Medicare Advantage vs. Medicare Supplement

It's not unusual for insurance plans to be confusing - Medicare is no exception. There are two main options available when deciding which coverage is best - Medicare Advantage Plans and Medicare Supplement Plans. Both of these policies are provided by private insurers and designed to help cover the unexpected costs in Medicare coverage. Though they serve a similar purpose, they are designed very differently.

Before we look deeper, let's look at a quick overview,

Medicare Advantage Plans are completely separate from Original Medicare. When you enroll in a Medicare Advantage Plan, you will receive all of your coverages from that private insurer, not from Medicare. You will use this plan’s network of providers for all care. This means you may have to switch providers for certain health services.

On the other hand, Medicare Supplement Plans work directly with Medicare to help pay certain uncovered costs. This is notitalic text stand-alone insurance like a Medicare Advantage Plan. This means that Medicare first pays its portion of the medical bills, and then your Medicare Supplement Plan covers the remainder of the payment.

Like any type of insurance plan, both options will have significant differences when it comes to cost, coverage, and how they work in general. Therefore, it is vital to research all the differences and decide on the best coverage options for your personal situation

While both plans are meant to help reduce your out-of-pocket spending, we encourage you to take a more in-depth look at the features and benefits of each option.

A Medicare Advantage policy, referred to as Medicare Part C, is an alternative way to receive Medicare coverage. This bundled, all-in-one coverage not only includes all the services in Original Medicare but also offers a variety of additional benefits. A Medicare Advantage Plan can expand coverage, help make your healthcare more affordable, and provide all of your healthcare related services under a single plan. Other benefits can include:

• Vision coverage
• Dental coverage
• Hearing coverage
• Prescription drug coverage
• Transportation to doctor’s appointments
• Health and wellness services
• Customized benefits plans for certain chronic illnesses

It’s important to note that when you are enrolled in a Medicare Advantage Plan, you still have Medicare. In fact, you must be enrolled in Medicare Parts A and B to even be eligible for a Medicare Advantage Plan. Though you are technically enrolled in Medicare Parts A and B, you will receive all your benefits through the advantage plan.

The cost of a Medicare Advantage policy can vary greatly depending on the features and benefits in the package you choose. The cost will be in addition to the Part B premium you have to pay each month.

The Zero-Dollar Premium Trade-Off

Some Medicare Advantage plans offer $0 premium plans. When an offer sounds too good to be true, it likely is. While the Zero-Dollar Premium may be the right choice for you it’s important to note that the no-premium option comes with a trade-off of sorts.

Almost every zero-dollar premium plan will require you to agree to receive all of your care through that plan’s network providers. For some participants, the zero-dollar premium is worth the change in providers. But for participants with long-standing relationships with their medical providers, it may be a deal breaker to have to switch doctors or specialists who understand their complicated medical situations. Read the fine print and weigh your options carefully.

The parent company of the Medicare Advantage plan you choose will be responsible for paying your health care bills in place of Medicare paying them. You will be responsible for paying copayments, but they are typically considered affordable. Other costs associated with Medicare Advantage may include an annual deductible and coinsurance. Assistance may be available to qualify low-income participants.

There are 5 different types of Medicare Advantage Policies available:

1. Preferred Provider Organizations (PPOs) - These recommend the use of healthcare providers within an established network. The amount of medical cost coverage you receive will be higher when you stay within that network.
2. Health Maintenance Organizations (HMOs) - These will require you to use medical providers within your designated network.
3. Private Fee For Service (PFFS) - These plans determine how much a health care provider will have to pay vs how much you, the beneficiary, will have to pay.
4. Medical Savings Account (MSA) - These plans deposit money into a checking account used only for health care needs. This is used to pay for health care costs before your deductible is met.
5. Special Needs Plan (SNP) - These customized plans were designed to meet the needs of beneficiaries with certain health conditions.

It is very important to look at all the costs and coverage details of a Medicare Advantage plan before deciding if it is the right choice for you. These details can alternate greatly between different plans. As with any kind of insurance enrollment, it’s advised that you read through all the fine print, ask questions, and inquire about any features that aren’t clear to you.

Although Medicare Advantage plans can offer many benefits, there are also some disadvantages associated with their policies. Those drawbacks are something participants will want to be aware of before they become an unexpected problem.

Drawbacks of Medicare Advantage

Since most Medicare Advantage plans require you to see health care providers within their network of providers, you will have fewer options and less flexibility when it comes to the providers you see. This may mean parting ways with a doctor you have used for years who knows your health history.

While some Medicare Advantage plans will allow you to see doctors outside of their network, they will typically come with higher costs. This limitation may be a sticking point for those who are attached to their primary care physician.

Medicare Advantage premiums are greatly influenced by personal health factors. This means that as you age and have changing healthcare needs, your costs have the potential to rise significantly.

Is a Medicare Advantage Plan Right for you?

A Medicare Advantage plan may be a better option for you if you are in good overall health and if you do not expect a significant amount of healthcare-related expenses. This can help provide you with low monthly premiums and fewer unexpected costs. Medicare Advantage plans may also be better for you if you want additional coverage for things such as prescription, dental, and vision coverage.

Medicare Advantage plans are constantly being reevaluated to add coverages that are not usually addressed under Original Medicare. Many of these benefits include transportation, in-home care, and adult daycare. It is worth exploring your options in Original Medicare vs Medicare Advantage plans each year to make sure you are getting optimal access to all your health care needs.

Medicare Supplement plans, also known as Medigap, were designed to help cover the “gaps” in your Medicare Policy. Medigap is supplemental insurance to your Original Medicare and helps cover the following costs:

• Copayments
• Deductibles
• Coinsurance
• Some emergency medical care when traveling outside of the United States

It is important to understand that to receive the benefits of a Medigap policy, you must also be enrolled in Original Medicare. Medigap does not replaceitalic text Original Medicare but instead works withitalic text it to help cover your out-of-pocket expenses. For example, Medicare primarily pays your healthcare bills, while Medigap simply covers some of the costs that the original plan does not.

The benefits of Medigap are standardized, meaning that you will receive the same quality and basic benefits of coverage no matter what private insurance you decide to purchase from.

Although the benefits of Medigap are standardized, the cost is not. The cost will vary depending on the location and policy you choose. That cost is paid as a monthly premium. This Medigap appointment is in addition to the Medicare Part B premium you pay.

As with all insurance policies and plans, there are both advantages and disadvantages. Reading all the fine print ensures that you are aware of these benefits and drawbacks before they become an issue.

Medigap Benefits

• You can purchase a Medigap policy from any insurance company that is licensed in your state.
• Any Medigap policy is guaranteed renewable no matter your current health problems. This means that no insurance company can drop you due to health conditions as long as you pay your premium.
• If you’re using Medigap, you won’t need referrals to see a specialist.
• Medigap covers copayments, deductibles, and coinsurances.
• Medigap offers the freedom to choose your own doctors and hospitals.
• Your plan may cover some care outside of the country.
• Medigap offers standardized benefits no matter what policy is chosen.
• Medigap helps you avoid unexpected out-of-pocket costs.

Medigap Disadvantages

The main disadvantage of Medigap is the lack of coverage for certain, specific health care needs. Medigap does not cover:

• Vision care
• Dental care
• Hearing-aid costs
• Private-duty nursing costs
• Long-term care costs

Is a Medigap Supplement Plan best for you?

A Medigap supplement policy may be the best choice for you if you travel frequently or if you spend a significant part of the year living in a different location. This is because Medigap insurance plans provide coverage for you at any hospital or with any doctor that accepts Medicare. The vast majority of hospitals and doctors do accept Medicare coverage, meaning you’ll be covered no matter where you are at the time services are provided.

Medigap may also be extra appealing to those of you who prefer to continue existing relationships with your primary care physician, specialists, or hospitals, as you do not have to stay in a specific network to see providers.

If you're unsure whether to choose Medicare Advantage vs. Medicare Supplement, you're not alone. Many individuals consult a local Medicare expert to help determine which plan will work best for them. And, even if you believe you know which plan suits you best, it's wise to talk with experts who will share the information for you at no cost.

Speak with a trusted local adviser today.

If you're like many people, you may need assistance to sort out the best plan for you. Speak to a state-licensed Medicare specialist in your area for free. You'll get your questions answered and feel confident that you are signing up for the best plan for you.