Medicare Advantage vs Medicare Supplement: Key Differences Explained

Approaching Medicare enrollment means making important choices about health coverage. Two popular options for supplementing Original Medicare are Medicare Advantage (Part C) and Medigap . While both provide extra coverage, these two plan types differ significantly in how they work.

Understanding the key contrasts between Medicare Advantage and Medicare Supplement Plans makes it easier to decide which approach may be a better fit for your needs.

How Medicare Advantage and Medigap Differ from Original Medicare

Original Medicare consists of Part A, which covers hospital services, and Part B, which covers doctor visits and outpatient care. Most enrollees pay no premium for Part A but do pay a monthly premium for Part B coverage.

Original Medicare beneficiaries are responsible for certain out-of-pocket costs like deductibles, coinsurance, and copays. And there are gaps in what Parts A and B cover, like dental, vision, hearing, and prescription drugs.

This is where Medicare Advantage and Medigap come in:

• Medicare Advantage Plans may include all the coverage of Parts A and B and often more. Medicare Advantage Plans are offered by private insurers approved by Medicare.
• Medigap – Also known as Medicare Supplement Insurance, these policies help fill gaps in costs left by Original Medicare like copays and deductibles. Medigap Plans are offered by private insurers.

Both Medicare Advantage and Medigap give you options to access more healthcare coverage than sticking with only Original Medicare. But the way they provide supplemental coverage differs.

Key Differences Between Medicare Advantage and Medigap

While Medicare Advantage and Medigap Plans share some characteristics, they vary significantly in how they operate and what they cover. Some of the key differences include:

Coverage

• Medicare Advantage bundles all of your Part A and Part B benefits into one plan. Many plans also include Part D prescription drug coverage.
• Medigap only covers specific gaps in Original Medicare like copays, coinsurance, and deductibles. You still need Part D for drug coverage.

Costs

• Medicare Advantage Plans have a monthly premium that varies by plan along with copays and deductibles for care. Maximum out-of-pocket limits provide financial protection.
• Medigap Plans charge a monthly premium. Costs vary widely based on the level of coverage and location. There are typically little to no copays or deductibles.

Providers

• Medicare Advantage Plans usually have a network of approved doctors, hospitals, and facilities you must use to get the maximum coverage. Referrals are often required to see specialists.
• Medigap has no network restrictions. You can see any healthcare provider that accepts Medicare. No referrals needed to see specialists.

Benefits

• Medicare Advantage Plans frequently include extra benefits not covered by Original Medicare like dental, vision, hearing, and more. Benefits vary by the plan.
• Medigap only covers gaps in Original Medicare costs. It does not provide dental, vision, hearing, or other extra benefits.

Prescription Drugs

• Most Medicare Advantage Plans include Part D prescription drug coverage with the exception of Medical Savings Accounts and some Private Fee-for-Service plans.
• Medigap does not cover prescription medications. You need to purchase a separate Part D Plan.

Travel Coverage

• Medicare Advantage Plans only cover emergency and urgent care outside of your service area. Medigap offers nationwide coverage for all Medicare-approved care.

Clearly evaluating these key differences allows for determining which type of plan better addresses your specific healthcare and coverage needs.

Medicare Advantage Plan Options

Medicare Advantage Plans must provide at least the same level of coverage for everything included under Parts A and B of Original Medicare. But plans can structure benefits and costs differently within guidelines set by Medicare.

There are a few main types of Medicare Advantage Plans:

• HMO – Health Maintenance Organizations offer managed care plans with lower costs but more limited networks of providers. Referrals are required for specialists. These are the most common type of Medicare Advantage Plans.
• PPO – Preferred Provider Organizations allow use of out-of-network doctors for a higher cost. You pay less when using in-network providers. PPOs offer more flexibility than HMOs.
• PFFS – Private Fee-for-Service plans let you visit any Medicare-approved provider like Medigap as long as they agree to treat you. These are less common than HMO and PPO Medicare Advantage Plans.

In addition, Medicare Advantage offers Special Needs Plans that cater to specific audiences like people with certain chronic conditions. These SNP plans have customized benefits.

All Medicare Advantage options bundle Parts A and B and often Part D into a consolidated plan. The flexibility to see specialists or use out-of-network providers varies.

Medicare Supplement Plan Choices

While Medicare Advantage Plans are structured around managed care models, Medigap functions more like an a la carte menu. You pick the Medigap policy that offers the right mix of benefits you want.

Medicare Supplement Insurance plans are identified by letters – Plan A through Plan N. Each plan covers a specific set of benefits, with some overlap. Two of the most comprehensive choices are Plan F and Plan G:

• Plan F – Covers all Medicare deductibles, coinsurance, and copays. Offers the broadest Medigap coverage available.
• Plan G – Identical to Plan F except does not cover Medicare Part B deductible. This makes it slightly cheaper than Plan F.

The other plans offer various combinations of supplemental coverage. Plan A is the most basic while Plan B adds more benefits.

Keep in mind that Medigap policies only supplement your Original Medicare coverage. You cannot use a Medigap Plan by itself. If you want drug coverage, a separate Medicare Part D Plan is required.

When Can You Enroll in Medicare Advantage or Medigap?

Medicare has specific enrollment rules and deadlines for joining Medicare Advantage and purchasing Medigap policies.

Medicare Advantage

• When first eligible for Medicare, you can select a Medicare Advantage Plan
• Between October 15 to December 7 each year, you can join or switch Medicare Advantage Plans during open enrollment
• From January 1 to March 31, you can switch plans or return to Original Medicare

Medigap

• The best time to buy a Medigap policy is during your six month Medigap open enrollment period when first enrolling in Medicare Part B
• Outside this window, insurers can deny coverage or charge higher premiums based on health status
• You cannot purchase a new Medigap Plan once enrolled in a Medicare Advantage Plan

Understanding these enrollment periods helps ensure you gain access to the supplemental coverage you want.

How Do You Pay for Medicare Advantage and Medigap?

Both Medicare Advantage and Medigap involve certain premiums and out-of-pocket costs:

Medicare Advantage

• Plans charge a monthly premium (average is $19 per month)
• You must continue paying your Part B premium
• Copays, coinsurance, or deductibles apply for services
• Out-of-pocket maximum limits costs each year

Medigap

• Policies charge a monthly premium ranging from around $100-$200 on average
• You must continue paying your Part B premium
• Little to no copays or deductibles depending on plan purchased
• No annual out-of-pocket maximum

Medicare Advantage premiums tend to be lower, but you could pay more overall for services. Medigap has higher premiums but copays and deductibles are minimal or none.

Should You Choose Medicare Advantage or Medigap?

There are excellent reasons to consider both Medicare Advantage and Medigap Plans. Here are a few key factors to help decide which meets your needs:

• Do you want predictable copays and protection from large medical bills? Medicare Advantage offers annual out-of-pocket limits.
• Is it critical your doctor or hospital accepts your insurance? Medigap allows access to any provider that takes Medicare.
• Do you need comprehensive coverage like dental and vision? Many Medicare Advantage Plans include extra benefits excluded from Medigap.
• Will you need referrals for specialists? Medigap allows seeing any specialist without referrals.
• Is keeping premium costs down most important? Medicare Advantage Plans often have $0 premium options.

Take your time exploring all Medicare coverage options during open enrollment. Weighing plan costs, benefits, and how each fits with your healthcare preferences makes choosing between Medicare Advantage and Medigap more clear.

We’re Here to Help

You do not have to spend hours reading articles on the internet to get answers to your Medicare Questions. Give Green Insurance Agency a Call at 904-717-1176. You will get the answers you seek in a matter of minutes, with no pressure and no sales pitch. We are truly here to help.

FAQS

What is the difference between a Medicare Advantage Plan and a Medigap or Medicare Supplement Plan?

Medicare Advantage Plans and Medigap (or Medicare Supplement) plans are two types of private health insurance plans that can be used in addition to your Medicare Part A and Part B coverage. The main difference is that a Medicare Advantage Plan replaces your Original Medicare coverage, while a Medigap Plan works alongside your Original Medicare to help cover certain out-of-pocket costs.

What do Medicare Advantage and Medicare Supplement insurance plans offer?

Medicare Advantage Plans offer an alternative to Original Medicare, providing all of your Part A and Part B benefits through a private insurance company. These plans often include additional benefits such as prescription drug coverage, vision, dental, and hearing care. On the other hand, Medicare Supplement Plans help pay for some of the costs that Original Medicare doesn’t cover, such as deductibles, co-payments, and co-insurance.

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

Yes, you can switch from a Medicare Advantage Plan to a Medicare Supplement Plan if you meet certain eligibility requirements and if the Medicare Supplement Plan is available in your area.

What is Medicare Part C?

Medicare Part C, also known as Medicare Advantage, is a type of health insurance plan offered by private insurance companies. These plans provide all of your Part A and Part B coverage, and often include additional benefits such as prescription drug coverage, vision, dental, and hearing care.

What is Medicare Part D?

Medicare Part D is a prescription drug coverage plan offered by private insurance companies. It helps lower the cost of prescription medications for people with Medicare.

Can I have both a Medicare Advantage Plan and a Medicare Supplement Plan?

No, you cannot have both a Medicare Advantage Plan and a Medicare Supplement Plan at the same time. These two types of plans cannot be used together to cover the same costs.

Can I join a Medicare Advantage Plan if I already have other health insurance?

It depends on the type of health insurance you have. If you are currently enrolled in Original Medicare and have other health insurance, such as through an employer or union, you may still be able to join a Medicare Advantage Plan.

What is Medigap insurance?

Medigap insurance, also known as Medicare Supplement insurance, is a type of private insurance policy that helps pay for some of the costs that Original Medicare doesn’t cover, such as deductibles, co-payments, and co-insurance.

What is the best Medicare Plan?

The best Medicare Plan for you depends on your individual health needs and preferences. It’s important to compare different plans and consider factors such as cost, coverage, and additional benefits before choosing a plan.

Are Medicare Advantage Plans offered by all insurance companies?

Medicare Advantage Plans are offered by private insurance companies that are approved by Medicare. However, not all insurance companies offer Medicare Advantage Plans in all areas. It’s important to check with individual insurance companies to see if they offer plans in your location.