated with your treatment.

Medicare reimburses providers for Part B drugs at the Average Sales Price (ASP) plus 6%. You pay 20% of the Medicare-approved amount after meeting your annual Part B deductible of $283 in 2026. There is no annual cap on Part B out-of-pocket costs under Original Medicare, which means a year of expensive infused cancer treatment could cost you thousands in coinsurance alone.

Oral cancer drugs that you take at home are covered under Medicare Part D. These include oral chemotherapy agents, hormone therapies, and targeted oral medications for various cancers. Many newer cancer treatments are oral, including drugs for breast cancer (Ibrance, Kisqali, Verzenio), prostate cancer (Xtandi, Erleada), blood cancers (Imbruvica, Calquence), and multiple myeloma (Pomalyst).

Under Part D, oral cancer drugs are typically placed on Tier 4 (preferred specialty) or Tier 5 (non-preferred specialty), which carry the highest cost-sharing. However, the Inflation Reduction Act's $2,100 annual out-of-pocket cap means that no matter how expensive your oral cancer drug is, you will never pay more than $2,100 total for all Part D drugs in a calendar year. The Medicare Prescription Payment Plan (M3P) lets you spread this cost into monthly installments of approximately $175.

Medicare Advantage plans cover all the same cancer treatments as Original Medicare (Part A and Part B), plus most plans include Part D drug coverage (MAPD). The key difference is the annual maximum out-of-pocket (MOOP) limit. In 2026, the in-network MOOP for Medicare Advantage plans cannot exceed $8,850, meaning your total costs for Part A and Part B services are capped regardless of how many infusions or treatments you receive.

However, Medicare Advantage plans use provider networks. If your oncologist or cancer center is not in your plan's network, you may face higher costs or need to switch providers. Some plans require prior authorization for cancer treatments, which can delay the start of therapy. Before enrolling in or staying with a Medicare Advantage plan after a cancer diagnosis, verify that your oncologist, hospital, and preferred cancer center are all in-network.

Medicare Supplement (Medigap) plans are specifically designed to cover the gaps in Original Medicare, including the 20% Part B coinsurance that makes infused cancer treatment so expensive. With a Medigap Plan G, for example, your only out-of-pocket cost for Part B cancer treatment is the $283 annual deductible. After that, Plan G pays 100% of the Medicare-approved coinsurance for all Part B services, including chemotherapy infusions, immunotherapy, radiation, and related lab work.

This is why many Medicare advisors recommend Medigap for beneficiaries with cancer or at high risk for cancer. The predictability of costs is unmatched: you pay your monthly Medigap premium plus the $283 deductible, and everything else is covered. There are no networks, no prior authorization requirements, and no risk of surprise bills from out-of-network providers. You can see any oncologist in the country who accepts Medicare. Compare plans in your area to see what Medigap options are available.