Medicare Advantage vs Medicare Supplement or Medigap Plan: Key Differences to Understand
When you first enroll in Medicare at age 65, you have an important coverage decision to make: whether to get your benefits through original Medicare plus a Medigap plan, or enroll in a Medicare Advantage plan. Understanding the key differences between Medicare Advantage and Medigap is critical to choosing the right approach for your needs and budget. This article will compare Medicare Advantage vs Medigap on how they work, costs, coverage, networks, and more.
How Do Medicare Advantage and Medigap Work?
Medicare Advantage – Also known as Medicare Part C, Medicare Advantage plans are offered by private insurers as an alternative way to get your Medicare benefits. Plans must cover all services covered by Medicare Parts A and B, and most include Part D prescription drug coverage. Many Advantage plans also offer extra benefits traditional Medicare does not cover, like vision and dental.
Medigap – Also called Medicare Supplement plans, these are sold by private insurers to fill “gaps” in original Medicare coverage. Medigap health insurance plans cover coinsurance, copays, and deductibles associated with Medicare Parts A and B. Most Medigap policyholders also enroll separately in a Part D type of plan .
What are the Cost Differences?
Medicare Advantage – Costs include a monthly premium (varies by plan) plus copays or coinsurance up to a yearly out-of-pocket maximum. Many plans have $0 premiums. With no Medigap option, costs are generally lower but less predictable for medicare beneficiaries.
Medigap – Involves paying the Part B premium, Medigap policy premium, Part D premium, and cost-sharing for services. But this offers stable, predictable costs since the Medigap plan covers most out-of-pocket expenses. Plan G is a popular option.
How Does Health Coverage Compare?
Medicare Advantage – Covers all Medicare Parts A and B services plus may offer extra benefits. Provides Part D prescription drug coverage. But networks and prior authorization requirements may limit flexibility.
Medigap – Covers coinsurance, copays, and deductibles for Medicare Parts A and B with stable access to providers nationwide. But no coverage for hearing, vision, dental, etc. unless you purchase those separately.
What are Medicare Advantage Plan Types?
HMO – Only covers in-network care, except in emergencies. Generally lower premiums and good cost sharing.
PPO – Covers out-of-network care at a higher cost, offering more flexibility. Higher premiums.
PFFS – Covers care from any Medicare provider without networks, yet provider participation is not guaranteed.
SNP – For those with specific diseases or dual Medicare/Medicaid eligibility. More focused care and benefits.
What Should I Know About Medigap Plans?
Guaranteed renewable – Medigap plans are guaranteed renewable even if you have health issues.
Coverage stays stable – Medigap covers coinsurance consistently across providers.
No networks – See any provider nationwide that accepts Medicare. No referrals needed.
Enrollment timing is key – Apply during Medigap open enrollment to avoid underwriting.
Popular options – Plan G covers nearly all out-of-pocket costs. Plans C and F are also common but only available to those eligible before 2020.
How Do Provider Networks Differ?
Medicare Advantage – Limited to the plan’s network except for emergency care. Seeing out-of-network providers will cost more or not be covered.
Medigap – Covers any provider nationwide that accepts Medicare. Referrals not needed to see specialists. No network limitations.
Can I Switch Plans?
Medicare Advantage – Can only change plans during Medicare Advantage open enrollment period each year, unless you qualify for a Special Enrollment Period.
Medigap – Can drop your Medigap plan anytime and switch back to Medicare Advantage. Ability to enroll in Medigap outside of open enrollment requires underwriting.
Should I Choose Medicare Advantage or Medigap?
There are pros and cons to both options:
Medicare Advantage Pros: Lower premiums, extra benefits, coordinated care Cons: Networks, prior authorization, can’t get Medigap later
Medigap Pros: Freedom to choose providers, predictable costs Cons: No extra benefits, higher premiums
Look at plans available in your area, costs, and health needs. Either Medigap or Medicare Advantage can provide solid Medicare coverage.
Key Takeaways
Medicare Advantage plans include Medicare Parts A, B and often D benefits but have restricted networks. Medigap covers gaps in original Medicare coverage.
Medicare Advantage generally has lower premiums but costs are less predictable. Medigap offers stable access to providers nationwide.
Shop carefully during open enrollment, as your ability to switch plans is limited. Weigh the pros and cons of both options.
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FAQS
What is the difference between Medicare Advantage and Plan G?
Medicare Advantage (also known as Medicare Part C) is an alternative to Original Medicare (Part A and Part B) offered by private insurance companies. It may include prescription drug coverage and other benefits not covered by Original Medicare. Medigap Plan G, on the other hand, is a Medigap (Medicare Supplement insurance) plan that helps cover the out-of-pocket costs not covered by Original Medicare, such as deductibles, copayments, and coinsurance. Unlike Medicare Advantage, Plan G does not replace Original Medicare but works alongside it.
How does Medicare Advantage differ from Medicare Supplement?
Medicare Advantage (Part C) is an all-in-one alternative to Original Medicare (Part A and Part B). Medicare Advantage plans are offered by private insurance companies and provide additional coverage beyond what is covered by Original Medicare. These plans often include prescription drug coverage and other benefits like dental, vision, and hearing. Medicare Supplement (Medigap) plans, on the other hand, are designed to fill the gaps in Original Medicare coverage by helping pay for out-of-pocket costs such as deductibles, copayments, and coinsurance.
What does Medicare Part B cover?
Medicare Part B is the medical insurance portion of Original Medicare. It covers medically necessary services and supplies needed to diagnose or treat a medical condition. This includes doctor visits, outpatient care, preventive services, and durable medical equipment. Part B also covers some prescription drugs that are administered in a clinical setting.
Does Plan G include prescription drug coverage?
No, Plan G does not include prescription drug coverage. If you have Plan G, you may choose to enroll in a separate Part D plan to get coverage for your prescription medications. Alternatively, you can consider a Medicare Advantage plan that includes prescription drug coverage.
Should I choose Medicare Advantage or Medicare Supplement?
The choice between Medicare Advantage and Medicare Supplement depends on your personal needs and preferences. Medicare Advantage plans may offer additional benefits and may have lower monthly premiums, but they also have network restrictions and may require referrals to see specialists. Medicare Supplement plans provide more freedom to choose doctors and hospitals but come with a higher monthly premium. Consider factors such as your health needs, budget, and preferred provider access when making your decision.
Can I have both Medicare Advantage and Medicare Supplement?
No, you cannot have both a Medicare Advantage plan and a Medicare Supplement plan at the same time. Medicare Advantage plans replace Original Medicare, while Medicare Supplement plans work with Original Medicare. You will need to choose one type of coverage that best suits your needs.
What is the best Medicare plan?
The best Medicare plan depends on your individual needs and preferences. Some people may prefer the comprehensive coverage of a Medicare Supplement plan, while others may choose the additional benefits and potentially lower costs of a Medicare Advantage plan. It’s important to evaluate your healthcare needs, budget, and preferred provider access when determining the best Medicare plan for you.
Is prescription drug coverage included in Medicare Advantage and Medicare Supplement plans?
Prescription drug coverage is not included in Medicare Supplement (Medigap) plans. However, many Medicare Advantage plans do include prescription drug coverage. If you have a Medicare Supplement plan and want prescription drug coverage, you will need to enroll in a separate Medicare Part D prescription drug plan.
Can I switch between Medicare Advantage and Medicare Supplement plans?
Yes, you can switch between Medicare Advantage and Medicare Supplement plans during certain enrollment periods. The Annual Enrollment Period, which occurs from October 15 to December 7 each year, allows you to enroll in or switch Medicare Advantage plans. The Medicare Supplement Open Enrollment Period is a six-month period that begins on the first day of the month in which you are both 65 or older and enrolled in Medicare Part B. During this time, you have the right to buy any Medicare Supplement policy sold in your state.
Can I have Medicare Advantage without Part D prescription drug coverage?
Yes, you can have a Medicare Advantage plan without Part D prescription drug coverage. Some Medicare Advantage plans offer prescription drug coverage (Part D) as part of their package, while others do not. If your Medicare Advantage plan does not include prescription drug coverage and you want it, you can enroll in a standalone Medicare Part D prescription drug plan.