What You Need to Know About Medicare Advantage Plans vs. Medicare Supplement Plans (Medigap)

There’s a lot to consider when you’re thinking about whether you should stay with your current employer coverage or move to Medicare. You might find yourself considering the differences between Medicare Advantage Plans and Medicare Supplement Plans (Medigap).

It’s essential to know how each plan works to make the most educated choice for your coverage.

What is Medicare Advantage?

Medicare Advantage is essentially an ALTERNATIVE to Original Medicare (Parts A and B) offered by Medicare-approved private insurance companies.

Medicare Advantage Plans offer another way to get your Medicare Part A and Part B coverages. At the same time, a Medicare Advantage plan has to cover at least everything that Original Medicare covers. These plans often have additional benefits and most Medicare Advantage plans will also include drug coverage (Part D). 

In order to enroll in a plan, you do need to have Parts A and B.

When choosing a Medicare Advantage Plan, be sure to verify that your current doctors and providers are in-network with that specific plan. Not every provider who accepts Medicare will be under contract with every plan.

Therefore, if you choose a plan that doesn’t have your doctors under contract, you may either have to pay more for services provided by those out-of-network providers if you decide to enroll in a PPO, or possibly not be able to receive care from any provider that is not part of the plan’s network if you enroll in an HMO plan that doesn’t have out-of-network privileges. 

Although these plans place a limit on out-of-pocket expenses for covered services, the associated costs, including copays and coinsurance, are your responsibility. 

What is Medicare Supplement (Medigap)?

A Medigap policy is another way of covering the 20% of Medicare-covered medical benefits not covered by Original Medicare. It is not the same as a Medicare Advantage Plan and cannot be combined with an MA plan.

With Medicare Supplement plans, your Original Medicare is your primary insurance. The Medicare Supplement may cover many of the remaining costs, including deductibles and coinsurance. Exact coverage is dependent on which plan you choose.

You must be enrolled in Medicare A and B to be eligible to receive Medigap benefits. Additionally, you will pay a private insurance company a monthly premium for your Medicare Supplement policy in addition to premiums you pay to Medicare.

Furthermore, these plans do not cover prescription drugs. You would typically pair this type of plan with a stand-alone Prescription Drug Plan to get your RX coverage. You will pay a private insurance company a monthly premium for this plan as well.

How do I choose the plan that works for me?

When choosing your Medicare plan, you need to consider your lifestyle – as it is now and how you see it progressing in the future. 

Comparing specific plans will provide the final details you need to make your choice. Here are a few factors to consider in your decision-making process:

• Do your doctors participate in any networks?
• Do you travel frequently?
• Are extra benefits offered important to you?

Of course, this is not an exhaustive list of factors to consider. 

The best way to ensure that you’ve chosen a plan that works for you is to meet with Licensed Insurance Consultant who has experience in dealing with Medicare plans. They can lead you through the process to show you what plan – or mix of plans – is right for you.