Lung cancer is the leading cause of cancer death in the United States, and the great majority of new diagnoses occur in people over 65—right in the heart of the Medicare population. A lung cancer diagnosis sets off a long sequence of care: screening, biopsy, staging scans, surgery or radiation, and increasingly, months or years of immunotherapy and targeted drugs. Each stage touches a different part of Medicare with very different cost-sharing. This guide maps the whole path so you know what Medicare pays, where your out-of-pocket exposure is largest, and how supplemental coverage protects you from open-ended bills.

Screening: Low-Dose CT Is Free for Those Who Qualify

Medicare covers an annual low-dose CT (LDCT) lung cancer screening at no cost—no deductible, no coinsurance—when you meet all of the eligibility criteria:

  • Age 50–77
  • A 20 pack-year smoking history (one pack a day for 20 years, two packs a day for 10 years, and so on)
  • Either a current smoker or someone who quit within the last 15 years
  • No signs or symptoms of lung cancer (this is a screening, not a diagnostic test)
  • A counseling and shared decision-making visit with your provider before the first scan

That counseling visit is also covered, and it is a genuine requirement—not a formality. If you qualify, this is one of the most valuable free benefits in Medicare, because lung cancer caught at an early, localized stage is far more survivable than cancer found after symptoms appear.

The free benefit applies only while the scan is billed as screening. The moment a nodule is found and imaging shifts to diagnostic follow-up, cost-sharing begins.

Diagnostic Workup and Staging Under Part B

Once a nodule needs investigation, services move to diagnostic status under Part B at 80 percent after the $257 deductible (2026), leaving you 20 percent coinsurance:

  • Diagnostic chest CT, PET-CT, and brain MRI for staging — 20 percent coinsurance
  • Biopsy — CT-guided needle biopsy, bronchoscopy with biopsy, or endobronchial ultrasound (EBUS) — 20 percent coinsurance
  • Molecular and biomarker testing — this is critical for modern lung cancer. Testing the tumor for EGFR, ALK, ROS1, BRAF, KRAS G12C, MET, RET, NTRK mutations and PD-L1 expression determines whether you are eligible for targeted therapy or immunotherapy. Medicare covers comprehensive genomic profiling (including approved next-generation sequencing panels) for advanced cancers under Part B.

Because there is no annual cap on Part B coinsurance, a heavy staging workup can already generate meaningful out-of-pocket cost before treatment even begins.

Surgery and Radiation

For early-stage non-small cell lung cancer, surgery (lobectomy, segmentectomy, or wedge resection, often performed minimally invasively or robotically) is frequently the primary treatment.

  • Inpatient surgery falls under Part A, subject to the $1,676 (2026) deductible per benefit period. Whether you are admitted as inpatient depends on the two-midnight rule—and your admission status also determines whether a later skilled nursing stay would be covered. See Medicare Part A coverage.
  • Surgeon and anesthesia fees are billed under Part B at 20 percent coinsurance.

Radiation therapy—including precise stereotactic body radiation therapy (SBRT) for patients who can’t have surgery, and conventional external-beam radiation—is covered under Part B at 20 percent coinsurance per session. A multi-week course accumulates real coinsurance with no cap.

The Big Cost Question: Infused vs. Oral Cancer Drugs

This is where lung cancer coverage gets financially decisive, and it follows the same rule that governs cancer drugs across Medicare: how the drug is administered determines which part of Medicare pays—and how much you owe. For the underlying logic, see Part B vs. Part D drugs.

Infused immunotherapy and chemotherapy → Part B (20%, no cap)

Drugs given by infusion in a clinic or hospital outpatient department fall under Part B, at 20 percent coinsurance with no annual out-of-pocket limit:

  • Immune checkpoint inhibitors (immunotherapy) — pembrolizumab (Keytruda), nivolumab (Opdivo), atezolizumab (Tecentriq), durvalumab (Imfinzi), cemiplimab (Libtayo). These are the backbone of modern lung cancer treatment and are often continued for up to two years.
  • Traditional infused chemotherapy — carboplatin, cisplatin, pemetrexed (Alimta), paclitaxel, and others.

A single Keytruda infusion has a list price in the range of $10,000+, so 20 percent coinsurance can be $2,000 or more per infusion. Repeated every three to six weeks for up to two years, the Part B coinsurance with no cap can run into the tens of thousands of dollars a year for someone with Original Medicare and no supplement.

Oral targeted therapy → Part D (capped at $2,000)

For patients whose tumors carry a targetable mutation, treatment is often a daily oral pill, which falls under Part D:

  • EGFR inhibitors — osimertinib (Tagrisso), erlotinib, afatinib
  • ALK inhibitors — alectinib (Alecensa), brigatinib (Alunbrig), lorlatinib (Lorbrena)
  • KRAS G12C inhibitors — sotorasib (Lumakras), adagrasib (Krazati)
  • ROS1, BRAF, MET, RET, NTRK targeted agents — crizotinib, dabrafenib/trametinib, capmatinib, selpercatinib, and others

These oral drugs carry retail prices of $15,000–$20,000 per month, but because they run through Part D, your out-of-pocket is capped at $2,000 for the year (2026) thanks to the Inflation Reduction Act. Once you hit that cap, the rest of the year’s fills cost you nothing. See Medicare Part D explained.

The counterintuitive result

A patient on an oral targeted pill may pay $2,000 for the entire year, while a patient on infused immunotherapy can face far more—because Part B has no cap. The difference isn’t the drug’s price; it’s the route of administration and which part of Medicare it falls under. This is the single most important financial fact in lung cancer coverage, and it is exactly why supplemental coverage matters so much.

Why Medigap Plan G Is the Decisive Protection

Because the largest exposure—infused immunotherapy and chemotherapy under Part B—has no annual cap, the most important financial decision a lung cancer patient with Original Medicare can make is carrying a Medigap (Medicare Supplement) policy.

Plan G pays essentially all of the 20 percent Part B coinsurance after you meet the small annual Part B deductible. For a patient on two years of Keytruda, that converts a potential $20,000–$40,000+ in coinsurance into little more than a predictable monthly premium. See Medigap plans compared and the real-dollar supplement vs. Advantage cost comparison.

The catch is timing: Medigap is only guaranteed-issue without medical underwriting during your one-time six-month open enrollment window at 65 (or certain special situations). A cancer diagnosis after that window can make a new Medigap policy expensive or unavailable in most states—which is why this decision should be made before illness strikes.

What About Medicare Advantage?

A Medicare Advantage plan caps your annual in-network out-of-pocket (the 2026 maximum is $9,250 for in-network services), which protects against the uncapped Part B exposure of Original Medicare without a supplement. But that protection comes with trade-offs that matter enormously in cancer care:

  • Prior authorization for scans, surgery, immunotherapy, and radiation—delays and denials are common in high-cost oncology
  • Networks—your preferred cancer center (especially an NCI-designated comprehensive cancer center) may be out of network
  • The out-of-pocket maximum still means paying up to ~$9,250 a year in-network, every year treatment continues

For patients who want a specific cancer center and the fewest barriers to fast-moving treatment, Original Medicare plus Plan G is often the stronger choice—if Medigap was secured in time.

Small Cell Lung Cancer and Advanced Disease

Small cell lung cancer (SCLC) is treated primarily with infused chemotherapy (carboplatin/etoposide) plus immunotherapy (atezolizumab or durvalumab) and radiation—so the same Part B, no-cap exposure applies. Brain MRI surveillance and prophylactic cranial irradiation are covered under Part B at 20 percent coinsurance.

For advanced or metastatic disease, supportive care is also covered: antiemetics, bone-modifying agents (zoledronic acid, denosumab) for bone metastases, palliative radiation, and palliative care consultations. When curative treatment ends, hospice care under Part A covers comfort-focused care, including drugs and equipment related to the terminal diagnosis. See Medicare cancer treatment coverage for the full supportive-care picture.

Help for Lower-Income Beneficiaries

The costs above assume no assistance. If your income and assets are limited:

  • Medicare Savings Programs can pay your Part B premium and, at the QMB level, your Part B coinsurance—erasing the 20 percent exposure on infused drugs. See Medicare Savings Programs.
  • Extra Help (Part D Low-Income Subsidy) dramatically reduces the cost of oral targeted drugs, bringing copays to a few dollars.
  • Manufacturer and foundation patient assistance programs help with both Part B and Part D drugs.

The Bottom Line

Medicare covers lung cancer comprehensively—from free LDCT screening through surgery, radiation, immunotherapy, and targeted drugs. But your out-of-pocket cost depends almost entirely on how your treatment is delivered:

  • Free — annual low-dose CT screening if you qualify
  • 20% with no cap — diagnostic scans, surgery fees, radiation, and infused immunotherapy/chemo under Part B (the largest exposure)
  • Capped at $2,000/year — oral targeted therapy under Part D

The single most important protective step is securing Medigap Plan G during your open enrollment window, before a diagnosis ever occurs—because it is the Part B no-cap exposure, not the Part D drugs, that creates catastrophic bills. For the broader picture of what these costs mean across a retirement, see healthcare costs in retirement.