Medicare Supplement Vs Medicare Advantage, what are the differences?  If you’re like most people who are on or will soon be on Medicare, you are on the lookout for the best way to ensure that you get reasonable health care without breaking the bank.  

If you would like to have a one on one conversation, please call us at 844-528-8688 and we would be happy to discuss what plan is right for you.

You may have heard of Medicare supplements (also known as Medigap) as well as Medicare Advantage Plans (or Medicare Part C). These are two common options for Medicare recipients to maximize their benefits, but figuring them out can be a real headache. And deciding which one is best for you is even more challenging.

So in this guide, we want to offer you straightforward answers to the most important questions about Medicare Supplement vs Medicare Advantage. We’ll explain what each option is and help you decide the best choice for your needs.

The Most Important Difference Between Medicare Advantage and Medicare Supplement

Important Terms to Understand

Before we compare your two options, let’s get a few difficult terms out of the way. Understanding these now will help you better grasp the difference between Medigap and Medicare Advantage.

Deductible: A deductible is the amount of out-of-pocket cash you will need to pay before your Medicare benefits kick in. For example, the Medicare Part A deductible for inpatient hospital care is around $1400. This means that if you required inpatient services, you would have to pay the first $1400 in expenses before Medicare would start paying anything.

Benefit Period: This is the period of time that must pass before your deductible resets and you have to pay it again. It can get complicated, but a simple way to understand it is that after paying your deductible, you won’t have to pay it again until 60 days have passed without you requiring the same sort of medical care.

Premium: Insurance premiums are a monthly fee that you need to pay in order to maintain coverage. For example, the standard monthly premium to stay on Medicare Part B was $144.60 in 2020.

Coinsurance: A percentage of medical costs that you are responsible for paying, even after you have met your deductible. Medicare Part B, for example, requires 20% coinsurance on most services. So if you required $1000 worth of medical care, you would pay $200.

Copayment: Like coinsurance, but it is a fixed dollar amount rather than a percentage. With Medicare, this mostly applies to prescription drugs (covered by Part D).

What Is Medicare Supplement?

What Is Medicare Advantage?

Unlike Medigap, when you choose a Medicare Advantage Plan, you are opting out of Original Medicare. Instead, you are choosing a third party insurance provider to handle all of your health care.

You will continue to pay your Part B premium, and may also have an additional monthly premium from the insurance company. However, all Medicare Advantage providers are required to offer at least the same level of coverage as Original Medicare.

A Medicare Advantage Plan is similar to shopping around for insurance before you had Medicare. You get to compare companies, plans, coverage, and costs and choose the best option for you.

At the same time, you’ll be tied to the health care providers that are in your plan’s network, a restriction that doesn’t come with Original Medicare. However, many Advantage Plans also cover prescriptions, dental, vision, and hearing—so they are appealing to many.

Medicare Supplement Vs Medicare Advantage: Which Is Right For Me?

There is no one size fits all answer to the question of Medicare Advantage vs Medicare Supplement. Instead, you have to consider your specific needs in order to find which is best for you.

So let’s compare these two Medicare options across some of the most important elements of your healthcare.

Healthcare Provider / Network

Since Medigap is simply an addition to your Original Medicare, your benefits will apply to any doctor or hospital that accepts Medicare. This means you’ll have a wide range of providers to choose from and won’t be tied down to a specific network.

With Medicare Advantage, however, you will be restricted to the hospitals and providers that are within the network of your insurance company. So if you would like more freedom to choose your doctors, Medigap is a better choice for you. If you are interested in a Medicare Advantage plan but want to keep seeing your current providers, you should make sure they are in-network before adopting a plan.

Specialist Referrals

With Original Medicare (and thus Medigap), you will not need a referral for specialists. Many Advantage Plans, on the other hand, require a referral from your primary care provider in order for a specialist visit to be covered. If you see a specialist without this referral, you may have to pay all of the costs out-of-pocket.

So, if you want free-range of choosing when to see a specialist, Medigap is probably the way to go.

Costs

Here’s where it gets a little tricky to compare. The exact costs are going to vary a lot based on exactly what coverage you opt for. For both Medicare Supplement and Medicare Advantage, you’ll continue to pay the Part B monthly premium. Beyond that, here is what you can expect:

• Medigap: If you choose your plan right, you will see very few out-of-pocket expenses for services, and most plans eliminate the deductible. However, your monthly premium will increase. In essence, you are choosing a fixed monthly cost over big surprise medical bills.
• Medicare Advantage: Your monthly costs will usually be lower than with Medigap. However, you will have a copayment or coinsurance for most medical services. A deductible may apply as well.

Prescription Drugs

Medicare Supplements do not include prescription drug coverage. If you choose Medigap, you would also need to enroll in Medicare Part D in order to receive coverage for prescriptions.

Most Medicare Advantage Plans do include prescription drug coverage. If you are trying to decide what is best for you, you should weigh the costs of the Advantage Plan against the cost of adding Part D on top of your Original Medicare.

Other Healthcare

Medicare Supplements do not include coverage for dental, hearing, or vision care. Many Advantage Plans do cover some or all of these services. You’ll have to shop around to find the plan that includes what you need, but if you are hoping to avoid large out-of-pocket expenses for these types of care, a Medicare Advantage Plan may be best for you.

Enrollment Period

Medigap has relatively loose rules about when you can enroll compared to Medicare Advantage. Basically, any time after you turn 65 and are enrolled in Part B, you can add a Medicare Supplement.

Medicare Advantage Plans, however, operate more like a traditional health insurance plan with an open enrollment period. This is going to vary from one insurance company to the next, so you may need to shop around a bit if you are on a strict time schedule.

2 Important Considerations to Guide Your Decision

So far, we’ve covered the basic differences between Medigap and Medicare Advantage. By this point, you might be leaning towards one over the other. Before you make your final decision, however, there are a few important points you need to keep in mind.

#1 You get what you pay for.

Just like everything in life, better Medicare coverage is going to cost more. This is why we always recommend that you choose some sort of addition to your Original Medicare, whether that’s Medigap or a Medicare Advantage Plan.

The real decision is whether you want predictable payments or not. Medigap will offer you predictable monthly payments so that you don’t have to fork up surprise cash in an emergency. Medicare Advantage may require you to plan ahead a little bit more and have some money in savings for surprise healthcare costs, but there will not be as much monthly overhead.

#2 You can’t just switch plans any time you want

Unfortunately, you can’t game the system by opting for the cheapest options now and then switching plans when your healthcare needs change.

You are allowed a 12-month trial period for Medicare Advantage. If you leave it within that time frame, you can go back to Medigap without restriction.

While there are some other exceptions, the general rule is that if you have Medigap and drop it, you may not be able to re-enroll in it again. If you do, you will be subject to medical underwriting, which means you may be denied coverage or charged higher premiums due to pre-existing health conditions.

Long story short: Your best option is to do your research and make an informed decision about the best plan for you so that you don’t have to deal with the risk of changing down the road.

Need Help Making The Right Decision?

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Medicare Wellness Visit vs. Annual Physical

Does Medicare cover a physical exam? The short answer is no, but it does cover a wellness exam.  Here’s a question for you, “what’s the difference between a Medicare Annual Wellness visit versus an Annual Physical and which one is covered by Medicare?”

Before your head explodes, take a minute and read the following list of procedures and measurements that make up these two completely separate doctor visits and we’ll point out the subtle difference between them.  Or call us to discuss what is covered and how it will affect you 844-528-8688.

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What to do With Medicare When Moving out of State

Most seniors who are embarking on a challenging move (they’re all challenging), are likely to have questions about whether their Medicare Plans will follow them to another state.

Our intention in this guide is to answer your questions clearly but if we aren’t clear enough or you have questions that haven’t been addressed in this guide; call us right now at 844-528-8688.

Medicare Penalty

Penalties for not signing up for Medicare:  Believe it or not, there are penalties for not signing up for Medicare. Now, it’s not like the federal government is forcing you to enroll in Medicare. But, if you don’t sign up during your eligibility window, you are going to face some pretty significant fees.  To put it plain and simple, your Medicare is going to cost you more.  This can get confusing, so if you have any questions, please give us a call at 844-528-8688.