Everything to Know About Medigap Plan D

Everything to Know About Medigap Plan D

Medicare supplement insurance, also known as Medigap, is private insurance that helps fill the coverage gaps in Original Medicare, like co-payments, coinsurance and deductibles.

In most states, there are 10 standardized types of Medigap plans, designated by the letters A through D, F, G and K through N. While three states — Massachusetts, Minnesota and Wisconsin — have their own methods for standardizing Medigap insurance, all other states apply a uniform set of standards for each lettered plan.

Here, we'll explain the key features of Medigap Plan D.

What Is Medigap Plan D?

Medigap Plan D offers broad coverage for many of the gaps in Medicare, although it's not as comprehensive as some other Medigap options.

Medigap Plan D shouldn't be confused with Medicare Part D, which is an optional benefit for all Medicare enrollees that helps pay for prescription drugs.

Plan D, like other Medigap plans, is also distinct from Medicare Advantage policies, which are sold by private insurance companies. Medicare Advantage plans are an alternative way to receive Original Medicare coverage as well as some additional services it doesn't cover.

What Does Plan D Cover?

Like all Medicare supplement insurance, this supplemental policy pays your Medicare Part A coinsurance and your hospital expenses for up to an additional 365 days after Medicare stops covering those costs. In addition, the federal government website Medicare.gov lists the following coverage benefits for Plan D:

  • 100% of your Medicare Part B coinsurance or co-payment.

  • The first three pints of blood for a transfusion.

  • Part A hospice care coinsurance or co-payment.

  • Skilled nursing facility care coinsurance.

  • Part A deductible — what you must pay out of pocket before your Medicare coverage begins.

  • 80% of health emergencies when you travel internationally (up to the limits of individual plans).

What Does Plan D Not Cover?

Medigap Plan D doesn't cover:

  • Medicare Part B deductible — the amount you must pay out of pocket for outpatient medical services before Medicare starts paying benefits (by law, Medigap plans sold to new Medicare enrollees are not allowed to cover the Medicare Plan B deductible).

  • Part B excess charge — what health care providers who decide not to participate in Medicare can charge (up to 15% more than Medicare's allowable amounts for Part B medical services).

  • Vision care, dental care, prescription drugs or long-term care (as with all other Medigap policies).

How Much Does Plan D Cost?

Monthly premiums for Medicare supplement policies vary widely depending on your location and insurance provider. Sometimes, other factors — such as your age, gender, lifestyle and health condition — also play a role.

There are three general methods for setting insurance rates. Some insurers apply a community rating process, charging the same premium for the same class of plan to all policyholders within a given geographic area. Other insurance companies charge a rate based on your age at the time of purchase, with lower premiums the younger you are. Premiums assessed this way are called issue-age rated. The third method, called attained-age rating, sets premiums according to your current age, with the cost going up as you get older.

With the Medigap plan finding tool at Medicare.gov, you can enter your zip code and instantly find information about the plans and prices in your area.

How Does Plan D Compare to Other Medigap Plans?

Beyond the Medicare Part A coverage that comes with every Medigap policy, both the kind and amount of additional coverage you'll receive depend on your plan choice.

Plan D falls around the midpoint on the spectrum when it comes to the amount of coverage it offers. It's most similar to Plan G, covering all the same costs with one exception: Plan G pays 100% of Medicare Part B excess charges, while Plan D doesn't cover any of them.

Plan D is one of the least widely adopted Medigap plans by consumers. In 2019, Plan D represented 1% of enrollees, according to America's Health Insurance Plans, and more recent data shows that number has dropped. A survey by the American Association for Medicare Supplement Insurance found that in 2020 Plans B, D and K combined accounted for only 0.1% of new Medigap enrollees. Plan G, with nearly 59% of new enrollees, was the most popular, followed by Plan N with nearly 33%.

Plan D is also not as widely available as other more popular Medicare supplement insurance plans. Fewer than half (42%) of all Medigap plan providers offered Medigap Plan D policies in 2019, according to America's Health Insurance Plans. Plan F, which is no longer available to new Medicare enrollees, was the most widely sold, with 85% of insurers having those plans in place. Next in line were Plan A (83%), Plan C (72%) — which has also been discontinued — and Plan G (70%).

Is Medigap Plan D a Good Fit for Me?

Plan D may work for you if:

  • You live in an area where Plan D is available.

  • Your monthly premium rates for more comprehensive Medigap plans are higher than you can afford to pay.

  • You're not concerned about Medicare Part B excess charges because your health care providers participate in Medicare.

What's the Best Time to Select a Medigap Plan?

The ideal time to purchase a Medigap policy is during your individual six-month open enrollment period. That period begins the first day of the month you turn 65 and have enrolled in Medicare Part B. This is the only time in which Medigap plans are guaranteed-issue, which means you can purchase any Medigap policy available in your state, regardless of your health condition.

If you apply for a Medigap plan at any time other than your open enrollment period, the insurance company may deny your application because of your health.

The number of Medicare supplement insurance options has been whittled down over the years. But even now, with 10 existing plans and eight still available to new buyers, there's a lot to sort through. The process of evaluating each one and making the right choice can feel overwhelming.

Key Takeaways

By addressing a few basic questions, this guide hopefully gives you a foundation for weighing the pros and cons of Medigap Plan D.

  • It provides a mid-range level of coverage compared to other Medicare supplement plans.

  • Its coverage is most similar to that of Medigap Plan G.

  • It is less widely available, and much less widely used, than most other Medigap plans.

If you're newly eligible for Medicare — or will be soon — and you're shopping for a Medigap plan, talk to an insurance provider to learn more about Plan D and whether it's a good fit for you.

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