Prescription Drugs and Medicaid Coverage

In this article...
  • Medicaid does pay for prescription drugs, but the program is somewhat different in every state. Find out how Medicaid drug coverage works and what’s covered.
Woman gets help at pharmacy

In 2020, more than 71 million people are enrolled in Medicaid, the low-income health insurance program administered by individual states. This program assists with the cost of basic healthcare, and it provides prescription drug coverage for all qualified enrollees. The details of this coverage are somewhat different in each state, but the program is generally available to all categorically eligible Medicaid participants.

Does Medicaid Pay for Prescription Drugs?

The short answer is yes, but it’s different in every state. Medicaid is a joint federal-state program that offers free or steeply discounted medical insurance for citizens with low incomes or disabilities, as well as for older citizens in some states. Prescription drugs are part of that coverage, though certain limitations apply in most states. Technically, prescription drug coverage is optional, and each state has the power to choose whether it offers a drug option or not, but all 50 states do include some prescription coverage as part of their basic Medicaid plans.

What Part of Medicaid Pays for Prescription Drugs?

Medicaid offers prescription drug coverage as part of its regular coverage for eligible beneficiaries. Unlike Medicare, which splits its coverage levels into different parts, such as Part D drug coverage, Medicaid folds medication costs into its overall coverage of enrollees’ medical needs.

Does Medicaid Cover Brand Name Drugs?

Details vary between states, but as a rule, Medicaid can pay for brand name drugs if there is no other choice. Medicaid programs in every state prefer to pay for generic drugs first, if they are available. These drugs are chemically identical to the brand name varieties, and so it is rarely necessary to pay for more expensive branded drugs.

Exceptions can be made as needed, however. Sometimes a drug is new enough that no generic version is available. In this case, Medicaid prefers to pay for an alternative generic medicine that your doctor believes will have the same effect. If no alternative exists, or if your doctor feels the brand name drug is needed for medical reasons, then Medicaid generally approves the expense.

What’s the Difference Between Medicaid and Medicare Drug Coverage?

Medicare and Medicaid are separate systems, with different administrations and different relationships between the state and federal levels. Unlike Medicaid, Medicare separates its drug coverage into a dedicated plan component called Part D. Except for drugs administered in the hospital, doctors’ office or ambulance, virtually all Medicare-covered drugs are included under Part D.

Medicare beneficiaries may opt into or out of Part D coverage. Many Medicare enrollees have their Part D benefit included as part of their Medicare Advantage plan, which is sometimes called Part C. Alternatively, Medicare beneficiaries can stick with Original Medicare and choose a Part D plan with terms that fit their needs.

Medicaid organizes its drug coverage differently. Drug benefits under Medicaid are included as part of the general care package, without being split into a separate part, and fee schedules are updated annually. At the pharmacy, Medicaid beneficiaries are usually able to present their membership card at the counter like any other insurance card. This is unlike Medicare Part D, which often has a separate card for benefits.

What Other Medical Expenses are Covered by Medicaid?

Medicaid benefits are meant to pay for the basic healthcare needs of all qualified recipients. Apart from prescription drug coverage, Medicaid in all states pays some or all of the cost of emergency care, routine preventive care and overnight stays in the hospital. A co-payment or share of cost obligation may be required for beneficiaries who use these services. Medicaid programs across the country also typically pay for vaccinations, especially annual flu shots, non-emergency transportation and needed medical appliances. This includes many mobility devices and support garments, as well as home health equipment or supplies, such as oxygen.

Details of what’s covered vary somewhat between states, so always talk to your doctor about medication and medical devices that affect your health, as well as about Medicaid cost structure for the things you need. Be aware that the law prohibits private billing of Medicaid recipients, so if you have Medicaid, you should not get a bill from medical providers. If this does occur, contact your provider or Medicaid worker as soon as possible.