Medicare vaccine coverage (including how the COVID-19 vaccines are covered)

How does Medicare cover vaccines? Are the paid for by Medicare Part B or Part D? MedPAC’s June 2021 report provides a nice overview.

Medicare covers vaccines under Part B and Part D. Part B covers vaccines for influenza, pneumococcal disease, hepatitis B (for patients at high or intermediate risk), and coronavirus disease 2019 (COVID-19), as well as other vaccines when used to treat an injury or direct exposure to a disease. (For COVID-19 vaccine doses purchased directly by the federal government, Medicare is responsible for paying for the vaccine’s administration, not the vaccine itself.) Part D covers all commercially available preventive vaccines not covered by Part B, such as vaccines for shingles and hepatitis A. For Part B–covered preventive vaccines, patients face no cost sharing for the vaccine and its administration, while beneficiaries may face out-of-pocket costs for Part D–covered vaccines depending on the cost-sharing requirements of their plan.

Who cares if a vaccine is covered by Part B or D? Physicians and patients are concerned due to administrative issues and increased cost sharing.

At Part D’s implementation in 2006, physicians had two major concerns related to Part D coverage of vaccines: (1) Most physicians had no direct way to bill Part D plans for vaccines they purchased to provide to patients, and (2) if beneficiaries had to pay the full payment rate for vaccines up front and then seek reimbursement from their plans, the out-of-pocket cost might discourage them from receiving the vaccines.

MedPAC recommended moving all vaccines from Part D to Part B coverage, but recommended using 103% of wholesale acquisition cost (WAC) rather than average wholesale price (AWP). To find out why MedPAC is making this recommendation, do read the whole chapter.

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