Medicare in South Dakota

Medicare is a federal health insurance program that’s available to seniors aged 65 and older, as well as younger adults with certain disabilities. This program has been around since 1965, and it currently covers 177,500 South Dakota residents. Over 24% of Medicare enrollees chose Medicare Advantage plans in 2021, according to the Kaiser Family Foundation. Enrollment varies by county, since different plans are available in different geographic areas.

Seniors who choose to stay on Original Medicare receive Part A and Part B benefits through the federal government, including hospital stays, outpatient medical care care and diagnostics. However, there are other Medicare plans that are privately run. Medicare Advantage, or Part C, plans are sold by private insurance companies. These plans include the same benefits as Original Medicare, with the exception of hospice care, and they often include additional benefits, such as drug coverage (Part D, dental and vision care, gym memberships and more. Many Original Medicare users choose to supplement their coverage with Medigap plans, which can reduce their out-of-pocket expenses. Those enrolled in the Advantage Plans don’t need Medigap. There are also standalone Part D plans that cover prescription drugs for individuals on Original Medicare.

Although South Dakota is a sparsely populated state, about 30% of residents have a low or moderate income. This can make it difficult to afford copays and out-of-pocket costs without government subsidies, such as Extra Help. Medicare currently spends about $10,289 per enrollee per year in South Dakota, which adds up to about $1.4 billion statewide.

In this guide, seniors can find information about Medicare plans that are available in South Dakota, as well as other resources that can help older adults save money and maximize their insurance benefits.

Options for Medicare Coverage in South Dakota

When seniors first become eligible for Medicare, they’re enrolled in Parts A and B, also known as Original Medicare. Alternatively, they can sign up for a Medicare Advantage plan during the initial enrollment period that starts 3 months before their 65th birthday. Other supplemental options are available through private insurance companies.

Original Medicare (Parts A & B)

Original Medicare is administered by the Centers for Medicare & Medicaid Services (CMS) and is open to seniors aged 65 and over, along with those under 65 years old, but with certain disabilities or end-stage kidney disease. It includes two parts. Part A covers inpatient hospital care, nursing home and skilled nursing care, hospice and home health care. Part B, or medical coverage, pays for medically necessary goods and services such as durable medical equipment, mental health services and emergency medical transportation. 

Unlike most private Medicare plans, Original Medicare’s provider network isn’t limited to the beneficiary’s geographic region, making it easier to obtain services while traveling within the country. In most cases, Medicare doesn’t pay for health services the individual receives outside the United States. 

Under this program, seniors pay for services as they receive them. They must pay an annual deductible, which is $1,556 for Part A and $233 for Part B in 2022. After they’ve paid this amount, Medicare covers all eligible services at 80%. Beneficiaries pay the remaining 20% out of pocket.

Who Should Consider Original Medicare

Original Medicare may be a good option for those who:

• Travel frequently within the United States
• Don’t need extra benefits such as home-delivered meals and coverage for over-the-counter medication
• Want to choose their own prescription drug coverage

Medicare Advantage (Part C)

Nationally, enrollment in Medicare Advantage plans, commonly referred to as MA plans, has doubled over the past 20 years. One reason seniors choose these plans is that they cover additional benefits, such as vision, dental and hearing, that aren’t available through Original Medicare. Most plans also include prescription drug benefits, so there’s no need to purchase standalone Part D coverage. Medicare Advantage enrollment ranges from 3% to 30% in South Dakota counties where this coverage is available. Another benefit of Medicare Advantage plans is that they include an out-of-pocket maximum for both in-network and out-of-network services, which isn’t the case with Original Medicare. Finally, about 60% of enrollees pay no additional premium after they pay for Part B. Seniors must continue paying for Part B, although the benefits will be administered by their MA plan.

Although Part C plans cover some services that aren’t available through Original Medicare, they may require prior authorization. They’re not required to cover services that aren’t medically necessary, according to Medicare standards. Out-of-pocket costs and co-insurance rates vary by policy and depend on whether seniors sign up for an Health maintenance organization (HMO), Preferred Provider Organization (PPO) or Private Fee-For-Service Plan. There are also Special Needs Plans (SNPs) for individuals with certain medical conditions, such as diabetes. Unlike Original Medicare, which provides uniform benefits, each Medicare Advantage plan is different, so it’s important to shop around.

Who Should Consider Medicare Advantage?

Medicare Advantage can be useful for those who:

• Need coverage not provided by Original Medicare
• Will accept managed care
• Want limits on their out-of-pocket expenses
• Are generally healthy, so may benefit from lower premiums

The Top 10 Medicare Advantage Plans in South Dakota

South Dakota seniors have a lot of Advantage plans to choose from. The following table provides information on the most popular insurance providers as of April 2022 based on enrollment data, monthly cost range and satisfaction ratings. More information on Medicare Part C is available on the Medicare Advantage Plans in South Dakota page.

Medicare Prescription Drug Coverage (Part D)

Original Medicare doesn’t pay for most prescription drugs through Part A or B coverage. Instead, seniors purchase separate prescription drug policies, also called Part D coverage. Medicare contracts with private health insurance companies to provide this coverage. There are multiple plans to choose from with varying monthly premiums, which beneficiaries pay in addition to their Original Medicare premiums. While seniors don’t have to purchase prescription drug coverage when they’re first eligible for Medicare, not obtaining this coverage at this time may result in late enrollment penalties they pay for as long as they have Medicare if they enroll later.

Each prescription drug plan has its own formulary, or list of covered drugs. Formularies are typically split up into tiers. The tier a medication is in determines how much the insurance company pays and how much the beneficiary pays for it. Lower-level tiers are usually made up of generic and low-cost brand name drugs, while higher tiers are composed of more expensive brand name and specialty drugs. In most cases, the lower the tier, the lower the policyholder’s cost-sharing responsibility.

Who Should Consider Medicare Prescription Drug Coverage

Seniors who may benefit from prescription drug coverage include those who:

• Currently take prescription medication or expect to in the future
• Want to avoid late enrollment penalties
• Want to reduce out-of-pocket prescription drug expenses

Medicare Supplement Insurance (Medigap)

While Original Medicare provides coverage for many medical costs, seniors may still have significant out-of-pocket expenses. These may include copays, coinsurance and deductibles. Seniors may be able to reduce their cost-sharing obligations by purchasing a Medigap plan. These plans can only be used with Original Medicare. It’s illegal for private insurance companies to sell Medigap plans to those with Medicare Advantage plans.

For more information on Medigap plans, seniors can refer to the Best Medicare Supplement Companies of 2022 page.

Who Should Consider Medicare Supplement Insurance

Good candidates for Medigap may be those who:

• Have ongoing health issues and expenses
• Travel overseas often
• Want to access an expanded network of health care providers
• Expect to need health services not covered by Original Medicare

Medicare Resources in South Dakota

Medicare is a complex health insurance system that’s administered by private insurance companies and the federal government. South Dakota seniors who are new to Medicare or want to change their coverage during the annual open enrollment period can contact the following agencies for assistance. Federal funding ensures that free insurance counseling is available to all Medicare beneficiaries. Seniors can learn more about these resources below.