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Know more about my Medicare options

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Lesley Pinckard
Lesley Pinckard

Medicare Advantage vs. Medicare Supplement Insurance Policies – Which is Right for You?

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When you turn 65, you are eligible to receive Medicare coverage. Original Medicare, known as Part A and Part B, is where many people start. But this coverage, provided by the federal government, could leave you with out-of-pocket expenses. That’s because Medicare Part A and B were only designed to cover 80% of your medical costs.

But did you know you can get additional health benefits outside of the coverage Original Medicare offers? Other types of plans, like Medicare Advantage and Medicare supplement, can provide you with more benefits or coverage than Parts A and B offer. Both Medicare Advantage and supplemental-type plans are provided by private insurance companies that are approved by Medicare. And they can help reduce your out-of-pocket costs when you receive care.

So, what’s the difference between a Medicare Advantage plan and a Medicare supplement plan? We’ve laid it out in this helpful chart below:

Medicare Advantage vs. Medicare Supplement Insurance

Medicare Advantage (Medicare Part C) Medicare Supplement Insurance (Medigap)
You have a

Medicare Advantage plan in place of Original Medicare.

Medicare Advantage includes all of the benefits of Part A and Part B, plus expands your coverage by offering added benefits like dental, vision and prescription drug coverage.

You may limit your out-of-pocket costs with maximum out-of-pocket protection.

You have a Medicare supplement insurance policy alongside your Original Medicare coverage.

While Medicare supplement doesn’t cover added benefits, it helps by reducing your out-of-pocket costs for the care you receive.

This can include out-of-pocket costs like deductibles, copays and coinsurance.

There are Medicare Advantage plans with a $0 monthly premium. However, you may have to pay an extra premium for this plan depending on your provider. You’ll pay an extra premium for a Medicare supplement insurance policy. The amount you pay depends on the policy and your Medicare provider.

*With both plans, you’ll still be required to pay your Part B premium.

Medicare Advantage Plans

Also known as Medicare Part C, Medicare Advantage plans include all of the benefits of Part A and Part B. Plus, you can get added benefits like dental, vision and/or prescription drug coverage with certain plans.

Things to keep in mind:

  • You must pay your Part B premium in addition to your Medicare Advantage premium. In some cases, you can find a $0 Medicare Advantage plan. This means you still pay your Part B premium, but that cost is transferred to the insurance company instead of you having to pay an extra premium.
  • People with end-stage renal disease (ESRD) may not be able to qualify for a Medicare Advantage plan. If this applies to you, you can look into purchasing a Special Needs Plan (SNP).
  • Some Medicare Advantage plans include prescription drug coverage, so remember to ask your Medicare provider about this detail when choosing your plan.

Medicare Supplement Insurance Policies

Medicare supplement insurance policies can help take care of certain health care costs not covered by Medicare. This policy is added to your Part A and Part B coverage and covers costs like deductibles, copays and premiums. There are 10 different plans in 47 states. Massachusetts, Minnesota and Wisconsin have their own plans. Each plan is represented by a letter and offers different benefits.1 Each letter is the same across insurance companies (for example: all Plan N benefits are the same). But plan prices can vary from one company to another.

Things to keep in mind:

  • Medicare supplement insurance policies don’t cover services not offered by Medicare, such as dental care or eye glasses.
  • These plans don’t provide prescription drug coverage. This means you’ll have to enroll in an independent Medicare Prescription Drug Plan (Part D) for medication coverage.

Which Plan is Right for You?

You can’t enroll in a Medicare Advantage plan if you already have a Medicare supplement insurance policy, and vice versa. If you decide to apply for a Medicare supplement policy, you can do so when you first enroll in Original Medicare. You can also apply for a Medicare supplemental policy throughout the year, however your application may undergo underwriting. In other words, your Medicare provider may check out your medical history before approving your application. You can enroll in a Medicare Advantage plan when you first enroll in Original Medicare, or during the Annual Enrollment Period each year.

When weighing which plan is right for you, there are many different factors to consider:

  • How much is the deductible?
  • How much is the monthly premium?
  • What health care and hospital services might you use often and how much will they cost?
  • What kind of restrictions will you have on doctors, hospitals and pharmacies? (i.e., Does your preferred doctor accept the plan you want?)
  • What is the expected cost of the prescription drugs that you need regularly?
  • What’s the most you feel comfortable paying out of pocket at one time?
  • How much do you want your copay amount to be for certain visits?

Learn More about Medicare

Everyone’s needs are different. So it’s important to think about your individual situation when choosing a plan. There are also helpful tools you can use to find recommendations by answering a few simple questions about your specific needs. But no matter which path you choose, you’re making an excellent choice by helping protect what matters most – your health!


SOURCES:

1 Medicare.com (June 30, 2017). Web page: Medicare Advantage vs. Medicare Supplement: How to Choose. 09/15/ 2018, https://medicare.com/medicare-advantage/medicare-advantage-vs-medicare-supplement-how-to-choose/