Medicare Advantage vs. Medicare Supplement Plans

What’s better for me? Medicare Advantage or Medicare Supplement Plans

One of the most common Medicare questions asked is regarding Medicare Advantage Plans and Medicare Supplement Plans and what the differences are between them. This post serves as a guide to help you decide which plan is right for you.

Medicare alone does not cover all expenses; there are still deductibles and co-payments that must be paid out-of-pocket. These uncovered expenses can really add up to hefty numbers. Enter Medicare Advantage and Medicare Supplement plans. Both types of plans work to bridge this coverage gap, but the policies differ from each other in a few ways. It is important to understand the key differences between the two so you can choose the right plan for your insurance. We’re here to clear up the differences between the two so you can get the best health insurance coverage.

Understanding Medicare Advantage

Medicare Advantage plans are private insurance plans that work with specific care providers. With Medicare Advantage, you pay very low premiums (sometimes no premium) while agreeing to use the plan’s provided doctors and hospitals except in emergencies. Most offer coverage for vision, dental and hearing care as well as for prescription drugs. Some plans even include gym memberships (Silver Sneakers). In order to qualify for a Medicare Advantage plan, you must be enrolled in Medicare Part A and Part B. While you don’t necessarily have the freedom to choose your own providers, you are shaving off money spent on healthcare costs.

Medicare Advantage plans are the less expensive option compared to Medicare Supplement plans. Most of them also include Part D coverage, meaning prescription drugs are covered. This could serve as a great advantage if you have lots of prescription drugs that can add up to a high cost. Medicare Advantage plans also have an Out-of-Pocket Maximum Cap of $6,700. This means that once you reach this out-of-pocket maximum, insurance will cover the rest of your medical expenses for the rest of the year. If you have a serious illness, you will likely have to pay close to $6,700. Depending on your health condition, you may not reach that number. Be sure to consider your medical conditions and financial circumstance when choosing between plans.

Because private insurance companies are free to design their Medicare Advantage plans, there are lots of variations on this type of plan. Some plans come with great varieties of providers, while other plans offer very limited providers. Some offer more coverage than others. Be sure to research every feature of each Medicare Advantage plan that you are considering. Remember we are always here to help. Some policies even come with dental, vision and hearing coverage. For a more in-depth look at Medicare Advantage (or Medicare Part C) make sure to check out our in depth post. 

Understanding Medicare Supplement Plans

Also known as Medigap plans, Medicare Supplement plans are designed to work alongside your Original Medicare plan. The rest of your healthcare bill that is left after Medicare pays its part is sent to the supplement company to pay. This leaves you with no claims to file or forms to fill out.

One of the biggest advantages of this type of plan is the flexibility that it allows you to have. You have the freedom to choose the providers, doctors and hospitals that best fit your needs. No referral is required in order to see a professional with a Medigap plan. This convenient flexibility comes at a higher price point, however.

Medigap plans vary widely in price, depending on your location, age, health conditions and other factors. Overall, they have higher premiums than Medicare Advantage. It is also important to note that unlike Medicare Advantage, Medigap plans do not cover retail medicines; they only cover drugs provided at a hospital, like injections or chemotherapy. If you do choose the Medigap plan, it is possible to enroll in a separate Part D card that will provide more coverage for prescriptions. These normally have a cost of about $25-40 per month.

Choosing Between Medicare Advantage and Medicare Supplement Plans

When trying to decide which plan is best for you, there are lots of factors to consider. Each person’s healthcare needs are different, so what works for your friend or neighbor may not work for you. Here are some top things to consider when choosing a policy:

How often you use healthcare services

If you use healthcare services often or use a wide variety of healthcare services, Medicare Supplements may be the best option. It offers fuller coverage and gives you more choices in healthcare providers. If you have a serious illness like cancer, Medicare Advantage may require you to pay up to $6700 for the OOP Maximum Cap. This hefty fee is eliminated with a Medicare Supplement Plan.

If you want prescription drugs covered

Most Medicare Advantage plans offer coverage for prescription medicines. Medicare Supplements, however, do not provide this coverage. As previously mentioned, it is possible to get a Part D card to go along with your Medicare Supplement plan in order to have prescription drugs covered.

How important flexibility is to you

If flexibility is important to you, a Medicare Supplement Plan may be your best bet. Under this plan, you can see any doctor or healthcare professional of your choosing. If you do decide to go with a Medicare Advantage plan, be sure to choose one that has a wider variety of providers for you to choose from. Check to make sure your doctors are in the plan’s network.

Another important thing to note is that it can be difficult to switch between Medicare Advantage and Medicare Supplement Plans. Medigap plans have a one-time initial enrollment window in which they openly accept your application without asking any health questions. If you switch from Medigap to Medicare Advantage, you may not be able to get back on the Medigap plan. After the open enrollment window is up, insurance companies can ask questions about your health. They can decline you based on your conditions. Be aware of this if you are considering switching plans!

As you can tell, there are some acute differences between Medicare Advantage Plans and Medicare Supplement Plans. Choosing the right plan may seem confusing or intimidating, so it is important to consider your financial and medical needs. Doing research and talking with healthcare experts can help you choose the best plan. If you’re looking for more specific guidance, please send us a message. We would be happy to help you weigh your Medicare options.

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