Combining Part D & Medigap Insurance

Medicare Supplement (Medigap) plans sold after January 2006 don’t feature coverage for prescription medications. People with these policies can minimize their out-of-pocket drug expenses by joining a Medicare Part D plan with a Medicare Supplement plan. Follow these steps to combine the plans and maximize your coverage.

Join A Medicare Supplement Plan

Medicare Supplement plans are available to most Americans enrolled in Medicare Part A and B. Typically these people are aged 65 or over. Those under 65 may also get a Medicare Supplement plan if they have certain disabilities or other chronic health complaints. Eligibility for under 65 plans varies from state to state, so contact your state’s insurance department to learn whether you can get a Medicare Supplement plan.

These plans are available through private insurance companies and brokers. Research your options carefully before signing up via your preferred provider’s website, over the phone, or by mail.

Enroll In A Medicare Part D Plan

There are several ways you can join a Medicare Part D plan. Depending on your preference, you could:

  • Enroll directly via the plan’s website or after finding a policy on the Medicare Plan Finder page
  • Phone your preferred plan provider
  • Phone Medicare directly at 1-800-MEDICARE

Make sure you have your Medicare number and the date your Part A and/or Part B coverage began when you call Medicare. This information is printed on your Medicare card.

Be Prepared To Pay A Late Enrollment Penalty

Late enrollment penalties typically apply to people who’ve been without credible drug coverage for more than 63 days. If this describes you, you should be prepared to pay a higher premium than those who joined a Medicare Part D plan when they were first eligible.

Your penalty will increase every month you don’t hold a Medicare Part D plan. This penalty will be at least an extra one percent on the national average premium every month. So, if you get a Medicare Part D plan after being without drug coverage for 20 months after the grace period, you’ll pay at least 20 percent more than someone that signed up to the plan when they were first eligible.

We encourage our clients to take up Medicare Part D plans early, even if they aren’t dependent on prescription drugs, as the nature of prescriptions is unpredictable.

Avoiding A Late Penalty

Signing up for a Medicare Part D plan within 63 days of being without credible drug coverage (including after losing coverage from a former employer, union, or COBRA) is the most obvious way to avoid a late penalty. However, there are some other ways you can avoid this penalty in the right circumstances, including signing up:

  • Three months before the month of your 65th birthday to three months after it
  • Between the 22nd and 28th month you’ve received Social Security disability payments
  • When you return to the United States after living abroad. If you turned 65 while overseas, you get seven months to enroll without penalty (three months before and three months after your arrival). Everyone else gets 63 days after arriving in the U.S.
  • When you’re released from prison. You’ll get seven months to enroll without penalty if you turned 65 while incarcerated (three months before and three months after your release). Everyone else gets 63 days after being released.
  • When you receive “Extra Help” with your prescription fees

What If My Medicare Supplement Policy Has Prescription Drug Coverage?

Medicare Supplement plans issued before January 2006 often have prescription drug coverage. Your provider will send you a notice every year to tell you whether it has reliable coverage. File these notices away in case you decide to join a Medicare Part D plan.

If your Medicare Supplement plan already has credible prescription drug coverage, you needn’t join a Medicare Part D plan. On the other hand, you may like to join a Medicare Part D plan if your Medicare Supplement plan’s coverage is less than reliable. You can do this by following these steps:

  • Join a Medicare Part D plan during the open enrollment period (from Oct. 15 to Dec. 7).
  • Contact your Medicare Supplement insurance company to inform a representative of your decision. Your insurance provider will remove prescription drug coverage from your policy and adjust your premium accordingly.

Once you remove drug coverage from your Medicare Supplement plan, you can’t get it back, so carefully consider whether you want to take this step. Speak to your employer or union benefits administrator before making your decision to ensure you understand the consequences.

How to Avoid the Part D Late Penalty


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