Page Reviewed / Updated – July 14, 2022


Prescription drugs are a major component of the overall cost of caring for the elderly. By some reports, persons 65 and older spend an average of over 3% of their income on prescription drugs. That percentage is even higher when over-the-counter medications are included. While Medicare Part D pays for some medications for those enrolled in a plan, it is reported that over 65% of seniors’ prescription costs are out-of-pocket.

There are three ways by which seniors can better afford the cost of prescription drugs. The first is to make sure one understands their insurance’s prescription benefits, be that Medicare, Medicaid or Medicare supplementary insurance (Medigap). The second is to find financial assistance that helps pay for medication or for insurance premiums, co-pays and deductibles. Finally, the third and frequently overlooked option is to lower one’s costs through a variety of methods described further down this page.

Insurance Benefits


Medicare is a federal health insurance program for persons age 65 and older that is composed of multiple parts:

Prescription drugs are covered by Medicare Part D. Part D plans are sold by private insurance companies either as a standalone plan known as a Medicare Prescription Drug Plan (or PDPs) or as part of a Medicare Advantage Plan (or MAPDs), which groups Parts A, B and D coverage into a single plan. Medicare Part D’s contributions for 2022 are outlined in the table below.

Medicare Extra Help

Extra Help is a program that provides additional financial assistance to seniors with limited income and assets to help them pay for prescription drug costs. Seniors are eligible if their total assets (not including their primary residence, vehicle, and other personal items) are valued at less than $15,510 for individuals or $30,950 for married couples. The 2022 income limit is $20,385 for a single applicant and $27,465 for a married couple. Learn more about Extra Help or apply online.

Medicare Supplemental Plans

One cannot be concurrently enrolled in Medicare Part D and a Medicare Supplemental Insurance plan for prescription coverage. Supplemental plans are sold by private companies and have different coverage depending on the type of plan. Tracking those benefits is beyond the scope of this article.


Medicaid is a state-run health insurance program for low income and disabled individuals. The definition of “low income” changes by state and constituent group (meaning seniors, pregnant women, and healthy adults all have different eligibility criteria). In most states in 2022, an elderly individual must have a monthly income of less than $2,523, and assets, not including their home, valued at less than $2,000.

All 50 states’ and Washington DC’s Medicaid programs cover the majority of the cost of prescription drugs for participants. Program participants are usually required to make small co-payments (also referred to as “share of cost”) for their medications. Prescription co-payments range from as low as 50 cents per prescription to about $8. Some states have limitations on the number of brand name drug prescriptions they will cover per month or per year. This limit typically lies between 2-6 prescriptions per month. 

Read more about qualifying for Medicaid and Medicaid Prescription Drug benefits in your state.

Financial Assistance

State Based Programs

Medicare wraparound programs provide financial assistance to cover the cost of prescriptions not paid for by Medicare Part D.

In addition to the federal Extra Help program, many state governments provide seniors with financial assistance to help with the cost of medications. These programs provide assistance as Medicare Wraparound Programs. This means they help seniors pay the extra costs that their Medicare Part D plans don’t cover. Alternatively, they provide assistance making Medicare Part D premium payments instead of paying for the extra prescriptions costs.

Unfortunately, not every state offers assistance. A list of states that have programs is in the table below. Note that with the launch of the Affordable Care Act and the closing of the Donut Hole for brand name and generic drugs, more and more of these programs are being canceled.

State Assistance and Medicare Wraparound Programs 

Pharmaceutical Company Assistance

Patient Assistance Programs, or PAPs for short, are programs run by nearly all the major pharmaceutical companies. In these programs, assistance is offered to low income individuals by providing them with reduced cost or free medications. These programs are typically open to both individuals with insurance and those who do not have insurance. Although sometimes the pharmaceutical companies maintain two different programs for these two groups.

To participate in a PAP, applicants are usually required to show proof of income (usually a tax return will suffice), their doctor’s prescription for the required medication and documentation of any insurance coverage they have. Learn more about Patient Assistance Programs and find links to major pharmaceutical company programs here.

Eldercare Financial Assistance Locator

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Other Options to Lower Costs


Many pharmaceutical companies make discount coupons available online for their brand name drugs. Often these coupons will discount the cost of a brand name drug so that it equals the cost of the generic version. One can search for drug coupons by medication name here.

Most coupons can simply be printed from a webpage and brought to the pharmacist. Be wary of any website that asks you to pay to receive the discount coupon and any websites that request excessive personal information to provide you with the discount coupon.

Drug Discount Cards, a non-profit organization, offers a free Prescription Drug Discount Card, which can save up to 80% off the cost of prescription medications. The card is accepted at most major pharmacies including Walgreens, CVS, Walmart, and RiteAid. Learn about how prescription drug discount cards work.

Tax Deductions

Some out-of-pocket costs for prescription drugs are considered tax deductible under the Medical and Dental Expense Tax Deduction. In order to take this deduction, the total sum of your medical and dental expenses must be greater than 7.5% of your adjusted gross income.

Fortunately for seniors, the range of items and services that can be considered a medical or dental expense is quite broad. And because most seniors are living on fixed incomes, it is common for their expenses to exceed 7.5% of their adjusted gross income.

In addition to our analysis of the medical and dental expenses tax deduction, one can read the IRS’ webpage on the subject. It is worth noting that over-the-counter medications are not considered tax deductible.

Generic vs. Brand

Most individuals are able to lower their out-of-pocket costs by between 25%-75% by using a generic instead of a brand name drug.

When a pharmaceutical company releases a new drug, the U.S. Food and Drug Administration allows that company to have a patent on the drug for several years. As the patent expires, other pharmaceutical companies are allowed to copy the drug and sell generic versions of it. Generic versions are less expensive than brand name drugs for two reasons. 1) The manufacturers of generic versions do not shoulder the research and development costs and can therefore sell the drugs at a lower price. 2) The increased competition further drives the cost down.

There is an ongoing, and sometimes heated, debate about whether generic drugs are of lower quality. The final decision whether to use a brand name or generic drug should be up to the individual and their doctor. However, two things are certain: Generic drugs are pharmacologically the same as their brand name equivalents, and generic drugs are considerably less expensive for the consumer.

Retail vs. Mail Order / Online

The use of a mail order or online pharmacy can provide modest savings over a retail pharmacy. Often the cost of the medication is the same, but the insurance company allows an individual to receive a greater quantity of their medication if they use a mail order pharmacy. For example, an individual might have a $20 co-pay for a 30-day supply of a medication filled at a retail pharmacy. They may be able to receive a 90-day supply by using a mail order pharmacy for the same $20 co-pay.

In addition to the cost savings is the convenience of mail order. Aside from not having to travel to the pharmacy, most mail order pharmacies will call the individual to remind them when it is time to refill a prescription or when a new prescription is required. Some mail order pharmacies will even call the doctor on the individual’s behalf to request a new prescription for the same medication if the patient has used all of their refills.

We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact or 1-800-MEDICARE to get information on all of your options.