Medicare Advantage vs. Medicare Supplement

Medicare Advantage and Medicare Supplement plans are both popular ways for seniors to get health insurance coverage through the federal government. However, these two plans differ in important ways, so individuals must understand their differences before deciding which plan is right for them.

Medicare Advantage Plans

Medicare Advantage, or Medicare Part C, is an alternative way to get Medicare benefits through private insurance plans approved by Medicare. These plans must offer at least the same level of coverage as Original Medicare (Part A and Part B). Still, they often include additional benefits, such as dental, vision, and hearing coverage, wellness programs, and prescription drug coverage (Medicare Part D). In many cases, Medicare Advantage plans also have a network of healthcare providers, such as doctors, clinics, and hospitals, and they often require that you use these providers. This can limit your choice of healthcare providers to those in the plan’s network, although you may be able to see providers outside the network if you pay extra.

How Much Does Medicare Advantage Cost?

Medicare Advantage plans vary in cost, but most usually have monthly premiums, deductibles, and copayments or coinsurance for each service you receive. Some plans may also have an annual out-of-pocket maximum, which limits your total spending on covered services during a year. Additionally, you must continue to pay your Medicare Part B premium if you enroll in a Medicare Advantage plan.

Who Should Consider a Medicare Advantage Plan?

People should consider a Medicare Advantage plan if they are looking for one that offers additional benefits beyond what Original Medicare covers. This includes dental, vision, and hearing care coverage, wellness programs, and prescription drugs. A Medicare Advantage plan could be a good fit if they are comfortable with staying within a network of healthcare providers and potentially paying extra for out-of-network services.

Medicare Supplement Plans

Medicare Supplement, or Medigap, plans are designed to fill the “gaps” in coverage left by Original Medicare. Private insurance companies offer these plans and can help cover deductibles, copayments, and coinsurance costs. Unlike Medicare Advantage plans, they do not offer additional benefits beyond what Original Medicare provides.

How Much Does a Medicare Supplement Plan Cost?

Medicare Supplement plans often have higher monthly premiums than Medicare Advantage plans, but they also typically have lower out-of-pocket costs. Some Medigap policies may cover your copayments and deductibles, leaving you with no additional charges.

Who Should Consider a Medicare Supplement Plan?

Medicare Supplement plans are best for those who want to keep their current doctors and have freedom in choosing healthcare providers. These plans also work well for individuals who travel frequently, as most Medigap policies offer coverage outside the United States.

Key Differences Between Medicare Advantage and Medicare Supplement

• Coverage: Medicare Advantage plans may offer additional benefits beyond what Original Medicare provides. In contrast, Medigap policies only cover costs not covered by Original Medicare.
• Cost: Medicare Advantage plans often have lower monthly premiums than Medigap policies but may also have higher out-of-pocket costs. Medigap policies, on the other hand, typically have higher monthly premiums but lower out-of-pocket costs.
• Network: Medicare Advantage plans often have a network of healthcare providers and may require that you use these providers. In contrast, Medigap policies allow you to visit any doctor or hospital that accepts Medicare patients.
• Prescription Drug Coverage: Most Medicare Advantage plans include prescription drug coverage (Medicare Part D), while Medigap policies do not. If you have a Medigap policy, you must enroll in a separate Medicare Part D plan for prescription drug coverage.

What Plan Should You Get?

Deciding between a Medicare Advantage plan and a Medicare Supplement plan largely depends on your healthcare needs, budget, and lifestyle. Choosing a Medicare Advantage plan could be a good fit if you want additional benefits not covered by Original Medicare, such as dental, vision, and hearing care. These plans are also valuable if you’re looking for prescription drug coverage without enrolling in a separate Part D plan. However, you should be comfortable with staying within a network of healthcare providers and potentially paying more out-of-pocket costs.

On the other hand, a Medicare Supplement plan may be more suitable if you want the freedom to choose any healthcare provider that accepts Medicare patients without restrictions from a network. A Medigap policy could offer valuable coverage if you travel frequently, especially outside the U.S.. The higher monthly premiums of Medigap policies are often offset by lower out-of-pocket costs and a comprehensive range of Original Medicare’s gaps.

Bottom Line

Medicare Advantage and Medicare Supplement plans offer additional benefits that Original Medicare does not cover. However, the key differences in coverage, cost, network, and prescription drug coverage make each plan unique. It is essential to carefully evaluate your options and consult with a healthcare professional before deciding. Ultimately, the right plan for you depends on your needs and preferences.

Sources: What is a Medicare Supplement Plan? – What is a Medicare Advantage Plan?

FAQ

What is the difference between Medicare Advantage and Medicare Supplement?

Medicare Advantage plans may offer additional benefits beyond what Original Medicare provides, while Medigap policies cover the gaps from Original Medicare.

How much do Medicare Advantage and Medigap plans cost?

Medicare Advantage plans may have lower monthly premiums but may have higher out-of-pocket costs. In contrast, Medigap policies have higher monthly premiums but lower out-of-pocket costs.

Who should consider a Medicare Advantage plan?

Medicare Advantage plans are best for those who want more benefits than Original Medicare, such as prescription drug coverage or dental and vision care.

Who should consider a Medigap policy?

Medicare Supplement plans are best for individuals who want to keep their current doctors and have freedom in choosing healthcare providers. They also work well for frequent travelers, as most Medigap policies offer coverage outside the United States.