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Medicare Advantage Insurance vs. Medicare Supplement Insurance
When the time comes to explore your Medicare options, you may be surprised (even overwhelmed) at the number of options you have to consider. Here’s an overview of Medicare Advantage and Medicare Supplement plans, and some facts to consider as you choose which Medicare plan is right for you.
Medicare Advantage Insurance
Medicare Advantage insurance plans, also known as Medicare Part C plans, includes the coverage of Part A, Part B, and typically includes Part D coverage as well. Some Medicare Advantage plans may also include additional benefits not available with Original Medicare, such as hearing, dental and vision coverage. These Medicare plans may also offer $0/month premiums.
While government-regulated, these plans are sold by private insurers who set their own monthly premiums. Some Medicare Advantage plans may include extra coverage such as vision, hearing and dental benefits, and most plans also include prescription drug benefits.
Medicare Advantage plans can cover different out-of-pocket costs and/or different co-pays, similar to private health insurance plans. Some have HMO or PPO plan options, and some may pay some portion of out-of-network care, while others will only cover doctors and facilities that are in the HMO or PPO network.
Medicare Supplement Insurance (Medigap)
Medicare Supplement insurance plans, also known as Medigap Insurance plans, is private insurance that supplements Medicare Parts A and B. These plans help pay some health care costs Parts A and B don’t pay for, such as copayments, coinsurance and deductibles.
Medicare Supplement Plans
You must have Medicare Part A and B in order to buy a Medicare Supplement or Medigap policy. These plans are standardized and each Medigap policy follows Federal and State laws to protect you.
Private health insurance companies sell Medicare Supplement insurance plans, but each standardized Medicare Supplement policy must offer the same basic benefits; no matter which company sells it.
What’s the difference between Medicare Advantage and Medicare Supplement?
Below is an overview of the main differences between Medicare Advantage and Medicare Supplement.
| Plan Details | Medicare Advantage | Medicare Supplement |
|---|---|---|
| Ability to make changes | Two open enrollment periods each year | One enrollment period per lifetime except for special circumstances |
| Prescription Drug Coverage | May cover | Does not cover |
| Routine dental, routine hearing, routine vision | May cover | Does not cover |
| Coinsurance and copayments | Usually has coinsurance and copayments | May cover all coinsurance and copayments |
| Restrictions on network providers | Yes | No |
| Standardized benefits | No | Yes |
| Monthly premium | As low as $0 | Usually has a monthly premium |
| Part B deductible | May have no deductible | Depends on plan |
| Part B premium | Must pay | Must pay |
Three Factors to Determine if a Medicare Supplement or Medicare Advantage Plan is Right For You
Everyone has different priorities when it comes to choosing a Medicare plan. In general, most people look at the following factors when debating Medicare Advantage vs. Medicare Supplement insurance plans:
1. Medicare Costs
For some, cost is most important, considering premium costs, costs you might incur from spending time in the hospital or receiving medical care such as deductibles, co-pays, etc. Generally, Medigap coverage has a higher monthly premium but could result in lower out-of-pocket expenses compared to some Medicare Advantage plans. Medicare Advantage plans generally cost less and cover more services, which can be the better option for someone on a budget.
2. Medicare Services
For individuals with a history of needing heightened medical care or hospitalization, or who anticipate needing these in the future, having access to the most services (and the most freedom to choose preferred doctors) is often first and foremost. Medicare Advantage plans generally limit you to the doctors and facilities within the HMO or PPO and may not cover any out-of-network care. Medigap policies cover you if you go to any doctor or facility that accepts Medicare.
3. Lifestyle Choices
Medicare Advantage plans only operate within a certain region. If you live in more than one state throughout the year, a Medicare Supplement insurance plan may be a better choice than a Medicare Advantage plan. This may also be true if you travel frequently because, while some Medigap plans provide coverage when traveling outside of the US and cover you in all 50 states, Medicare Advantage plans generally do not.
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Frequently Asked Questions of Medicare Advantage Plans
What is a Medicare Advantage plan?
A Medicare Advantage plan provides an alternative to Original Medicare (Parts A and B). These plans are offered by private health insurance companies that are approved by Medicare.
Can I go to the doctor with a Medicare Advantage plan?
You can go to the doctor with a Medicare Advantage plan, but you typically are required to stay in-network for care.
Are my prescription drugs covered with a Medicare Advantage plan?
Most Medicare Advantage plans include prescription drug coverage.
How much does a Medicare Advantage plan cost?
Typically, Medicare Advantage plans have lower monthly premiums than Original Medicare. In fact, some plans may even be $0/month premiums. In addition to a monthly premium, you’ll typically have a copay when you go to the doctor or hospital.
When can I make changes to my Medicare Advantage plan?
You can make changes to your Medicare Advantage plan each year during the Medicare Annual Enrollment Period (AEP). There are also special situations, such as losing coverage or moving, that allow you to select a new plan.
Do Medicare Advantage plans have any other benefits?
Some Medicare Advantage plans offer extra benefits that Original Medicare doesn’t cover—like vision, hearing or dental. These plans have a yearly limit on what you pay out-of-pocket for Medicare Part A and B covered services. Some plans even offer fitness and wellness benefits.
Who needs Medicare Advantage coverage?
Anyone looking to pay lower monthly premiums and paying a copay when they go to the doctor or hospital could benefit from a Medicare Advantage plan.
Medicare Supplement Plans Frequently Asked Questions
What does Medicare Supplement coverage look like?
Medicare Supplement insurance helps cover gaps in coverage from Medicare Parts A and B. Medicare Supplement plans are also standardized by the government.
When is the best time to buy a Medicare Supplement policy?
The best time to buy a Medicare Supplement policy is during your Initial Enrollment Period.
Can I still see my doctor with a Medicare Supplement plan?
With a Medicare Supplement plan, you can choose any doctor who accepts Medicare patients; there are no networks.
Do Medicare Supplement plans cover prescription drugs?
No, but Medicare Part D Prescription Drug plan coverage can be purchased in addition to a Medicare Supplement plan to help cover these expenses.
How much does a Medicare Supplement plan cost?
Medigap plans commonly have higher premiums, but these costs can be offset by much lower annual out-of-pocket costs for healthcare services. Some plans don’t even require you to pay a copay when you visit the doctor or hospital.
When can I make changes to my Medicare Supplement plan?
You are able to enroll in a Medicare Supplement plan during your initial enrollment period. As long as you continue to pay your premium, you can never lose coverage.
Who needs Medicare Supplement Insurance coverage?
Individuals who benefit most from Medicare Supplement coverage are looking to pay minimal to no co-pays when going to the doctor or hospital, but keep in mind, this is often offset by higher monthly premiums.
Compare Medicare Advantage Plans vs. Medicare Supplement Plans
Figuring out which Medicare Advantage or Medigap plan to enroll in isn’t something you have to do on your own. Once you better understand the basics of Medicare, save yourself the time and the hassle of navigating Medicare and let us enroll in Medicare for you. In just minutes, we can compare Medicare Advantage and Medicare Supplement plans from some of the most trusted carriers to find the right coverage for you. It’s a free service and there’s no obligation to purchase a plan.
