Medicare Supplements & Part D
Understand Your Coverage. Feel Confident in Your Choices.
Medicare comes with important decisions about your healthcare and prescription coverage. Diane Andree at ABC Medicare Plans Broker helps you understand Medicare Supplement and Part D options so you can choose coverage that fits your needs and budget.
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Medicare Supplement Insurance, also called Medigap, works alongside Original Medicare to help pay certain costs you would otherwise pay yourself, such as copayments, coinsurance, and deductibles.
Medigap
What is Medicare Supplements Insurance?
Medicare Supplement Insurance, also called Medigap, helps pay certain out-of-pocket costs left by Original Medicare, such as deductibles and coinsurance. Medicare pays its share first, then your supplement pays according to your policy’s benefits.
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In most states, plans are standardized by letter, meaning the same plan offers the same benefits across insurance companies, although premiums can vary. Massachusetts, Minnesota, and Wisconsin use different standards. Plans C and F are unavailable to people newly eligible for Medicare on or after January 1, 2020.
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Most Medigap policies let you visit any provider nationwide who accepts Medicare, making them a convenient option for travelers or people living in multiple states. Medicare SELECT policies have network requirements.
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Your six-month Medigap Open Enrollment Period begins when you are both 65 or older and enrolled in Medicare Part B. During this period, you can purchase a policy without medical underwriting, regardless of your health.
Basic Medigap Rules
Other important things to know about Medigap policies are:
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You must have Medicare Part A and Part B to buy a Medigap policy, which has a separate monthly premium cost.
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Medicare Supplement plans cover only one person. Your spouse must have his or her own individual policy. Some carriers offer household discounts.
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You can drop your supplement at any time. There is no annual election period for Medicare Supplement plans.
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Plans do not include Part D prescription coverage, so you’ll need a separate stand-alone Part D drug plan (PDP).
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A Medicare Supplement does not cover routine dental, vision or hearing services either. Since Medicare itself does not cover these items, your supplement cannot pay anything toward them either.
Medicare Part D
Part D helps cover:
Medicare Part D is a federal program offered through private insurance carriers to provide drug coverage to consumers on Medicare.
2 ways to get drug coverage:
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Medicare Prescription Drug Plan (Part D): These plans (sometimes called “PDPs”) add drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private Fee-for-Service (PFFS) Plans, and Medicare Medical Savings Account (MSA) Plans.
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Medicare Advantage Plan (Part C): An HMO or PPO or other Medicare health plans that offer prescription drug coverage. You get all of your Medicare Part A (Hospital Insurance)and Medicare Part B (Medical Insurance) coverage, and prescription drug coverage (Part D), through these plans. Medicare Advantage Plans with prescription drug coverage are sometimes called “MA-PDs.” You must have Part A and Part B to join a Medicare Advantage Plan.​
Costs of Medicare Part D:
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Medicare Part D plans vary in premiums, deductibles, covered medications, and pharmacy costs. A lower premium does not always mean lower total costs, so comparing your prescriptions and preferred pharmacy is essential. Many Medicare Advantage plans include Part D coverage.
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You may pay more if you have a late enrollment penalty for going without qualifying prescription coverage or an income-related surcharge (Part D IRMAA). These charges can also apply to Medicare Advantage plans with drug coverage.
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Social Security determines IRMAA using your income, generally from two years earlier. This charge is separate from your plan premium. If your income drops because of a qualifying life event, you can request a review using Form SSA-44.
How Does It Work
Medicare Part D is often the most confusing part of Medicare. It is important to understand how it works so you know what to expect. Medicare sets a standard model for the insurance carriers to follow and that is why most plans look very similar.
One of the first things to understand is that every company has a drug formulary, a list of drugs that they cover. Each drug on the list is assigned to a tier level. Tiers are typically divided into Generic (Preferred-Tier 1 and Non-Preferred-Tier 2) and Name Brand (Preferred-Tier 3 and Non-Preferred-Tier 4). Each tier represents a different cost sharing, so which tier your drug is on will determine how much it costs. Most plans have 4-5 tiers. The higher the tier, the more expensive the drug. One thing to find out about is if there are any Quantity limits on any of the prescription drugs in the plan. Also, some companies have Step Therapy, requiring you to try one or more similar, lower cost drugs before the plan will cover the prescribed drug. This can be appealed by your doctor if necessary.
The next thing to have clear is the different phases of Prescription Drug Coverage.
Phase One - Deductible
Some Part D plans require you to meet an annual deductible, up to $615 in 2026, before coverage begins. Certain drugs, including most generics, may be exempt and some plans have no deductible.
Phase Two – Initial Coverage
You pay copayments or coinsurance for covered prescriptions until your qualifying out-of-pocket spending reaches $2,100 in 2026. This limit is based on qualifying payments, rather than the total retail cost of medications.
Phase Three - Catastrophic
After reaching the limit, you pay $0 for covered Part D prescriptions for the rest of the calendar year.
