There are several options available for people who are eligible for Medicare benefits, including Medicare Supplement (Medigap) Plans. Original Medicare provides benefits, while Medigap Plans, including Medigap Plan D, offer other “supplemental” benefits.

Medicare Supplement Plans are not the same as Original Medicare or Medicare Advantage. Understanding what Medigap is and what it covers is important before choosing to enroll in Medigap Plan D.

What is Medicare Part D?

Medicare Part D is the Medicare prescription drug program (not to be confused with Medicare Supplement Plan D). Prescription drug coverage is offered separately from Original Medicare.

People who have Original Medicare usually have Part A and Part B coverage. Part A, “hospital insurance,” provides coverage for in-patient hospital stays, home health care, hospice care and skilled nursing facility care. Medicare Part B covers visits to a doctor or other healthcare providers, outpatient facility care, preventive services, home health care and durable medical equipment.

Medicare Part D helps to cover the cost of many prescription drugs, including the cost of several preventive vaccines. Medicare recommends prescription drug coverage, and indicates that even if you do not take prescription drugs now, you will likely need them sometime in the future.

Medicare beneficiaries who do not sign up for a Medicare Part D plan when they are first eligible for Medicare, who do not have creditable prescription drug coverage from their employer or union, or who do not have Medicare Extra Help, are likely to pay a late enrollment penalty when they sign up at a later date.

Medicare beneficiaries get prescription drug coverage through a Medicare Part D plan, or through a Medicare Part C Plan, called a Medicare Advantage Plan.

What is Medicare Supplement (Medigap) Plan D?

Medigap Plan D is one of several Medicare Supplement plans. Signing up for a Medigap Plan is optional, and requires that you sign up through a private insurance company.

Medigap fills in the “gaps” in Original Medicare, and covers services such as deductibles, coinsurance and copayments. The primary things you should know about Medigap insurance are:

  • You must have Original Medicare Part A and Part B coverage
  • A Medigap policy covers only one person
  • Medigap is different from Medicare Advantage Plans or Medicare Part C
  • You can buy a Medigap policy from a licensed insurance agent who is licensed to sell Medigap policies in your state
  • You pay a monthly premium for a Medigap Plan
  • A standardized Medigap Plan is guaranteed renewable even if you develop healthcare issues
  • It is illegal for anyone to sell you a Medigap Plan if you have a Medicare Advantage Plan
  • Medigap policies sold after January 1, 2006 cannot include prescription drug coverage

What Does Medigap Plan D Cover?

Medigap Plan D provides more coverage than some other Medigap plans. It may not be the ideal plan for everyone searching for a Medicare Supplement Plan. The plan covers some out-of-pocket costs that are not covered by Original Medicare.

Some coverage provided by Medigap Plan D includes:

  • Medicare Part A hospital coinsurance and hospital costs up to an additional 365 days after your Medicare benefits are used up
  • Medicare Part B copayment or coinsurance costs
  • Part A deductible
  • Skilled nursing facility care coinsurance
  • First three pints of blood
  • Part A hospice care copayment or coinsurance

The plan also covers 80% of foreign travel emergency care, up to the plan limits, when you travel outside the U.S. and need emergency care.

What Does Medigap Plan D Not Cover?

Medicare Supplement Plan D offers coverage for some out-of-pocket costs, but does not cover everything. Some things that it does not cover include the following:

  • Medicare Part B deductible coverage
  • Long-term care coverage
  • Prescription drug coverage
  • Routine vision care
  • Dental care
  • Private duty nursing care

Medigap Plan D supplement plans also do not cover Medicare Part B excess charges.

How Much Does Medigap Plan D Cost?

Medicare beneficiaries who have both Medicare Part A and Medicare Part B are allowed to purchase Medigap plans from private insurance companies who offer Medigap plans. Insurance companies must follow the guidelines set by the federal government when they offer Medigap plans.

Insurance companies set their prices, which means that the price you pay if you purchase a Medigap Plan D policy from an insurance company in Texas, you may pay a different price than someone who purchases a Medigap Plan D policy in Florida. Insurance companies in the same state may vary in their Medigap Plan D costs. Medicare indicates that the cost of a Medigap Plan may vary widely, and that there may be large differences in premiums from one insurance company to another insurance company.

It is wise to shop around for the best plan prices when considering the purchase of a Medigap Plan D policy. Some factors that may affect cost in addition to where you live include your age and lifestyle factors such as whether you smoke.

Medigap plans are less expensive when you enroll during the annual open enrollment period. The open enrollment period occurs when you turn 65 years of age and enroll in Medicare Part B. The open enrollment period lasts for six months.

Other factors that may affect the cost of your Medigap Plan D costs, including whether the insurance company offers discounts for certain people, such as non-smokers, women, if you make automatic payments, or for married couples.

Remember that the best time to enroll in Medigap Plan D is when you are first eligible in order to get better prices for your policy.

Sources:

  1. What Medicare Part D Drugs Plans Cover, Medicare.
  2. What’s Medicare Supplement Insurance (Medigap)?, Medicare.
  3. Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare, Medicare.
  4. Costs of Medigap Policies, Medicare.