Knowing the differences between Medicare Advantage and Medigap, or Medicare Supplements, is crucial regarding your healthcare coverage benefits.
If you’re signing up for Medicare, you must decide whether to enroll in Medicare Parts A and B with a supplemental insurance policy, or Medicare Part C Advantage Plan.
The names and letters can be confusing. It’s important to understand the differences between these plans before you sign up. When you are confident in your insurance coverage, you will be confident in your health care.
Differences Between Medicare Advantage vs Medigap
When Medicare was established in the 1960s, there was Medicare Part A for hospital coverage, and Part B for medical costs. Today, Parts A and B are referred to as “Original Medicare.” Original Medicare pays about 80 percent of medical costs after deductible are met.
To avoid potentially needing to paying thousands of dollars out of pocket, Medicare beneficiaries can buy supplemental insurance that covers things that Medicare doesn’t. These policies, offered by private insurance companies, are known as Medicare Supplements.
In 2003, Congress established the Medicare Advantage program. Thus, allowing private insurance companies to offer Parts A and B coverage as an alternative to Original Medicare
This plan is also known as Medicare Part C. These plans may offer more extensive coverage than Original Medicare. However, if you have a Medicare Advantage plan, you can’t also have a supplement plan, you will need to select one or the other.
Key Features of Medicare Advantage Plans
Medicare Advantage plans replace Medicare Parts A and B coverage and may also offer additional coverage. You will need to continue to pay your Part A and B premium in addition to the Medicare Advantage plan premium. Most beneficiaries don’t have a Medicare Part A premium.
Like most employer-sponsored health insurance, Medicare Advantage plans have provider networks, and you’ll pay more if you use out of network doctors, hospitals or DME suppliers.
Most plans include prescription drug coverage. If they don’t, you can sign up for a standalone Medicare Part D prescription plan. If you don’t sign up for Part D prescription drug coverage when you’re first eligible, you may be required to pay the Part D late enrollment penalty.
There are a variety of plans available. All offer at least the same basic coverage as Original Medicare. There may be a wide range of premium prices, deductibles andco-pays, but some coverage is better than no coverage.
Some plans, in some areas may include vision, hearing, or dental coverage.
The Key Features of Medicare Supplement Plans
Medicare Supplement plans provide insurance coverage to fill the holes of Traditional Medicare Parts A and B. When you purchase a Medicare Supplement, you’re purchasing a peace of mind and a consistent cost to your healthcare.
You must be enrolled in Medicare Parts A and B to get a Medigap policy. You will need to continue paying your Part A and B premiums to avoid a lapse in coverage.
There are no provider networks. You can see any health care provider that accepts Medicare assignment. You will not need a referral and if you want a second opinion, then you get it.
It doesn’t cover prescription drugs, but you can get prescription drug coverage by enrolling in Medicare Part D. Your insurance agent will be able to tell you what prescriptions are covered, which require a deductible and which plan is best for you.
There are 10 standard plans, labeled A through N, and each one offers different benefits. If you enroll in one of the most comprehensive plans, like Medicare Plan F plans, your policy will cover virtually all medical costs not covered by Medicare, including the annual deductibles for Plan A and B.
Premiums vary by plan and by individual insurer. That means insurers may charge different amounts for the exact same coverage.
If you enroll during the Open Enrollment Period around your 65th birthday around your Medicare Part B effective date, you cannot be turned down or charged a higher premium because of your age or health. If you enroll later or switch coverage, it may cost more, or you could be denied.
Figuring Out Your Options
Sorting through your Medicare options can be difficult and time consuming. At MedicareFAQ, we explain your choices and research top ranked insurance companies to find a plan that works for you, and your budget.
If you’re searching for rates for any of the 4 parts of Medicare or a Medicare Supplement, please reach out to one of our senior agents so they can help you! Our service is 100% free and there’s no obligation to sign up at any point.
Give us a call on our toll-free number listed above. You can call an agent licensed in your state, or use our online feature and complete the rate form here to have an agent start comparing rates for you.
Is Original Medicare better than a Medicare Advantage plan?
Medicare Advantage plans offer a Maximum Out of Pocket (MOOP) amount, this amount prevents you from spending tens of thousands on covered healthcare services.
For example, if the plan has a $4,000 MOOP, then the most you could possibly pay for the entire year on covered services would be $4,000.
This does not include your premium costs. Original Medicare doesn’t offer a MOOP, you could spend tens of thousands of dollars on your healthcare if you only have Original Medicare.
Which is better Medicare Advantage or Medigap?
This depends on your healthcare needs, budget and lifestyle. The plan that best suits your neighbor, might not be the plan that is best for you. There are Medicare Supplement plans that cover all the gaps in Medicare, such as Medicare Supplement Plan F.