A new $2,100 annual cap on out-of-pocket drug costs means Medicare cancer patients no longer face unlimited bills for oral chemotherapy in 2026. This guide explains how Part A, Part B, and Part D divide cancer coverage, including chemotherapy, radiation, and clinical trials, and what you'll actually owe.
How Medicare splits cancer treatment coverage
Cancer treatment rarely fits into a single category. A patient might receive IV chemotherapy at an outpatient clinic on Tuesday, take an oral drug at home every day, and have a follow-up scan in the same week. Medicare covers all of these, but the billing runs through different parts depending on the setting and the treatment type.
The dividing line is largely where you receive care. Inpatient treatment (hospital admission) runs through Part A. Outpatient treatment, including most chemotherapy and radiation given at a clinic or doctor's office, runs through Part B. Oral drugs you take at home go through Part D.
Part A: inpatient chemotherapy and radiation
When cancer treatment requires a hospital admission, Part A pays. This includes chemotherapy administered during an inpatient stay, inpatient radiation, and any other cancer-related care delivered while you're admitted as a hospital inpatient.
Under Part A, you pay the inpatient deductible of $1,736 per benefit period in 2026. Days 1 through 60 of a continuous inpatient stay carry no additional coinsurance after that deductible. From day 61 on, a daily coinsurance applies.
Most cancer chemotherapy is not delivered inpatient. The more common scenario is outpatient infusion, which runs through Part B instead.
Part B: outpatient chemotherapy and radiation
Part B covers chemotherapy you receive in a hospital outpatient department, your oncologist's office, or a freestanding infusion clinic. Per the CMS 2026 cost announcement, the cost structure is:
- Annual Part B deductible: $283 (paid once per year, not per treatment)
- Coinsurance: 20% of the Medicare-approved amount for each session
- Outpatient copayment cap: your total outpatient copayment will not exceed $1,736 in a benefit period, which is the same as the inpatient deductible
That cap is meaningful. A patient receiving frequent infusions could otherwise accumulate 20% coinsurance charges that add up significantly over the course of treatment. The cap limits how high that can go.
Part B also covers radiation therapy received in an outpatient setting under the same cost structure: 20% after the $283 deductible.
| Treatment | Setting | Part | Your cost |
|---|---|---|---|
| Chemotherapy | Inpatient hospital | Part A | $1,736 deductible per benefit period; $0 for days 1-60 |
| Chemotherapy | Outpatient (clinic or doctor's office) | Part B | 20% after $283 deductible; copay capped at $1,736 |
| Radiation therapy | Inpatient hospital | Part A | $1,736 deductible per benefit period; $0 for days 1-60 |
| Radiation therapy | Outpatient | Part B | 20% after $283 deductible |
| Oral chemo (also available IV) | Home | Part B | 20% after $283 deductible |
Part D and oral cancer drugs: the $2,100 cap
Oral anticancer drugs are where the biggest change for Medicare beneficiaries happened in recent years. Under the Inflation Reduction Act's Part D redesign, the annual out-of-pocket cap on covered Part D drugs is $2,100 in 2026, per CMS. Once your out-of-pocket spending reaches that amount for the year, you pay $0 for covered Part D drugs for the rest of the calendar year.
For cancer patients on expensive oral anticancer drugs, this is a substantial protection. Some targeted therapy drugs and oral chemotherapy agents carry list prices of several thousand dollars a month. Under the old Part D structure, patients could face crushing annual costs. Now, costs stop at $2,100.
One important distinction: oral chemotherapy drugs that are also available in an equivalent injectable or infusible form may be covered under Part B rather than Part D, at the same 20% coinsurance that applies to IV chemo. If your oral drug has an IV equivalent and you're on Original Medicare, your oncology team or pharmacist can confirm which part covers it, since Part B coverage often results in lower out-of-pocket costs than Part D depending on the specific drug and plan.
For oral drugs covered under Part D, the $2,100 annual cap applies. The Medicare Part D redesign guide goes into the full structure if you need it.
Clinical trials
If you're participating in a qualifying clinical trial, Medicare covers the routine costs of care, per the Medicare clinical research studies guidelines. Routine costs are the standard-of-care services you'd receive even if you weren't in a trial: your doctor visits, lab tests, hospital care, and supportive treatments.
What Medicare does not cover in a clinical trial: the experimental treatment itself, and any tests or drugs needed purely for research purposes (not for your medical care). The trial sponsor or the research institution typically covers those costs.
The key qualifier is that the trial must be a "qualifying" clinical trial that meets federal criteria. Your oncologist or the research coordinator can confirm whether a specific trial qualifies.
What Medicare Advantage plans cover
If you're on a Medicare Advantage plan rather than Original Medicare, the plan covers all the same cancer treatments (chemotherapy, radiation, oral drugs) because MA plans must cover everything Original Medicare covers. The difference is in the cost-sharing details, prior authorization requirements, and network.
MA plans typically have their own copayment structures for chemotherapy and radiation rather than the standard 20% coinsurance. Some plans have lower per-visit costs; others have higher total out-of-pocket limits. The federally capped MA out-of-pocket maximum for in-network services in 2026 is $9,250, though many plans set lower caps.
Prior authorization is more common in MA plans for cancer treatment, particularly for expensive drugs or newer therapies. This doesn't mean coverage will be denied, but it does mean your oncologist may need to go through an approval process before treatment starts. Ask the plan and your care team about this before treatment begins.
Planning for costs
Between Part B coinsurance and Part D drug costs, cancer treatment on Medicare involves real out-of-pocket exposure. A few things help.
If you have Original Medicare, a Medigap (Medicare Supplement) policy covers the 20% Part B coinsurance on chemotherapy and radiation, which can eliminate most of your outpatient treatment costs. The guide to what Medicare doesn't cover has more on how Medigap works.
If your income is limited, you may qualify for a Medicare Savings Program through your state's Medicaid agency, which can pay your Part B premium and in some cases your coinsurance. See the dual eligibility guide.
For Part D drug costs, the $2,100 annual cap applies to all beneficiaries regardless of income. If you reach it, you're done paying for covered drugs that year. If your drug costs are high early in the year, the Medicare Prescription Payment Plan (M3P) lets you spread your out-of-pocket payments across the calendar year in monthly installments rather than paying in full at the pharmacy.
Frequently asked questions
Part B covers most IV and injectable chemotherapy received in outpatient settings. Oral chemotherapy drugs that are also available in IV form can be covered under Part B. Other oral anticancer drugs are generally covered under Part D, where the $2,100 annual out-of-pocket cap applies.
After you've met your $283 annual Part B deductible, you owe 20% of the Medicare-approved amount for each outpatient chemotherapy session. Your total outpatient copayment is capped at $1,736 per benefit period, which is the same as the Part A inpatient deductible.
Yes. Most oral anticancer drugs are covered under Part D. The $2,100 annual out-of-pocket cap means you pay $0 once your covered drug costs reach that threshold for the year. Some oral chemotherapy drugs are covered under Part B instead, depending on whether an IV equivalent exists.
Yes. Outpatient radiation is covered under Part B at 20% coinsurance after the $283 deductible. Inpatient radiation is covered under Part A.
Medicare covers the routine care costs in qualifying clinical trials, such as standard lab tests, doctor visits, and hospital care. It does not cover the experimental drug or treatment itself, or tests that exist only for research purposes. Your oncologist can confirm whether your specific trial qualifies.
Yes. Medicare Part B covers a range of cancer screenings, such as mammograms and colorectal cancer screening, for eligible beneficiaries, and many preventive screenings are covered at no cost to you. Screening coverage is separate from treatment coverage; see the preventive services guide for the full list.
Learn More
- Medicare overview: Parts A, B, C, and D
- How Medicare Part D drug coverage works
- What Medicare doesn't cover
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