Medicare Supplement Plans and Medicare Advantage Plans are two programs that share some of the same goals, but are very, very different.
What is a Medicare Supplement (Medigap Plan)?
Medicare Supplement Plans (also known as Medigap) is supplemental insurance sold by private insurance companies that helps to cover some of what traditional Medicare doesn’t cover on its own, which includes things like copays, deductibles, etc.
The plans are standardized by the US government according to letters, which share basic generalities across the country. However, Medigap policies are sold to consumers on Medicare by private insurance. As a result, some plan specific details, such as cost and coverage, do vary widely, even within individual states. So if you’re shopping for the right Medigap policy, be sure to compare to find the best possible deal, and pay very close attention to the fine print. Medigap is often a very good option for people who anticipate frequent medical expenses as many options are quite comprehensive.
Coverage that is 100% portable – no matter where you live in the US, you are covered by original Medicare insurance. The same is true for Medigap coverage. Some plans will even cover emergency care when you are visiting a foreign country. So, you will have the peace of mind knowing that even when you are traveling on vacation, your plan may cover you.
Guaranteed renewable coverage – Medicare Advantage plan contracts may get revised on an annual basis with the Federal Government while some plans are completely discontinued altogether. Medigap plans feature guaranteed renewable coverage and the only way that you can lose the plan you have is if you fail to pay your monthly premiums
Medigap insurance is accepted by health care providers and hospitals that accept Medicare – however, some insurance providers may choose not to offer Medicare Advantage plans while some participating health care providers may decide that they will no longer accept any new patients after a certain date.
Your choice of hospitals and physicians – when you supplement your Medicare coverage with a Medigap plan, you will have the freedom to select the hospital and doctor that will serve as your primary care provider. This alleviates the worry of not knowing whether you will have the same doctor or health care provider to take care of you whenever you need any type of medical treatment.
What is Medicare Advantage?
Medicare Part C (also known as Medicare Advantage) combines the benefits of traditional Medicare with many of the benefits of some supplemental insurance plans into one single program. While many people find the combination of these two programs convenient, Medicare Advantage is not, by any means, interchangeable with traditional Medicare, especially when it comes to Medigap programs that beneficiaries qualify for.
One major difference between these two programs is that you cannot use Medigap supplemental insurance to help with costs that Medicare Advantage does not cover. Medigap policies are only for people on traditional Medicare. As a matter of fact, it is illegal for anyone to sell you Medigap insurance if you are on Medicare Advantage simply because you won’t be able to use any benefits for it.
If you go with a Medicare Advantage plan you still must keep Medicare Part A and continue to pay the premium for Medicare Part B just like with a Medicare Supplement.
If you find after joining Part C you find that you are dissatisfied with the service, price or level of coverage offered, you do have the option of switching back to traditional Medicare when the time of disenrollment comes around. You may also be able to leave Medicare Advantage within your first 12 months of joining but be aware that you may lose some important forms of coverage that you had before, that will have to be supplemented with a Medigap program, such as Medicare Part D, which helps with prescription drug coverage, which Medicare alone does not offer.
Compare Medicare Supplement and Medicare Advantage
| Medicare Supplement (Medigap) | Medicare Advantage |
| No Network. You can go to any doctor or hospital that takes Medicare. | Network. In most cases, you’ll need to use doctors and hospitals within that network. Some plans will offer out of network coverage but at a higher cost. |
| No referral needed to see a specialist. | In most cases, you will need to get a referral to see a specialist. |
| Benefits cannot change. | Benefits and plans can and do change yearly. |
| Zero coinsurance. | Coinsurance. |
| Zero or low copays (depending on the Plan). | Copays. |
| Zero or very small deductible. | Deductibles. Max out of pocket can be as high as $6,700 per year. |
| Guaranteed renewable – nothing to do each year except continue to pay the premium. | Plan contracts get revised on an annual basis. They can discontinue plans and you would be forced to switch plans. |
| Can change plans at any time of the year that benefits you. | Annual Enrollment Period – one time per year to switch your plan. |
| Monthly premium and no other max out of pocket costs. | Zero or low monthly premium. However, large max out of pocket costs that can be up to $6,700 plus per year. |
| Freedom to choose and switch Part D (prescription plan) without needing to change plans. | In most cases, if you want to switch prescription coverage you have to change your entire plan. |
| Foreign Travel Coverage – included in some plans. | Generally, don’t cover outside the U.S. |
Do Your Homework
Regardless of if you are getting ready to retire and looking at Medicare options or when your 65th birthday is approaching, and it’s time to decide what sort of Medicare coverage you want or need, you can compare these two options and find the one that is right for you, both have their pros and cons, so be sure to compare thoroughly.
If you are interested in saving a lot of time and money while lowering your aggravation level, then it’s very important to find a good Independent Medicare Insurance Agent.
An Independent Agent works for you rather than the insurance company. A good agent will be able to do a complete analysis of what’s available in your market and compare that to your specific needs. They will answer all your questions thoroughly and make sure you have the information to make a truly informed decision. The best part is their service is free to you.
Summit Medigap is an independent insurance agency that specializes in Medicare supplement insurance. We make Medicare seem easy™.
For more information about Medicare supplement insurance you can run a quote on this site or call us at 1-888-40-Summit (888-407-8664).
We have helped many people in Florida, Georgia, North Carolina, South Carolina, Texas, Colorado and Michigan to name a few.
