Medicare Supplement (Medigap) or Medicare Advantage? This is one of the most often asked questions people have when talking about Medicare.
Medicare Supplements and Medicare Advantage Plans are not the same. Medicare Supplements enhance Original Medicare while Medicare Advantage Plans replace Original Medicare.
Medicare Advantage Plans
These plans are offered by private insurance companies and approved by Medicare. Medicare pays these companies to cover your Medicare benefits.
Plans may vary from state to state, and county to county and can have different monthly premiums, copayments, coinsurance, and deductibles.
Medicare Advantage plans have a network of doctors, hospitals, and labs that you must use in order to maximize your cost savings. In most cases, if you go outside your plan’s network, you will pay higher copayments, coinsurance, and deductibles.
Medicare Advantage is like going to an a la carte restaurant. You pay for what you use.
- You may pay a copay to see a doctor
- You will pay a copay to see a specialist
- You will pay a copay emergency room visit
- You will pay a copay for ambulance services
- You will pay a copay for a hospital admission
Plan benefits, copayments, coinsurance, deductibles, and premiums, along with doctor and hospital networks may change every year.
Medicare Supplement Plans
Medicare Supplement plans are also offered by private insurance companies and help pay some or all of the health care costs that Original Medicare does not cover.
There are no networks and you may go to any doctor, hospital, or lab that accepts Medicare anywhere in the United States which makes them perfect for snowbirds and any other people who enjoy traveling.
Plans are standardized; meaning all plans with the same letter must offer the same benefits. The only difference in any plan with the same letter is the monthly premium a company may charge.
Plans are designed to cover some or all of the gaps in Original Medicare. The most comprehensive supplement plan is Plan F, which covers 100% of all Medicare-approved expenses. There are no copayments, coinsurance, or deductibles.
To use the restaurant analogy, a Medicare Supplement plan is like going to the buffet. You pay one price and you can select any of the items on the menu.
What plan is the right plan for you?
When choosing between a Medicare Supplement Plan and a Medicare Advantage plan the first question you need to ask is, will my doctor and hospital accept the plan I am considering? There are doctors and hospitals that accept Medicare but will not accept a particular Medicare Advantage plan. On the other hand, if your doctor or hospital accepts Medicare, in most cases they will accept your Medicare Supplement plan.
Insurance is about managing risk. Generally, with a Medicare Advantage plan, you have a lower monthly premium but higher financial risk.
With a Medicare Supplement, you generally have a higher monthly premium but lower financial risk.
One final note: You cannot have both a Supplement plan and an Advantage plan. You must purchase one or the other.
Medicare can be confusing. I can provide you with the information you need to make an informed decision and help you find the plan that will fit your budget and that meets your unique needs.
I make the complex simple by shopping the plans and rates for you. There is never a fee and you are under no obligation to use my services.
Medicare Explained in Plain English