DirectMedSup wants to make your health care coverage decision easier, so we put together a “Medicare Advantage vs. Medigap Insurance” brief to help explain the primary differences between the two health care options.
Medicare beneficiaries have an important choice for their coverage options when enrolling in the program. When you turn 65, you can choose one of two options: enroll in traditional Medicare (Medicare Parts A and B) or select a Medicare Advantage plan. Those who opt for Traditional Medicare also often choose to enroll in a Medigap, or Medicare Supplement Insurance, plan to fill Medicare’s coverage gaps. Making this choice isn’t simple, and we recommend you do your research before making a final decision. DirectMedSup can help — call us at (866) 254-9197 for more information.
Medicare Advantage: The Basics
In order to make an informed decision between Medicare Advantage and Medigap insurance, it’s important to learn the basics of each option.
Medicare Advantage plans, also known as Medicare Part C, are offered by private insurance companies approved by Medicare. They bundle Medicare Parts A and B, and in some cases, also cover other health care needs of beneficiaries, including vision, dental, and prescription drugs.
Important Note: Under Medicare Advantage, private insurance carriers are paid a fixed amount by Medicare to provide services. In order to make a profit, they often restrict service access or their costs. Under traditional Medicare, the payor is the US government, an entity not concerned with making a profit.
When deciding whether or not to enroll in a Medicare Advantage plan, it’s important to remember a few key things:
- Medicare still covers some services. According to Medicare’s website, they will still cover hospice care, some new Medicare benefits, and some costs for clinical research studies.
- Medicare Advantage beneficiaries often pay a monthly premium. The cost of your premium varies depending on your plan and coverage. In addition to this monthly premium, you are responsible for paying your Medicare Part B premium. In some cases, your Medicare Advantage policy will pay your Part B costs.
- Medicare Advantage plans requires you to use their network of service providers. When receiving medical services, you may be restricted to the provider’s limited coverage networks in order to take full advantage of your benefits.
- You may still be on the hook for copay’s and coinsurance. Depending on your plan and the service you receive, you may be required to pay out-of-pocket costs associated with the service.
While a Medicare Advantage plan may be a good option for some, it’s restricted network of providers and coverage gaps may not make it a reliable policy choice.
Medigap Insurance: The Basics
Instead of a Medicare Advantage plan, you may opt for traditional Medicare and add a Medigap policy. Medicare Supplements coordinate with and help fill the gaps in coverage left by traditional Medicare. It’s a common misconception that Medicare will cover all of your health care costs, so it’s important to know that you still could be on the hook for co-pays, coinsurance, excess fees, and deductibles.
Medigap plans cover various out-of-pocket costs for traditional Medicare. Supplement plans are offered through private health insurers. These plans are standardized throughout the country, but costs can differ depending on which plan you choose and where you live.
Here are some other facts you should be aware of when considering a Medigap policy:
- Medigap policies do not include prescription drug coverage. Medigap beneficiaries will need to enroll in a Medicare Part D policy to cover their prescription drugs. Supplement plans also do not provide vision or dental coverage.
- Medicare Supplement plans do not replace Traditional Medicare. These plans work in coordination with Medicare to cover the additional costs associated with the traditional program. You will pay a monthly premium in addition to your Medicare premium, but you are likely to save money over the life of your policy by avoiding significant out-of-pocket costs.
- You can choose your own doctor and health care providers. Because Medigap beneficiaries still use Medicare as their primary insurance, plan holders can use their insurance with any doctor who accepts Medicare.
- Depending on which plan you choose, you may be able to cover all of your Medicare gaps. There are currently 10 different supplement insurance plans to choose between. Plan F can cover all of the gaps in Medicare coverage, while Plans G and N cover the majority of your out-of-pocket costs.
In short, a Medigap plan can help make sure you have comprehensive medical coverage without a restricted health care network of providers or concerns about a private insurer’s profit motives.
Making a Decision: Medicare Advantage vs. Medigap
You don’t need to make a decision on the final Medicare Advantage vs. Medigap insurance debate by yourself. You unfortunately are unable to use both types of policies together, and there are a number of factors that could help you decide which type of plan may be right for you.
Our agents at DirectMedSup are able to help you review your options and decide on a plan that works best for you and your family. Start by giving us a call at (866) 254-9197 to learn more about the differences in plans and find out why a Medigap policy may be more beneficial to you in the long-run.