Medicare Supplement Plan D Coverage and Costs
Before we get started, it’s important to note that Medicare Part D and Medicare Supplement Plan D are completely different types of coverage. Medicare Part D plans provide prescription drug coverage. Medicare Supplement Plan D, however, is one of ten different types of Medicare Supplement plans available in most states. (Massachusetts, Minnesota, and Wisconsin offer different types of Medicare Supplements, and therefore don’t have a Plan D offering.)
Medicare Supplement plans—which are also commonly called Medigap plans—sit on top of your Original Medicare coverage and help cover the 20% of costs not covered by Original Medicare. The most common Medigap plans are Plans F, G, and N. Only about 1% of Medigap policyholders choose to enroll in Plan D.
While Plan D coverage isn’t too different from Plans G and N, Plan D premiums are often much higher, resulting in less bang for your buck. Why? Generally, Medigap plans are not available for Medicare beneficiaries under 65. In some states, however, those on Medicare before age 65, due to having ESRD or a disability, can enroll in a Medigap plan. Insurance companies that offer Medigap plans are required to offer at least one type of Medigap plan to these individuals, and many insurance carriers choose Plan D. As a result, Plan Ds often have higher premiums and don’t provide the same value as Plans F, G, and N.
Key Takeaways from this Article:
Medicare Part D and Medicare Supplement Plan D are completely different coverage types.
Medigap Plans F, G, and N are the most common Medigap plans.
Only about 1% of Medigap plan holders choose Medigap Plan D because they generally don’t provide the best value.
The right Medigap plan depends on your unique situation. We recommend speaking with one of our licensed Medicare Advisors to understand all of your Medicare options and make the best, informed decision for your needs.
In this article, we’ll first explain the ins and outs of Medicare Supplement plans. If you’re already familiar with how Medicare Supplement plans works, skip to the second half of this article to learn more about the specifics of Plan D!
What are Medicare Supplement plans?
As mentioned in the introduction, Medicare Supplement plans are also commonly called Medigap plans—we use these two terms interchangeably. Medicare Supplement plans supplement your Original Medicare coverage to limit your out-of-pocket costs. In the case of Medicare Supplement Plan G, for example, your out-of-pocket costs are limited to your annual Part B deductible, which is $240 in 2024.
Benefits of Medicare Supplement plans
The primary purpose of Medigap plans is to limit your out-of-pocket costs, and they do that incredibly well. Oftentimes, Medigap plans are compared to Medicare Advantage plans because most Medicare beneficiaries choose either:
Original Medicare + Medigap
Medicare Advantage
Compared to Medicare Advantage plans, Medigap plans have the following key benefits.
Standardization
Every Medigap plan of the same type (e.g., all Plan Ds) are identical in coverage even if the pricing is different. There are several factors that go into pricing which we dive into later. The standardization makes choosing the right plan easier though!
No restrictive provider networks
Original Medicare and Medicare Supplement plans allow you to see any doctor who accepts Medicare, which is about 90% of doctors nationwide. This is especially important for people who travel a lot and need coverage in more than one state.
No need for prior authorization
One of the most common complaints about Medicare Advantage plans is that they often require prior authorization for covered services. Prior authorization denials also occur even when covered individuals do need the treatment. With Original Medicare + Medigap, you don’t need to worry about prior authorization for covered services.
Eligibility for Medicare Supplement plans
Medicare beneficiaries enrolled in both Part A and Part B who are not enrolled in a Medicare Advantage plan are eligible to enroll in Medigap plans. When you enroll matters, though! The best time to enroll is during your Medigap Open Enrollment Period, which lasts for six months after your Medicare Part B coverage starts. Outside of this period and a handful of other guaranteed issue periods, insurance companies can ask you questions about your health history and deny your Medigap application.
As we mentioned in the introduction, beneficiaries on Medicare due to having a disability (rather than age) are generally unable to enroll in Medigap plans. In some states, insurance carriers are required to offer one type of Medigap plan to Medicare beneficiaries under 65 years old, and the common choice is Plan D. If you enroll in a Plan D while under 65, you can switch to any other Medigap plan when you turn 65. If you have questions about if this is the right choice for you or when you can change Medigap plans, give us a call at (855) 900-2427 for free, personalized advice!
Comparing Medicare Supplement plans
There are ten types of Medicare Supplement plans, each covering a different set of out-of-pocket costs. Consult this chart to see the differences.
If you want help understanding the differences, our licensed Medicare Advisors are here to help! Schedule a free consultation to ask questions about Medicare and Medigap or give us a call at (855) 900-2427 to receive personalized advice.
Medicare Supplement Plan D coverage
About 1% of Medicare Supplement enrollees are enrolled in Medigap Plan D. It’s a low percentage, and that’s because most people who choose Medigap enroll in either Plan F or Plan G. Why? Simply put, Plan F and Plan G provide more value. Medigap Plan N is another popular option. While Plan D coverage is similar to Plan N, it’s not as popular because the premiums are often higher.
Important note: Massachusetts, Minnesota, and Wisconsin offer a different set of standardized Medigap plans and therefore do not offer a Medigap Plan D.
What’s covered under Medigap Plan D?
Medigap Plan D pays for:
Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up
Part B coinsurance and copayments
Blood you receive (up to 3 pints)
Part A hospice care coinsurance and copayments
Skilled nursing facility care coinsurance
Your Part A deductible
Plan D also covers 80% of foreign travel exchange.
What’s not covered?
Plan D, like all Medigap plans, provides coverage for out-of-pocket costs leftover by Original Medicare. It does not provide coverage for additional healthcare services. Medigap Plan D also does not cover the Part B deductible and Part B excess charges.
Medicare Supplement Plan D costs
Many people choose Medicare Supplement plans because they get better coverage and have better financial predictability. With plan D, your out-of-pocket costs are limited. You’ll pay:
Original Medicare premiums
A monthly Medigap Plan D premium
Your Part B deductible
Medicare Plan D premiums
There are a handful of factors that may impact your Plan D premium:
Where you live
Your smoking status
Your age
Your gender
The insurance carrier
Household discounts (offered by some Medigap plans)
Will my Medicare Supplement premium change over time?
Medicare Supplement premiums have different pricing structures or “ratings,” which can impact how much you pay and if your premiums will change as you age.
Community-rated (aka no-age-rated): The premium you pay is the same as everyone else with the same policy, regardless of age.
Issue-age-rated (aka entry age-rated): The premium you pay is based on the age you were when you first enrolled in your Medigap policy.
Attained-age-rated: The premium you pay is based on the age you currently are (the age you’ve “attained”).
Medicare Plan D deductibles
There is no Plan D deductible. If you’re enrolled in a Medigap Plan D, your overall deductibles are reduced. Your plan will pay your Part A deductible, but you will still be responsible for the Part B deductible ($240 in 2024).
Medicare Plan D out-of-pocket costs and maximums
Medigap Plan D doesn’t have an out-of-pocket limit because the only out-of-pocket costs you’ll incur for covered services are:
Your Part B deductible
Part B excess charges
How to enroll in a Medicare Supplement Plan D
Our Medicare Advisors are here to help compare plans and submit your application. The best time to enroll is during your Medigap Open Enrollment Period, which occurs during the first six months that you have Part B coverage. During this period, you have a guaranteed issue right. This means that insurance companies cannot ask you questions about your health history, and you are guaranteed acceptance into any Medigap plan.
Outside of this time and a few other guaranteed issue periods, insurance companies can ask you questions about your health history and your application may be denied.
How to choose the right Plan D
Every Medigap Plan D has identical coverage. This means that, if you’ve decided on a Plan D, you can focus on premiums and insurance carrier service. Our Medicare Advisors are here to help you pick the best Medicare coverage for your unique set of needs. We’ll help you understand your options, give you insight into different insurance carriers’ customer service reputations, and compare premiums.
Get started: schedule a free consultation or call us at (855) 900-2427!