Medicare Supplement vs Medicare Advantage

Over the last few decades, we have advised thousands of people as they enroll in Medicare. The most commonly shared reaction is one of surprise, as people find out that not only is Medicarenot free, but it actually falls dangerously short of providing the level of coverage that people 65 and up need to stay happy and healthy.

Q: Why do I Need to Supplement my Medicare?

In addition to the constantly increasing cost of Medicare ($1,408 in 2020) services like dental, eye glasses, and hearing aids are not always covered. Medicare also rarely covers prescriptions, which is why Part D has become vital for most individuals.

Medicare Supplement Plans and Medicare Advantage Plans are the two most reliable (& affordable) ways to account for the shortfall. Today, we’re going to take a look at the difference between the two in terms of cost, coverage, and more.

How to Decide Between Medicare Supplement Plans & Medicare Advantage Plans

Because supplement plans and advantage plans are not designed to work together, it is necessary to pick only one. Here are a few questions that you can ask yourself that will help inform the decision:

  1.  Are you willing to choose from a provider network, or do you need to choose your own provider?
  2. Would you rather pay higher monthly premiums with low out-of-pocket costs, or a $0 premium with higher copays and out-of-pocket costs?
  3. Do you want prescription drug coverage included in your plan, or would you prefer to buy it separately?

Once you know the answers to these questions, choosing between Medicare Supplement and Medicare Advantage is quite simple.

Medicare Supplement Plans – Low-Out-of-Pocket Costs

Commonly known as Medigap, Medicare Supplement Plans can help fill the smaller “gaps” in coverage that are present under Original Medicare. Medigap plans are designed to help pay some of the leftover costs of Medicare, including coinsurance, copayments, and deductibles.

Some Medigap plans are designed to cover specific services not offered by Medicare, like those provided while out of the United States.

With a Medicare Supplement plan, you pay a monthly premium to the private insurance company who offers the plan. This is in addition to monthly Part B premium, which is a requirement for any Medigap Plan.

The Pros & Cons of Medicare Supplement Plans

PRO: You can use choose any doctor or provider that accepts Medicare

PRO: Very low out-of-pockets costs (varies by plan)

PRO: Guaranteed renewable, even if you develop health problems

CON: Tends to be more expensive than Medicare Advantage

CON: Prescription coverage is not included (making Part D a necessary add-on)

Medicare Advantage Plans – Comprehensive Coverage with Low Premiums

One of the first things to know about Medicare Advantage plans is that there are tons to choose from. There are HMOs, PPOs, PPFDs, and SNPs among others. Your Personal Benefits Manager can help to explain the difference, but the real takeaway is that Medicare Advantage (also known as Medicare Part C) is a versatile and comprehensive way to add coverage.

With low, sometimes zero-dollar premiums, Medicare Advantage trades high monthly payments for larger copays and deductible. Dental and vision are available in some plans, and the out-of-pocket cap is a big upgrade from Original Medicare.

Overall, Medicare Advantage plans are more affordable than combining a Supplement Plan and Part D to achieve the same level of coverage.

The Pros & Cons of Medicare Advantage Plans

PRO: Some plans are available with $0 premiums

PRO: Prescription drug coverage is included with most plans

PRO: $6,700 out-of-pocket cap for in-network coverage ($10,000 out-of-network)

CON: Must in-network doctors and hospitals

CON: Co-pays and deductibles required for health care services

Expand Your Medicare – Call Today

To sum it all up, Medicare Advantage is a good way to get comprehensive coverage in one plan while also saving more money in the long run than a combination of Medigap and Part D. However, there are plenty of reasons why a Medigap Plan might be the better choice for you.

As you can probably imagine, there is a lot more to these plans than meets the eye. Your Personal Benefits Manager can help you understand the details so you can make the right choice. Call today at 1-800-913-3416 to talk to us, or visit MediGap Advisors to schedule a free consultation.

Wiley Long is founder and president of Medigap Advisors, and is passionate about helping people navigate the confusing waters of Medicare. He is the author of The Medicare Playbook: Designing Your Successful Health Coverage Strategy, a clear and simple explanation so you can make the most of your Medicare coverage.