Does Medicaid Cover the Costs of Prescription Drugs?

Eligibility Team
Researcher & Writer
February 06, 2016

Prescription drug coverage is one of the optional benefits that individual states may choose to provide to their Medicaid recipients. Currently, all the states offer outpatient prescription drug coverage. So the simple answer is yes, Medicaid does cover the costs of prescription drugs. However, this doesn’t mean all prescriptions are completely covered.

Each state can choose which medications they are willing to cover and which prescriptions they will not cover. They can also set rules regarding prescription co-payments or shared costs. However, there are limits placed on how much the state can make the patient pay for prescriptions covered by healthcare benefits.

First, the individual states can decide which prescriptions to include on their preferred list and which ones to include on their non-preferred list. Generally speaking, if there is a generic version of an otherwise very expensive medication, the generic version will be on the preferred list while the more expensive one will be on the non-preferred list.

Once a state has their list of preferred and non-preferred drugs, they are allowed to charge a co-payment of up to 20% of the non-preferred prescription cost for recipients with an income higher than 150% FPL. Even paying only 20% can get very expensive, so many request the generic versions in order to ensure little to no out-of-pocket expenses.

Some states, such as California, simply provide an approved list of prescriptions. Instead of charging varying co-payments to discourage the use of more expensive drugs, they simply won’t cover them. In that situation, a patient with a prescription for a drug not on the approved list will have to either pay for the drug out-of-pocket, ask their doctor for a generic alternative, or have the pharmacist submit a special request on their behalf.

If there is a clear medical reason why you need a specific drug that is not on the approved list, and that drug is essential to you staying healthy or recovering from an illness, you may be granted special approval. While that particular drug still won’t be added to the approved list for everyone, it will be covered for you while you need it.

Older patients that are eligible for both Medicaid and Medicare may apply for a Medicare Part D plan to cover the cost of their prescriptions. Some states require that patients who are eligible for Medicare to apply for Part D coverage regardless of what other coverage they have. 

Eligibility Team
Written by
Eligibility Team
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