Summary:
Contrary to popular opinion,Medicare Advantageand Medigap are two very different types of coverage — and you can’t have both. Here’s how to know whether a Medicare Advantage plan or aMedicare Supplement Insurance planfits your needs.
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If you’ve ever gone a few months (or even years) without health insurance, you’ll probably be relieved to know that once you turn 65, you can have coverage through Original Medicare for the rest of your life.
While Part A (hospital insurance) and Part B (medical insurance) pay for many health care costs, they don’t cover everything.
You will meet a deductible before the insurance policy kicks in — and after that, you’ll be responsible for other fees, like coinsurance (a percentage of certain costs). Also, Original Medicare doesn’t cover certain routine benefits such as vision, dental, and hearing care, so you may be paying more out of pocket than you think.
To help offset those costs, some people purchase either Medicare Supplement Insurance (also called Medigap, since it helps fill in the gaps in your coverage) or a Medicare Advantage plan (also called Part C). Each type works a little differently. Here’s how to know which one might be right for you.
Finding the best Medicare plan that’s right for your life and budget doesn’t have to be overwhelming — eHealth is here to help.
What is Medicare Advantage?
Medicare Advantage (MA) plans are an alternative to Original Medicare. They’re offered by private insurance companies. Under an MA plan, you’ll still get Parts A and B, but you’ll usually also have Part D, as well as other benefits such as routine hearing, vision, and dental services, all under one policy.
By law, Medicare Advantage plans cover the same types of care as Original Medicare — such as hospital services, doctor appointments, and lab tests, for example. But you may have to stay within network or seek a referral before the plan will pay for the costs. With Original Medicare, you can see any doctor who accepts it.
If you enroll in Medicare Advantage, your benefits will be administered through that private plan, which will replace your Original Medicare coverage. You also won’t be allowed to enroll in a Medicare Supplement plan or a stand-alone Part D plan.
What is the cost of Medicare Advantage?
Many Medicare Advantage plans don’t charge an additional premium above the usual Part B premium. You still may have a deductible, copays, and coinsurance, but MA plans generally put a limit on how much you have to spend each year (the out-of-pocket maximum).
The cost of a Medicare Advantage plan can vary depending on several factors, including the specific plan you choose and the coverage it provides. It’s important to consider the premiums, deductibles, copayments, and coinsurance associated with the plan. While some Medicare Advantage plans may have lower monthly premiums compared to Original Medicare, they may have other cost-sharing requirements such as copayments for doctor visits or prescription drugs.
Understanding the cost structure of the Medicare Advantage plan you’re considering ensures it aligns with your budget and healthcare needs. eHealth’s platform provides valuable information on the cost of Medicare Advantage plans, helping you make an informed decision about the most suitable and affordable option for you.
What are the pros and cons of Medicare Advantage?
Some pros of a Medicare Advantage plan include:
- Comprehensive coverage.
- Additional benefits like prescription drug coverage and wellness programs.
- Potential cost savings through lower premiums and out-of-pocket expenses.
- A network of healthcare providers, and care coordination services.
With MA plans, you can enjoy the convenience of having all your healthcare needs covered under one plan. It’s important to review the specific benefits, costs, and network of each MA plan to choose the one that best fits your individual needs.
While Medicare Advantage (MA) plans offer many advantages, there are some cons as well.
- MA plans often have network restrictions, limiting your choice of healthcare providers.
- You may need referrals to see specialists, and out-of-network care may not be covered.
- Additionally, MA plans can change their benefits and formularies annually, requiring you to review and potentially switch plans each year.
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What is Medicare Supplement Insurance?
Medicare Supplement Insurance, aka Medigap, works alongside your Original Medicare. It helps cover the costs of certain services that Part A and Part B don’t pay for — things like foreign travel and excess charges (such as when a doctor doesn’t accept Medicare). It can also help cover the cost of your Part A deductible — which is {{PART A DEDUCTIBLE}} {{CURRENT YEAR}} — as well as the 20% coinsurance rates you’ll be charged for Part B coverage.
Given these costs, it is helpful to have a Medigap plan to cover some of those payments.
Even so, a 2021 report from theKaiser Family Foundationfound that about 17% of those with Original Medicare — that’s about 5.6 million people — don’t have supplemental coverage.
There are currently 10 different Medigap insurance plans: Plans A through D, F and G, and K through N — but Plans C and F are no longer available to people who joined Medicare after January 1, 2020.
Medigap insurance plans cover 100% of your Part A coinsurance costs (the percentage you pay for services after you reach your deductible), and most will cover 100% of your Part B coinsurance and copayment costs.
If you go with Medigap, remember that it will also have a monthly plan premium. The amount varies per plan, but it could be hundreds of dollars each month. Some plans also have deductibles and copays.
What is the cost of Medicare Supplement (Medigap)?
If you go with Medigap, remember that it will also have a monthly plan premium. The amount varies per plan, but it could be hundreds of dollars each month. Some plans also have deductibles and copays.
When considering Medigap, it’s crucial to understand the cost implications. Medigap plans come with a monthly premium that you need to pay in addition to your Medicare Part B premium. The cost of Medigap plans can vary depending on factors such as your location, age, and the specific plan you choose. While Medigap plans may have higher premiums compared to other Medicare options, they can help reduce out-of-pocket expenses, such as deductibles, copayments, and coinsurance.
What are the pros and cons of Medicare Supplement (Medigap)?
Medigap plans offer several advantages that can provide peace of mind and financial protection. One of the main benefits is that Medigap helps cover out-of-pocket costs not paid by Original Medicare, such as deductibles, copayments, and coinsurance. With Medigap, you have the freedom to choose any healthcare provider nationwide who accepts Medicare patients. Additionally, Medigap plans offer standardized coverage, making it easier to compare and understand different plan options. Medigap plans also provide guaranteed renewable coverage, ensuring that your policy cannot be canceled as long as you pay your premiums on time.
It’s important to keep in mind that Medicare Supplement Insurance doesn’t provide stand-alone coverage, so you’ll need to be enrolled in Original Medicare first. Medigap also doesn’t cover the cost of prescription medications. For that, you’ll need a third plan — Medicare Part D.
The cons of Medigap plans include the following considerations. First, Medigap plans tend to have higher monthly plan premiums compared to other Medicare options. Additionally, Medigap plans do not typically cover prescription drugs, so beneficiaries may need to enroll in a separate Part D plan. Lastly, Medigap plans may not be available in all areas or may have limited provider networks, which could limit the choice of healthcare providers.
What is the difference between Medicare Advantage and Medicare Supplement plans?
Medicare Advantage (MA) and Medigap plans offer different approaches to supplementing Medicare coverage. MA plans, offered by private insurance companies, provide an all-in-one package combining Medicare Parts A and B, along with additional benefits. Medigap plans, also provided by private insurers, help cover out-of-pocket costs in Original Medicare, such as deductibles and coinsurance. The main differences lie in the way they work: MA plans replace Original Medicare, while Medigap plans work alongside it.
| Featured Benefits | Medicare Advantage | Medicare Supplement |
|---|---|---|
| Coverage | Medicare Advantage plans provide the same coverage as Original Medicare (Parts A and B), and often include extra benefits like prescription drug coverage (Part D) and preventive services. | Medicare Supplement plans work alongside Original Medicare, providing additional coverage for out-of-pocket expenses not covered by Parts A and B. |
| Enrolling | You can enroll in a Medicare Advantage plan during specific enrollment periods, such as the Initial Enrollment Period or the Annual Enrollment Period. | You can enroll in a Medicare Supplement plan at any time, but the best time to do so is during your Medigap Open Enrollment Period, which starts when you’re 65 or older and enrolled in Part B. |
| Doctors and Hospitals | Medicare Advantage plans have networks of doctors and hospitals. It’s important to check if your preferred healthcare providers are in-network to ensure coverage. | With Medicare Supplement plans, you have the freedom to see any healthcare provider nationwide who accepts Medicare, without needing to worry about network restrictions. |
| Referrals and Specialists | Some Medicare Advantage plans require referrals from primary care physicians to see specialists, while others allow direct access to specialists without referrals. | Medicare Supplement plans do not require referrals to see specialists. You have the flexibility to see specialists without needing a referral from a primary care physician. |
| Costs | Medicare Advantage plans may have monthly premiums, deductibles, copayments, and coinsurance. Costs can vary depending on the plan and the services received. | Medicare Supplement plans come with monthly premiums, and the cost can vary depending on the plan, location, and insurance company. |
| Prescription Drug Coverage | Many Medicare Advantage plans include prescription drug coverage (Part D) as part of their benefits package. | Medicare Supplement plans do not include prescription drug coverage. To get prescription drug coverage, you’ll need to enroll in a separate Medicare Part D plan. |
| Medical Underwriting | Unlike Medicare Supplement plans, Medicare Advantage plans generally do not require medical underwriting. This means you can enroll regardless of pre-existing conditions. | Medicare Supplement plans may involve medical underwriting, which means insurance companies can consider your health status and pre-existing conditions when determining eligibility and pricing. |
Can I have Medigap and Medicare Part D at the same time?
Yes, you can have both policies. However, if you buy each policy from the same company, you may still be responsible for paying two separate premiums.
Having both a Medigap plan and a Medicare Part D plan is allowed, providing you with comprehensive coverage for medical expenses and prescription drugs. It’s important to note that if you choose to purchase both policies from the same insurance company, you may still be required to pay separate premiums for each plan.
How to choose between Medicare Advantage and Medicare Supplement
Choosing between Medicare Advantage and Medigap plans depend on individual preferences and healthcare needs. Each option offers unique benefits, and it’s important to consider factors such as coverage, costs, provider network, and personal preferences. Some individuals may prefer the comprehensive coverage and flexibility of Medigap plans, while others may find Medicare Advantage plans more suitable due to their additional benefits and managed care approach. It’s crucial to review the provided information and consider your specific circ*mstances to make an informed decision that aligns with your healthcare requirements.
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