Medicare in South Dakota

Medicare is a federal health care program for individuals aged 65 and older, younger residents with specific disabilities and people with end-stage renal disease. Most beneficiaries don’t have to pay for Part A, which provides essential services, such as emergency care, inpatient treatments and medical care in skilled nursing facilities and at home. The premium for Part B in 2023 is $164.90 per month, which covers outpatient services and preventative care such as diagnostic tests, medical transportation and essential medical equipment and supplies. As of 2021, Medicare costs the state of South Dakota almost $1,556,000 per year.

Medicare Advantage, or Medicare Part C, merges all the benefits of Parts A and B into a single plan, excluding hospice care. Seniors have a choice of 30 plans in South Dakota in 2023. Premiums start at 0%, but beneficiaries often add extra coverage, such as prescription drugs, home meals and dental care, resulting in a median monthly premium of $16.30. Part D covers prescription drug costs for Original Medicare recipients and those enrolled in a Medicare Advantage Plan that doesn’t provide this coverage. Various factors determine the premium, such as the tier level of beneficiary’s medications and their individual prescriptions. Medicare Supplement Plans, also known as Medigap, can help seniors cover out-of-pocket costs such as copayments and deductibles.

The Centers for Medicare & Medicaid Services (CMS) administers Original Medicare, while private insurance companies handle Medicare Advantage. They’re entitled to design their plans without interference so long as they operate within the rules and regulations set by the CMS. As of July 2023, 17% of South Dakota’s eligible residents have purchased a Medicare Advantage Plan. Although this is a 5% increase from the previous year, the state falls far short of the national average of 48%. However, that 5% increase suggests a change: of the 3.26% increase in eligible enrollees from 2022 to 2023, a significant 36.76% chose Medicare Advantage. 

This guide explores South Dakota’s various health insurance options. It also covers how seniors can personalize their plans and where they can find additional resources and support.

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 beneficiaries can obtain care services wherever they are in the country, including when they’re on vacation or have moved states. The program’s primary restriction is it rarely pays costs if the senior requires treatment in another country.

As of 2023, Medicare Part A’s annual deduction is $1,600 per benefit period, while Part B’s is $226. Medicare then pays 80% of the costs, with the beneficiary covering the rest.

Who Should Consider Original Medicare

• Seniors who often travel within the country
• Those not needing extra benefits, such as home-delivered meals
• Residents wanting more control of their prescription drug coverage

Medicare Advantage (Part C)

While Original Medicare is fixed, Medicare Advantage is flexible. Its appeal is in offering plans that more closely align with seniors’ health care needs. There are five types of plans available:

• Health Maintenance Organization (HMO)
• Preferred Provider Organization (PPO)
• Medicare Savings Account (MSA)
• Private Fee-for-Service plans (PFFS)
• Special Needs Plans (SNPs)

Each addresses specific requirements, such as seniors who want more control over which specialist provides their care and those looking to save on monthly premiums.

Who Should Consider Medicare Advantage

• People reasonably healthy for their age
• Those willing to accept managed care
• Seniors needing coverage Original Medicare doesn’t provide

The Top 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 August 2023 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 2023 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.