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What is the Difference Between Medicare Advantage vs Medicare Supplements?

When you are new to Medicare, it is important to understand the difference between a Medicare Advantage Plan and a Medicare Supplement plan also known as a Medigap plan.  Picking your Medicare insurance coverage is a critical choice that affects both your health and wellbeing. You have alternatives when it relates to Medicare coverage, which is beneficial and yet can be overwhelming. 

Original Medicare covers your essential outpatient and inpatient medical requirements and is known as your Part A and Part B coverages.  In addition to Part A and Part B, you will need to make sure you also sign up for Part D which is your prescription drug coverage.  You may wish to add insurance for vision and dentistry or you could decide to self-insure these two items.

You’ll also have to pay insurance premiums, copayments, deductibles, and co-insurance related towards your medical expenditures if you only have Original Medicare.  Due to the gaps left behind by Original Medicare, you will need to decide whether to purchase a separate Medicare Supplement aka: Medigap plan or leave Original Medicare and sign up for a Medicare Advantage Plan.  While these two choices may not seem like major decisions, your choice can have a major impact on your overall healthcare options.

Future Outlook of Advantage Plans

Medicare Advantage Plans: What You Should Consider

Medicare Advantage plans is a offered by private insurance companies.  It is an alternative to obtain your health insurance coverage through Original Medicare. Here’s a rundown of Medicare Advantage’s benefits, prices, and eligibility requirements. These plans include everything that Original Medicare does, such as:

  • Hospitalization
  • Doctors’ office visits
  • Specialist visits
  • Outpatient surgeries
  • Emergency room visit
  • Hospice Care
  • Skilled nursing facility care
  • Home health care
  • Durable Medical Equipment
  • Ambulance

 

Based on your Medicare Advantage plan, you might also be covered for:

  • Basic Dental with options to purchase a compressive plan
  • Basic Vision
  • Subscriptions at gym
  • Travel expenses covered to and from doctor visits
  • Help with your Pet
  • Pest control
  • House Keeping
  • Groceries

What is the Cost Associated with Medicare Advantage Plans?

Medicare Advantage rates, like every insurance program, vary based on the insurance companies that are available, the location of your home, and the plan you select. While we understand the cost may be your primary focus related to a monthly premium, there are other cost’s that need to be considered as well.

Expenses such as deductibles and copays will also vary depending on the plan. As your Medicare Advantage plan only includes one Part D prescription drug plan, you will also need to compare this cost between plans and insurance companies.

Following are a few Factors that will impact your Medicare Advantage plan costs throughout the plan year:

  • Frequently of use?
  • Copays
  • Deductibles
  • Co-insurance
  • Annual Max Out of Pocket Cost: Plan Year 2021
    • HMO Plans: Up to $7,550 in-network and 100% of cost out of network
    • PPO Plans: Up to $7,550 in-network and $11,300 out of network
  • Where you obtain your treatment (in network or out of network)
  • Your annual income
  • If you get financial help such as Medicaid or if you have a handicap

As mentioned, most Medicare Advantage plans will include your Part D prescription drug coverage.  It is important to factor in your drug cost associated with each plan.  This includes what tier each of your prescription drugs fall under and the associated copy or co-insurance.

Qualification for Medicare Advantage

To sign up for Medicare Advantage, you must meet the following requirements:

  • You are required to sign up for Medicare Part A and Part B before you can enroll into a MAPD plan or a Medicare Supplement Plan.
  • You must reside within a Medicare Advantage provider’s service area that offers the medical services you choose and is enrolling new customers during your registration period.

What You Should Consider About Supplement Plans for Medicare

A Medicare supplement policy aka: Medigap plans do not require you to leave Original Medicare but rather fills in the gaps.  These insurance policies allow Medicare Beneficiaries to establish a monthly budget related to their health insurance cost with no surprises.  These plans are regulated by the US Government and are not allowed to change from year to year.  

While a Medigap plan is optional, it is highly recommended so you are not faced with medical bills that can total into the millions of dollars.  Find out a little more about Medigap insurance, pricing, and qualification in the sections below.

Medigap Chart 2021

Medigap insurance

Medigap insurance helps cover the expenses not covered by Original Medicare. These expenses might include:

  • Deductibles, Coinsurance, and hospitalization fees under Medicare Part A
  • Costs associated with Medicare Part A hospice reimbursement or co-payments
  • Costs of Medicare Part B deductibles, coinsurance and copayments
  • Costs of blood transfusions for the first three pints
  • Deductibles and co-pays for skilled nursing facilities
  • Excess charges allowed under Medicare Part B
  • Emergency Medical expenses incurred while travelling abroad

There is a total of ten Medigap plans that are currently available.  These plans are identified as an individual letter.  Here are the ten letter Plans A, B, C, D, F, G, K, L, M, and plan N.

Part B deductibles are no longer allowed to be covered by newly acquired Medigap policies starting of January 1, 2020. Should you turn 65 years old and become eligible to enroll into Medicare in 2020 or later, you will be unable to acquire Plan C or Plan F depending on which of these two plans are available in your specific State. These two plans are still available for Medicare Beneficiaries who turned 65 prior to January 1, 2020 and wish to enroll into one of these two plans.

How Much do Medigap Insurance Policies Cost

The cost of Medicare insurance is determined by your qualification and the sort of protection you choose. The more protection you desire, the more expensive Medicare Supplement packages get. Furthermore, the older you are while you join, the higher your cost will be. The following factors may have an effect on the prices of your Medigap insurance:

  • Current Age (the older you are the higher the insurance premium will be each year)
  • The Medigap Plan you Select (Plan F vs Plan G vs Plan N)
  • Eligibility for discount
  • Medical Conditions if outside of your Guaranteed Eligibility Period

Eligibility for Medigap Coverage

You are eligible to apply for Medicare during your initial enrollment period.  This period starts three months prior to turning 65 years old, the month of your 65th birthday, and three months after your birthday.  During this time you are able to enroll into a Medicare advantage plan or remain on Original Medicare and purchase a Medigap insurance plan. 

During this 7-month window, you are in your guaranteed issue period.  This means Medicare supplement insurance companies are unable to base their premiums on your current health conditions.  In addition, during this period they cannot turn you down for coverage.  In order to sign up for a Medigap plan, you are required to sign up for Medicare Part A and Medicare Part B.

Medicare A,B,C,D
What are the differences among Medicare Advantage Insurance and Medicare Supplement Insurance?

Medicare Advantage

Medicare Advantage plan are provided by private insurance companies.  These Medicare Advantage insurance companies are paid by the government a fixed monthly amount for each Beneficiary that joins these plans.  In doing this the government caps their losses and transfers the risk onto the private insurance companies to manage your health care needs. 

When you join a Medicare Advantage company you agree to give up your rights under Original Medicare and transfer those rights to the private health insurance company.  This can mean, being limited to a network of doctors, hospitals, and medical facilities.  In addition, you agree to have copays, coinsurance, and deductibles along with a max out of pocket cost.

You will be limited to a single Part D prescription drug plan that is included under the Medicare Advantage plan.   Medicare Advantage plans are also known as Part C designs.

Medicare Supplement Plans

Medicare Supplemental insurance, commonly known as Medigap, are plans that are also provided by private health insurance companies.  Unlike Medicare Advantage plans, you do NOT give up your rights under Original Medicare when you purchase a Medigap plan.  Instead, you remain on Original Medicare and depending on the plan you select, the Medigap plan is required to pay for the things not fully covered by Original Medicare up to 100% of the total cost. 

Medicare Supplement plans are all standardized and do not change from year to year.  This means that you Medigap plan once you sign up for a plan will remain the same forever. 

If you remain on Original Medicare and obtain Medigap plan you will also need to purchase a Part D prescription drug plan.  In doing this you will potentially have access to dozens of Part D plans options from multiple Medicare insurance companies.

As you have remained on Original Medicare, you do not need to obtain referrals to see outside doctors and you can see any doctor or medical facility that accepts Medicare.

Checklist Difference Between Medigap and Advantage Plans
Is Medicare Advantage or Medigap plans better for you?

Knowing your medical needs will help your Medicare Insurance Agent determine which option is best for you. When determining between Medicare Supplement or Medicare Advantage is best for you, consider the following:

  • If you are looking for more of a pay as your use it plans, then a Medicare Advantage plan may be your best option. Many of these plans may not have a monthly premium, low co-payment, deductibles, and co-insurance up to a max out of pocket cost.  These plans can offer additional benefits such as vision, dental, and hearing aids.  Most of these plans are HMO’s and will require you to only use Doctors within their plans network.
  • If you like the ability to see any Doctor and not be tied to a network of Doctors a Medigap plan may be better suited for you. In addition, depending on the Medigap plan you select, you can avoid the backend cost associated with using your plan such as higher deductibles, co-payments, and co-insurance? With a Medigap plan your medical cost can be fixed each month allowing you to budget your insurance cost.  Some Medigap plans include additional benefits such as gym membership.
  • If you travel a lot and want the flexibility to see Doctors outside of an emergency a Medigap plan would work best for you. A Medicare Advantage plan would not allow you to see Doctors or Medicare Facilities that are outside of your Network for non-emergencies.
Is it possible to have both a Medicare Advantage and a Medicare Supplement plan at the same time?

There are two forms of Medicare programs: Medicare Advantage and Medicare Supplement plans. It is not allowed to have both a Medicare Advantage plan and a Medigap plan at the same time. 

Can I switch from a Medicare Advantage Plan to a Medicare Supplement Plan at anytime?

You have the option to switch your Medicare coverage during your Annual Enrollment Period, that extends from October 15th to December 7th of every year. Throughout this time, you can switch from a Medicare Supplement coverage to a Medicare Advantage program if you want to. 

Please keep in mind that when disenrolling from a Medicare Advantage Plan to a Medicare Supplement plan outside of your guaranteed issue period, you will be required to go through full medical underwriting.  The medigap company can deny your coverage depending on your medical conditions.  You can switch from a Medicare Advantage plan to another Advantage plan without medical underwriting

What are the advantages of Medicare Advantage vs. Medigap?

Medicare Advantage Plans

Let’s start with the advantages of Advantage plans. Part C strategies appear to be an all-inclusive plan, that can provide for all of the required coverages to avoid penalties . These plans are known in the insurance industry as MAPD plans as they include your required Medicare coverage and your Part D coverage under a single umbrella.  In addition, some plans include extra benefits for joining their plan that may or may not be included with a Medicare Supplement plan. 

Keep in mind that under a Medicare Advantage plan you are locked into a local network of Doctors, Medical Facilities, and Hospitals.  If you obtain medical attention that is not an emergency, these services may not be covered even if these Doctors accept Medicare.  If prior to joining a Medicare Advantage plan, you have six different Doctors.  It may be possible that no Medicare Advantage plan exist that will cover all these six Doctors and you will be required to pick new Doctors that are included under that network. 

With these plans you are required to have pre-authorization before a procedure can be completed by your doctor or hospital.  These authorizations have been known to take weeks or longer.  In addition, your Advantage plan Carrier can deny coverage that would have otherwise be covered by Original Medicare with a Medigap plan.    

Medicare Supplement Plans

Perhaps we might look at the benefits of Medigap insurance plans. Medicare Supplemental insurance allow you to see any doctor in the United States who accepts Medicare which equals about 98% of all Doctors in the USA. With a Medigap insurance plan, you’ll never need a recommendation or preauthorization to see a specialist or have a medically necessary procedure. Your doctor is empowered to decide what is medically necessary and not the health insurance company.  Furthermore, Medigap covers international travel situations, additional hospital stays, and coinsurances that you would otherwise have to cover. Medigap plans give you as the patient the freedom of choice and the Doctor the ability to do their job without weeks or months of delays.

Medicare Supplement plans are standardized which means they never change.  Unlike, Medicare Advantage plans that change from year to year, you are not required to review your Medigap plan each year as their coverages do not change.

What are the Disadvantages of Medicare Supplements vs. Medicare Advantage

Disadvantages of Medicare Advantage  Insurance

Medicare Advantage plans can appear to be enticing on the outside. Many Medicare Beneficiaries who have never experienced a Medigap plan, will typically rave about their Medicare Advantage plan.  This is mostly due to the fact that they are relatively healthy. 

As most Advantage plans are HMO plans you are limited to a small number of doctors, medical facilities, and hospitals to choose from.  This means if you get cancer, you will not be allowed to seek help from some of the top cancer facilities as they do not accept Medicare Advantage plans.  They only accept Original Medicare with a Medigap plan.  Many people only discover this once they become sick not when they are healthy.  As a result, you may be able to afford to pay the entire price for out-of-state treatment or out of your local county service area.

The advantages are minimal, even though they may cover basic Dental, Vision, and hearing aid coverage this should not be the reason you go with these plans.  Most plans do not cover full dental treatment or the full cost of a hearing aid.

While most Medicare Advantage plans include Part D coverage, they only give you a single option to choose from.  This can end up costing your thousands of dollars in prescription drug cost. 

Most Advantage plans may also require a referral to see a specialist from our primary care doctor.  They will also require pre-authorization for medical treatment which can take several weeks depending on the medical procedure while you are sitting there in pain.

Disadvantages of Medicare Supplements

The list of disadvantages for Medigap is now significantly shorter. Part D and other auxiliary coverages are not included in Medicare Supplement plans, and must be obtained separately. The primary complaint we hear, is usually around the monthly premium that Medicare Beneficiaries have to pay.   They hear from their neighbor that they don’t pay for their Medicare Advantage plan and they start to wonder why they have to pay a monthly premium. 

What you should know about Medigap insurance

Parts A and B of Medicare are required before you can sign up for a Medigap plan. Medigap coverage differs from a Medicare Advantage Plan in several ways. Medigap insurance simply complements your Original Medicare coverages, whereas Medicare Advantage plans require you to give up your Original Medicare rights and transfer them to the insurance company.

For your Medigap coverage, you are charged a set monthly premium by a private insurance provider. This monthly plan is in addition to the Part B payment you pay into Social Security every month. Only one individual is covered by a Medigap plan however if both you and your spouse are signed up with the same company, you both may qualify for a discount. You can also buy different insurance if you and your partner both want Medigap insurance and another Medicare insurance company offers your spouse a lower rate than yourself.

Medigap coverage can be purchased from a range of insurance provider that is registered and licensed to offer them in your region. Even if you have health issues, any standardized Medigap coverage is guaranteed renewalable once your are covered by a Medicare Supplement plan. This implies that as long as you pay the premiums, your Medigap coverage will not be cancelled.

Prescription medications are covered by several Medigap plans offered in the past. However, prescription medication coverage is not permitted in Medigap policies sold after January 1, 2006. It is important to sign up for a Medicare Prescription Drug Plan if you need drug coverage (Part D) in order to avoid penalties. If you purchase both Medigap and Medicare drug coverage from the same firm, you may be required to pay two premiums. If you’re under a Medicare Advantage Program, it is unlawful for anybody to offer you another Medigap coverage or separate Part D plan.

Side by Side Comparison of Medicare Advantage Plan and Medicare Supplement Plan

Medicare Advantage programs, on the other hand, are an option to Original Medicare. You’re still enrolled in healthcare if you choose a Medicare Advantage plan. Nevertheless, rather than receiving Medicare benefits via the nationally managed program, you’ll receive them via your Medicare Advantage plan, which will take over the role of your Original Medicare program.

 

Medicare Advantage

Medicare Supplement

Can make changes

Required to review Every year, as coverages may increase & decrease each year

Unless there are exceptional conditions, just once in a lifetime.  Coverage remains the same and never changes from year to year.

Monthly premium

As low as $0 and as high as the insurance company can charge.

Usually has a monthly premium based on age and geographical location.

Deductibles

Depends on the Plan you select if it has a deductible and the amount.

Unless you get Plan F or C before the start of  the year, you will have an annual deductible for Part B of $203 (2021 plan year)

Premium Part B

Mandatory

Mandatory

Drugs & Prescriptions

One option Included with MADP plan

Obtained Separately with hundreds of options

Restrictions for service providers

Yes

No

Max Out of Pocket Cost

Up to $7,550

Most plans have no Out of Pocket Cost.

Standardized benefits

Not Available, coverage changes yearly.

Yes, coverage remains the same each year

Co-payments and co-insurance

Co-payments and coinsurance are always required.

May cover all co-payments and coinsurance

 

Which one is better?

Your health insurance needs will determine if you should sign up for a Medicare Advantage or a Medicare Supplement insurance plan. When considering if Medicare Advantage or Medicare Supplement is preferable for you, take these into consideration:

Do you desire to have all your insurance under one plan and for the insurance company to decide what is covered or not covered? If this is the case, a Medicare Advantage Plan could be the best option. Depending on circumstances, many provide Part D medical insurance, as well as additional benefits not included with Original Medicare.

If you want to be protected against out-of-pocket expenses like deductibles, co-payments, and coinsurance? If you have Original Medicare, and purchase a Medicare Supplement plans, these plans can assist in covering some or all of the outstanding out-of-pocket expenditures that regular Medicare does not cover.  With these plans you will have a set budget dealing with your medical cost each year

Integrity Now Insurance Brokers wants to be your Medicare Insurance Agent

When it comes to selecting which Medicare Insurance plan is best for you, we are here to help you navigate through it all.  As you can see there is no one best plan.  Each Medicare Beneficiary we talk with has different medical needs and different must have Doctors and hospitals.  What is right for one person is not right for the other. 

We are centrally located in Long Beach, CA and are here to help you no matter which state you are located in. Please give us a call and we will help you find the Medicare Plan that works best for you.