Medicare Part B vs. Part D: Drug Coverage Explained

Updated: June 26, 2026

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Key Takeaways
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Medicare Part B and Part D both cover drugs, but which one applies depends on how the drug is delivered.

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Part D's 2026 maximum deductible is $615 and its base national premium is $38.99 per month.

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Going 63 or more days without Part D or creditable drug coverage triggers a permanent penalty of 1% per uncovered month.

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Most beneficiaries on Original Medicare need a standalone Part D plan to avoid uncapped out-of-pocket drug costs at the pharmacy.

What Is the Difference Between Medicare Part B and Part D?

Medicare Part B covers doctor visits, outpatient procedures and drugs a provider administers in a clinical setting. Medicare Part D covers medications a beneficiary fills at a pharmacy and takes at home.

The difference in billing is that Part B applies 20% coinsurance after the $283 annual deductible, and Part D uses a tiered formulary with a 2026 deductible of up to $615. Original Medicare needs both to cover the full range of drug delivery settings.

A beneficiary with only Part B and no Part D plan pays 100% of outpatient pharmacy costs. Part B's drug benefit stops at the clinic door. Both parts are needed to avoid open-ended drug cost exposure.

What It Covers
Drugs administered by a provider in a clinical setting (infusions, injections, certain oral cancer drugs, vaccines)
Outpatient drugs self-administered at home and picked up from a pharmacy

2026 Deductible

$283 annual deductible, shared with all Part B services

Up to $615 per year, plan-specific and some plans have $0 deductible 

2026 Cost Sharing

20% coinsurance of Medicare-approved amount after deductible, no annual cap

25% coinsurance after deductible until $2,100 out-of-pocket threshold, $0 cost sharing after that (catastrophic coverage) 

2026 Premium

$202.90/month standard

Varies by plan, national base beneficiary premium $38.99/month

Formulary

No formulary and coverage determined by Medicare medical necessity rules

Tiered formulary set by each plan and drugs not on formulary are not covered

Where You Get the Drug
Doctor's office, hospital outpatient department, infusion center
Retail pharmacy, mail-order pharmacy, specialty pharmacy
Late Enrollment Penalty

10% per full year of delay (permanent)

1% of $38.99 base premium per uncovered month (permanent)

Enrollment Required?
Yes, active enrollment required unless auto-enrolled
Yes, separate enrollment in a standalone PDP or Medicare Advantage plan with drug coverage

The cost-sharing difference is the most consequential for most beneficiaries. Part B's 20% coinsurance on administered drugs has no annual cap, important for beneficiaries on high-cost infusion therapies. Part D's catastrophic coverage threshold eliminates cost sharing entirely once out-of-pocket drug spending is $2,100 in 2026, a defined ceiling that Part B coverage doesn't have.

Note: All 2026 figures sourced from CMS (cms.gov) and medicare.gov. Part D premiums vary by plan. The $38.99 national base beneficiary premium is used to calculate penalties, not individual plan premiums.

Which Drugs Does Medicare Part B Cover?

Part B covers drugs only when a qualified provider administers them as part of a covered medical service, not when a patient fills a prescription independently. Setting and administration method determine eligibility, not the drug name. Part B pays for injections and infusions given in a doctor's office or hospital outpatient department and also covers specific oral drugs where an injectable equivalent exists, including oral cancer drugs under the 2010 Medicare Oral Chemotherapy Act.

Part B drug coverage applies in five specific clinical categories where a provider must administer the drug or it's directly tied to a covered service.

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    Chemotherapy and Anti-Cancer Infusions

    Part B covers intravenous chemotherapy and certain oral cancer drugs when the oral form has an intravenous equivalent also covered by Part B. These drugs are administered in hospital outpatient departments, oncology offices or infusion centers. The standard 20% coinsurance applies after the $283 annual deductible, with no cap on total exposure.

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    Vaccines and Preventive Injections

    Part B covers specific vaccines directly, including the flu shot, pneumococcal vaccine and hepatitis B vaccine for at-risk beneficiaries, all at no cost sharing when administered by a Medicare-participating provider. COVID-19 vaccines are also covered under Part B at no cost. Vaccines not listed here may fall under Part D instead.

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    Injectable Drugs Given During a Covered Visit

    Part B covers injectable drugs such as certain biologics, osteoporosis drugs for homebound patients and antigens prepared by a physician when given during a covered medical visit. The drug must be used as part of a covered service, not prescribed for home use.

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    Drugs Used With Durable Medical Equipment

    Part B covers drugs administered directly through Medicare-covered durable medical equipment, including nebulizer solutions for COPD and insulin used with an insulin pump. The equipment must be Medicare-approved and the drug must be medically necessary for use with that specific device.

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    End-Stage Renal Disease (ESRD) Drugs

    Part B covers certain oral and IV drugs for beneficiaries with end-stage renal disease, including erythropoiesis-stimulating agents and IV iron. Coverage applies when administered at a Medicare-certified dialysis facility. These drugs are outside the standard Part D formulary structure.

Disclaimer: Part B drug coverage requires that services be performed by a Medicare-participating provider. Coverage rules vary by drug category. Beneficiaries should confirm billing before treatment.

Which Drugs Does Medicare Part D Cover?

Medicare Part D covers the broad range of outpatient prescription drugs that beneficiaries self-administer at home, purchased through a retail, mail-order or specialty pharmacy. Every Part D plan uses a formulary, a tiered list of covered drugs, which determines both whether a drug is covered and what the beneficiary pays. 
In 2026, Part D plans must cover at least two drugs in each therapeutic category and all drugs in six protected classes: antidepressants, antipsychotics, anticonvulsants, immunosuppressants, antiretrovirals and antineoplastics. 
Part D covers self-administered drugs in five broad categories, all dispensed through a licensed pharmacy rather than administered by a provider.

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    Tier 1 and Tier 2 Generics and Preferred Brand Drugs

    Generic drugs land on Tier 1 in most Part D plans, with copays of $0 to $10 per fill. Preferred brand drugs are on Tier 2 at moderate copays. Together, these tiers cover most commonly prescribed medications for chronic conditions including hypertension, diabetes and high cholesterol.

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    Non-Preferred Brand and Specialty Drugs

    Higher formulary tiers bring higher cost sharing, sometimes above $100 per fill before the $2,100 out-of-pocket threshold is reached. Biologics for rheumatoid arthritis and MS are on Tier 4 or Tier 5, subject to prior authorization requirements.

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    Protected Class Drugs

    CMS requires every Part D plan to cover all or substantially all drugs in six protected classes: antidepressants, antipsychotics, anticonvulsants, immunosuppressants for organ transplant, antiretrovirals and antineoplastics. When a specific drug is off a plan's formulary, an exception process must still make it accessible, protecting beneficiaries whose treatment depends on a particular medication.

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    Mail-Order and 90-Day Supplies

    Lower cost sharing is available for drugs dispensed through preferred mail-order pharmacies in 90-day supplies. Beneficiaries on stable long-term medications for hypothyroidism, blood pressure or similar conditions often save by moving fills to mail-order. Check the plan's preferred pharmacy network before enrolling.

Disclaimer: Part D formularies change annually. A drug covered in 2026 may not be covered at the same tier in 2027. Review your plan's Annual Notice of Change each fall during the Annual Enrollment Period.

What Part B Covers That Part D Cannot and Vice Versa

The drug delivery split between Medicare Part B and Part D is not a choice between two equivalent options. Each part covers a category of drugs the other cannot reach and no amount of supplemental coverage changes which part applies to a specific drug.

  • Part B exclusively covers drugs given by IV infusion or injection at a clinic, including chemotherapy, biologics and ESRD medications administered at a dialysis facility.
  • Part D exclusively covers self-administered drugs dispensed at a retail or mail-order pharmacy, including all oral maintenance medications for chronic conditions.
  • A drug given as an IV infusion at a clinic and the same drug dispensed as an oral tablet at a pharmacy can bill to different parts depending solely on the administration method.

Pros and Cons of Medicare Part B and Part D Drug Coverage

Part B drug coverage and Part D drug coverage serve fundamentally different clinical needs, which shapes their financial structure. Part B carries no formulary barriers but no spending cap. Part D has formulary restrictions and prior authorization requirements but provides a defined cost ceiling once annual out-of-pocket spending reaches $2,100 in 2026.

Pros/Cons
Part B Drug Coverage
Part D Drug Coverage

Pros

  • No formulary: coverage is determined by medical necessity, not a plan-specific drug list
  • Covers high-cost infused biologics and chemotherapy drugs that no pharmacy plan would dispense
  • Automatic access for beneficiaries already enrolled in Part B with no separate plan enrollment required
  • Vaccines including flu, pneumococcal and COVID-19 covered at no cost sharing from any participating provider
  • Catastrophic coverage threshold eliminates all cost sharing once out-of-pocket drug spending reaches $2,100 in 2026
  • Covers the full range of self-administered medications for chronic and acute conditions that Part B does not touch
  • Mail-order options allow 90-day supplies at lower cost sharing through preferred pharmacy networks
  • Extra Help (Low-Income Subsidy) available for qualifying beneficiaries, reducing or eliminating premiums, deductibles and copays

Cons

  • 20% coinsurance with no annual out-of-pocket cap, meaning a year of infusion therapy can generate tens of thousands in cost sharing without a Medigap plan
  • Coverage limited to drugs administered in a clinical setting, no coverage for self-administered pharmacy drugs
  • No protection against drug price increases; beneficiaries pay 20% of whatever Medicare approves, regardless of cost
  • Prior authorization still applies for many infused drugs and denials require an appeal process
  • Formulary restrictions: a drug not on the plan's list requires an exception request, which may be denied
  • Maximum 2026 deductible of $615 applies before the plan begins sharing costs
  • Separate enrollment and a monthly premium required on top of the Part B premium already owed
  • Permanent late enrollment penalty of 1% of the $38.99 base premium per uncovered month if enrollment is delayed beyond 63 days without creditable coverage

How Much Do Medicare Part B and Part D Drug Coverage Cost in 2026?

Part B and Part D drug costs aren't directly comparable because the payment mechanisms are different. Part B drug costs fall inside the Part B benefit structure: 20% coinsurance, no ceiling. Part D costs are plan-specific, but the 2026 structure sets a universal $2,100 out-of-pocket ceiling, after which catastrophic coverage eliminates further cost sharing for the rest of the year. The more intensive the drug regimen, the more that ceiling matters.

Part B annual deductible

$283 per year (shared with all Part B services)

Part B drug and non-drug services
Part B drug coinsurance
20% of Medicare-approved amount after deductible, no annual cap
All Part B-covered drugs
Part B monthly premium

$202.90 standard and $284.10 to $689.90 with IRMAA

Part B enrollment
Part D maximum annual deductible

$615 (plan-specific, some plans have $0)

Part D drug costs
Part D initial coverage coinsurance
25% of drug cost after deductible until $2,100 out-of-pocket threshold
Covered formulary drugs
Part D catastrophic coverage
$0 cost sharing for covered drugs after $2,100 out-of-pocket spending
All covered formulary drugs
Part D base national premium
$38.99/month (used to calculate late enrollment penalty)
Part D enrollment
Part D late enrollment penalty

1% of $38.99 per uncovered month, permanent, 12 uncovered months = approx. $4.68/month added

Beneficiaries who delayed enrollment
Part D annual out-of-pocket cap
$2,100 (after which catastrophic coverage applies for the rest of the calendar year)
All Part D enrollees

Specialty infusion drugs change the math. A year of a high-cost Part B-covered infusion can generate $10,000 or more in 20% coinsurance with no ceiling. A pharmacy drug with equivalent cost would hit the $2,100 catastrophic threshold and stop there. Medicare Supplement Plan G pays Part B coinsurance in full, closing the exposure gap for beneficiaries whose treatment is delivered in a clinical setting.

Note: All 2026 figures are from CMS (cms.gov) and medicare.gov. Part D plan premiums vary; the $38.99 base premium applies to penalty calculations only. IRMAA thresholds apply to Part B beneficiaries with modified adjusted gross income above $109,000 (individual) or $218,000 (married filing jointly), based on 2024 tax returns.

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PART B DRUG COVERAGE HAS NO OUT-OF-POCKET CAP

Unlike Part D, which provides catastrophic coverage after $2,100 in out-of-pocket spending in 2026, Part B drug coverage carries no annual spending ceiling. Beneficiaries receiving infusion chemotherapy or biological drugs through Part B pay 20% of the Medicare-approved cost indefinitely. Medicare Supplement plans are the only mechanism that caps your financial exposure within Original Medicare.

How and When Do You Enroll in Medicare Part B and Part D?

Part B drug access is automatic the moment a beneficiary enrolls in Part B, with no separate application. Part D requires a distinct enrollment decision with a hard deadline. Most beneficiaries at 65 qualify for both, but the penalty structures are different and accumulate independently from the first day of missed eligibility.

People under 65 qualifying through SSDI become eligible after a 24-month waiting period. ALS recipients qualify immediately. ESRD beneficiaries qualify at any age. Low-income enrollees may access Extra Help, which eliminates the Part D penalty entirely.

  1. 1
    Enroll in Part B During Your Initial Enrollment Period

    The Initial Enrollment Period spans the seven months centered on your 65th birthday month. Enrolling in the first three months means Part B coverage starts on the first of your birthday month. Delaying beyond that window without qualifying employer coverage permanently adds 10% to the $202.90 standard monthly premium for each full year of delay.

  2. 2
    Enroll in Part D Within 63 Days of Becoming Eligible

    A gap of 63 or more consecutive days without Part D or creditable drug coverage triggers a permanent penalty of 1% of the $38.99 national base premium per uncovered month. Unlike Part B, which requires a full 12-month period to generate one penalty increment, Part D only needs 63 days.

  3. 3
    Verify Your Existing Drug Coverage Is Creditable Before Delaying

    Employer, union, VA and TRICARE drug coverage that meets Medicare's minimum standard qualifies as creditable and allows penalty-free Part D delay for as long as it remains active. Your insurer is required by CMS to send an annual creditable coverage notice confirming status. Keep that document because Medicare will request it if a penalty dispute arises when you later enroll.

  4. 4
    Review Your Part D Plan Every Fall Before the Annual Enrollment Period Closes

    Medicare's Annual Enrollment Period runs from October 15 through December 7. Part D plan formularies, deductibles and tier placements change annually and a drug on Tier 2 in 2026 may shift to Tier 4 in 2027 under the same plan. Your plan's Annual Notice of Change, mailed each September, shows every cost and coverage change before the AEP opens.

  5. 5
    Evaluate Medicare Advantage as a Bundled Alternative

    Medicare Advantage plans (Part C) bundle Part B benefits and Part D drug coverage into one private plan with a single in-network out-of-pocket maximum of $9,250 in 2026. Enrollment requires active Part A and Part B. Beneficiaries who prefer one plan with a predictable drug benefit and an annual spending ceiling often find this structure more financially manageable than carrying separate Part B and Part D.

Do You Need Both Medicare Part B and Part D?

Filling prescriptions at a pharmacy requires Part D. Part B coverage stops at the clinic and doesn't extend to anything dispensed at a pharmacy counter. The one exception is active creditable drug coverage through an employer, VA or TRICARE, which loses its status as a valid delay reason within 63 days of lapsing.

Medicare Part D vs. Part B: Bottom Line

Part B's 20% coinsurance on clinical drugs has no annual cap. Part D's $2,100 catastrophic threshold eliminates pharmacy drug cost sharing entirely after that point in 2026. Skipping Part D triggers a permanent penalty of 1% of the $38.99 base premium per uncovered month, compounding without limit.

Both parts together are what cover the full spectrum of drug delivery methods without open-ended exposure.

FAQ: Medicare Part B or Part D

About Mark Fitzpatrick

Mark Fitzpatrick, Licensed P&C Insurance Expert, MoneyGeek

Mark Fitzpatrick, a licensed Property and Casualty (P&C) Insurance Producer in Connecticut, is MoneyGeek's resident insurance expert. He has spent nearly a decade analyzing the market, first at LendingTree and now at MoneyGeek, where he produces original research on hundreds of carriers and millions of rates across auto, home, renters, health and life insurance.

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