It’s beneficial to understand Medicare Advantage vs Medicare Supplements since those are the two main plan options. You’re not alone in your research; many beneficiaries compare Medicare Advantage and Medicare Supplements to see, which will reduce their costs the most.
We understand the details of Medicare can change anytime. We update content frequently to keep you well informed.
The content on this page matches the 2020 Medicare rules and regulations.
Some questions to consider while you analyze this information:
- Do you plan to travel?
- Are you willing to change doctors?
- Do you want to have predictable costs?
- What’s most important to you when it comes to your insurance?
What is the Difference Between Medicare Advantage vs Medicare Supplements
Those new to Medicare may notice an unfair promotion of Medicare Advantage plans. Well, we prefer a non-biased approach. Depending on your lifestyle, budget, and medical coverage needs, one plan will be more suitable than the other.
Medicare Advantage plans are offered through private insurance companies. These companies are paid by Medicare to take on your risk. They must offer the same benefits of Medicare, and can also add additional benefits. When you join a Medicare Advantage plan, you agree to pay higher out of pocket costs in the form of cost-sharing in exchange for lower monthly premiums. They also come with a very restricted network of doctors and will not travel with you. The biggest complaint we hear from our clients is they are unable to accurately predict their out of pocket costs when they used their Advantage plans.
Medicare Supplements are also offered through private insurance companies. They will cover the same exact services as Original Medicare. They pick up the remaining cost-sharing that you would normally be responsible for if you didn’t have any form of supplemental Medicare coverage. Unlike Medicare Advantage, you’ll never have to pay any copays with Medicare Supplements. These types of supplemental Medicare plans give you the ability to predict your costs. They also have a much larger network of doctors and will travel with you. You cannot join a Medicare Supplement plan if you have a Medicare Advantage plan.
What are the Pros to Medicare Advantage vs Medigap?
First, let’s go over the benefits of Advantage plans. Part C plans look like an all-in-one option. Most policies are $0 a month. Many Part C plan options include Part D, dental, vision, and more. At first glance, Part C seems like a dream come true.
Now, we can take a look at the perks of Medigap. Supplement policies give you the freedom to choose any doctor in America that accepts Medicare assignment. You’ll never need a referral with a Medigap plan. Further, Medigap covers foreign travel emergencies, extra days in the hospital, and the coinsurances you’d otherwise pay. When a severe condition develops, or emergency takes place, Medigap is the safety net you want.
What are the Cons to Medicare Advantage vs Medicare Supplements?
On the surface, Advantage plans are appealing. But, what’s great about having a narrow network of doctors? In the future, a strict doctor network could be nothing short of frustration. Further, most Advantage plans don’t cover you outside the service area. So, you could pay 100% of the bill for the care you accept out of state. While the plans include dental, vision, and hearing, the benefits are basic. Most policies don’t include comprehensive dental care. Also, you may need a referral to see a specialist with most Advantage plans. With all the rules and regulations, it raises the question, “are Medicare Advantage plans bad?”
Now, for Medigap, the list of cons is much smaller. Medicare Supplement plans don’t include Part D or other ancillary benefits. Further, Medigap plans can have a high premium depending on the policy and location of the beneficiary.
We understand Medicare is a complex web of details; so, I’m going to tell you a few possible scenarios to display the differences of Medicare Advantage vs Medicare Supplements.
What is a Real-Life Example of How Medicare Advantage vs Medicare Supplements Work?
Let’s say Rhonda has Medicare Advantage.
In the first scenario, I’m going to use Rhonda as an example. Rhonda initially chose Part C because of the low premium costs and Part D benefits on the policy. For the most part, Rhonda has been healthy with no concern about possible copayments.
While Rhonda did her routine lab work and physicals, but, she never worried about paying a massive bill because she didn’t have a severe health condition.
Rhonda chose Part C to save money on premiums. But, Rhonda couldn’t predict a broken hip.
Sure, Part C pays a portion of the bills, but Rhonda didn’t expect to have such high bills sent to her. Seven days in the hospital and one major surgery later, she meets almost meets her Maximum Out of Pocket.
- $300 for the ambulance
- $500 each day for days 1- 6 in the hospital or $3,000 total
- 20% of the surgery cost
- $40 for every physical therapy visit
- and so much more
So, while Rhonda may save a couple of bucks a year in premium costs, is it worth it to pay this much when something does go wrong? Or is it worth it to buy Medigap?
Since I know you love reading a good scenario, let’s take a look at how Medigap would help if Rhonda chose Medigap instead. Then, you’ll be closer to understanding which option will make the most sense for you!
Now, Let’s say Rhonda has Medigap Plan G.
Since Rhonda has a Medigap Plan G, her main concern is her monthly premium and the Part B deductible. Beyond that, Rhonda doesn’t worry about the costs.
Allow me to explain. See, Medicare covers a portion of the costs, and instead of Rhonda paying the other part, her Medigap plan pays. It’s that simple.
So, if Rhonda breaks her hip and has Medigap Plan G, her costs are less. If Plan G ends up costing Rhonda $100 per month, that’s less in annual premiums than she would pay in copayments with Medicare Advantage.
Is It Better to Have Medicare Advantage or Medigap?
Now that you know how each plan works, you’re wondering which is better. Well, let’s keep looking at Rhonda’s scenario.
The thing is, Rhonda isn’t guaranteed to break her hip. So, if Rhonda goes the year without any significant issues, the Medicare Advantage plan really could’ve saved her some money.
But, if Rhonda has a major health emergency, the Medigap plan offers the most protection. So, the question is, which option is better for you?
Will you take a gamble on good health with a Medicare Advantage plan? Or, will you sleep well knowing that IF something goes wrong, you have the coverage you need?
It has never been about which is the best; it’s about the option that’s best for you. Our recommendation will always be Medigap because we know at the end of the day, having the coverage you need is better than having just a low premium.
How Do I Choose Between Medicare Advantage and Medigap
Do you want predictable costs, the freedom to choose any doctor that accepts Medicare, to avoid referrals, and have coverage while traveling? If you answered “Yes” to those questions, you want Medigap. Are you okay with unpredictable copayments, strict doctor networks, and referrals? What if it includes Part D? If you answer “Yes” to these questions, Medicare Advantage could work for you.
The best part about working with agents that don’t care which option you choose? Well, the non-biased recommendations, of course! First, our agents can answer all your Medicare questions. Then, when you work with your agent, they’ll ask you a few questions to better understand your needs.
Once they know what you’re looking for, they can make a recommendation based on your situation. For example, if you’re looking for a Medigap plan that saves you money on premiums, our agents can make a few suggestions. But, of course, if you’re looking for Medicare Advantage type coverage, we can help too.
Give us a call at the number above to learn about your best plan options today! Or, fill out an online rate form to compare rates now!