Know the Differences: Medicare Advantage Plans vs. Medicare Supplements
When it comes to Medicare coverage options, everyone starts with Original Medicare, which includes Medicare Part A (hospital coverage) and Medicare Part B (doctor visits). Once you have Original Medicare, you can choose between Medicare Advantage plans (also known as Part C) or Medicare Supplement Insurance (commonly referred to as Medigap plans). However, you cannot have both a Medicare Advantage plan and a Medicare Supplement plan at the same time, so it’s essential to understand their key differences to choose the best option.
Medicare Advantage Plans
Medicare Advantage plans are offered by private insurance companies and bundle your Medicare Part A, Part B, and often Medicare Part D (prescription drug plan) into one comprehensive plan. Medicare Advantage plans typically offer extra benefits like dental care, vision, hearing, and even fitness programs like SilverSneakers, which may be part of the plan’s network of gyms.
These plans provide a more integrated approach to health insurance, covering services that Original Medicare doesn’t, such as prescription drug coverage. While Medicare Advantage plans often have lower premiums, they might include out-of-pocket costs like copays, coinsurance, and deductibles, especially if you go out-of-network for care. Additionally, most Medicare Advantage plans have an out-of-pocket maximum, which limits your annual costs for covered services.
Types of Medicare Advantage Plans
There are several types of Medicare Advantage plans to fit different needs:
- HMO (Health Maintenance Organization): When using an HMO insurance plan, you must choose a primary care physician and get a referral to see specialists. Services are generally limited to the in-network providers.
- PPO (Preferred Provider Organization): Offers more flexibility with your choice of doctors. You can go out-of-network, but your costs will be lower with in-network providers.
- PFFS (Private Fee-for-Service): Allows you to see any doctor who agrees to the plan’s payment terms. No referrals are needed, but not all providers accept this plan.
- SNP (Special Needs Plan): Tailored for individuals with specific illnesses, chronic conditions, or those eligible for Medicaid.
Medicare Supplement Insurance (Medigap Plans)
Medicare Supplement Insurance, also known as Medigap plans, works alongside Original Medicare to cover out-of-pocket costs that Original Medicare does not, such as deductibles, coinsurance, and copays. These costs can add up, especially with frequent medical visits or procedures, making Medigap policies a popular choice for people looking for predictable healthcare expenses.
Unlike Medicare Advantage plans, Medigap plans don’t cover additional benefits like dental care, vision, or prescription drug coverage. If you want medication coverage, you’ll need to enroll in a separate Part D plan. However, Medigap policies offer the freedom to visit any doctor or hospital that accepts Medicare-approved services, which means you won’t need to worry about staying in-network.
Why Choose Medigap Over Medicare Advantage?
One of the main reasons to choose a Medigap plan over a Medicare Advantage plan is the comprehensive coverage for out-of-pocket costs. While Medicare Advantage plans might have lower premiums, they often come with higher out-of-pocket maximums and out-of-network costs. In contrast, Medigap plans offer higher monthly premiums, but they significantly reduce your overall health care costs by covering gaps in Original Medicare.
Many beneficiaries choose popular Medigap plans like Plan G, which covers nearly all expenses except the Part B deductible. This can make Medigap a more predictable and cost-effective choice for those who need frequent medical care.
Also, regardless of the plan you choose, you will still be required to pay your part a and part b premium.
Key Differences Between Medicare Advantage and Medigap Plans
- Medicare Advantage plans often include extra benefits like prescription drug coverage, dental care, and fitness programs, while Medigap plans focus on covering the gaps in Original Medicare by paying for deductibles, copays, and coinsurance.
- Medigap plans offer the freedom to see any Medicare-approved provider, while Medicare Advantage plans may require you to stay within a plan’s network.
- With Medicare Advantage plans, you may have an out-of-pocket maximum, whereas Medigap plans provide more predictable health care costs due to their comprehensive coverage of out-of-pocket costs.
- Medigap is often more expensive in terms of monthly premiums, but it can save you more on overall medical costs, especially if you require frequent services.
How to Choose Between Medicare Advantage and Medigap with Original Medicare
When choosing between Medicare Advantage and Medigap, consider the level of coverage you need, your budget, and how often you access medical care. Medicare Advantage plans often have lower monthly premiums, but with potential out-of-pocket limits that could be high if you need significant care. Meanwhile, Medigap plans typically have higher monthly premiums, but they cover most out-of-pocket costs, ensuring more predictable spending.
Additional Questions and Considerations
Can you have a Medicare Advantage plan and a Medicare Supplement plan?
No, you cannot have both a Medicare Advantage plan and a Medicare Supplement plan simultaneously.
Does Medicare Cover Canes?
Yes, Medicare covers canes as durable medical equipment (DME) if they are deemed medically necessary by your doctor.
Who is eligible for Medicare Supplement Insurance?
You are eligible for Medicare Supplement Insurance if you are enrolled in Original Medicare (both Part A and Part B). It’s best to enroll during the open enrollment period, which begins when you first sign up for Part B.
What plan requires medical underwriting?
Medigap plans are guaranteed issue when you first sign up for them during your initial election period after going on Medicare, even if you have a pre-existing condition. Many states will require medical underwriting if you decide to switch your coverage down the road. However, some states waive medical underwriting during certain times of the year that are directly related to your policy effective date.
Conclusion: What About Medicare Advantage or Medigap Plans?
In summary, Medicare Advantage plans provide a convenient all-in-one option for your health needs, with extra benefits like vision, dental, and prescription drug coverage, but they often come with higher out-of-pocket costs for services outside the plan’s network. On the other hand, Medigap plans offer more predictable costs by covering the gaps left by Original Medicare, making them a good option for those who want financial security in healthcare.
Consult one of our licensed insurance agents to explore the types of coverage available to you and determine the best plan for your specific needs. Contact us today at 520-760-6223.
