Medicare Advantage plans versus Medicare supplement


If you are looking at obtaining additional medical insurance to supplement Medicare Parts A & B the options are a Medicare Supplement plan, also known as “Medigap,” or a Medicare Advantage plan, sometimes known as “Medicare Part C.”  But what are the advantages of both?  And do you even need a policy to supplement Medicare?

Those 65 and older that qualify for Social Security also qualify for Medicare, the nation’s health insurance program for seniors, if they or their spouse worked and paid Medicare taxes for at least ten years.  Medicare Part A is essentially considered catastrophic care and covers hospital, skilled nursing, hospice or home health care.  Medicare Part A is premium-free for those receiving Social Security who meet certain income thresholds.  Medicare Part B, which does require a premium, covers doctor’s visits, outpatient care, and preventative medicine.  However, traditional Medicare does not cover long-term care, vision or dental care – including eye glasses and dentures – hearing aids and, most important to many, prescription drugs.  If you want and need coverage beyond the basic Medicare A & B, there are two options – a Medicare Supplement plan (also known as “Medigap”) with or without Medicare Part D OR a Medicare Advantage plan.

Medicare Supplement with Medicare Part D

A Medicare Supplement plan covers some of the health care costs that Parts A & B do not including copayments, coinsurance and deductibles.  If you see doctors on a regular basis, the copays can add up and a Medicare supplement plan may make more sense for you.  The other biggest advantage of Medicare Supplement plans is that they generally allow you to see any doctor that accepts Medicare, giving you flexibility to keep your existing medical providers as you transition into Medicare from a traditional insurance plan.  If you travel frequently, this portability could be important.  Once purchased, Medigap policies also can’t be cancelled if health issues develop.

The biggest disadvantage of a Medicare Supplement plan is what it doesn’t cover – long term care, vision or dental care, hearing aids, eyeglasses and prescription drugs.  According to a recent article in Forbes magazine, nearly 80% of seniors take at least one prescription drug daily.  Medicare Part D can offer the prescription drug coverage that a Medigap policy does not but at an additional cost.  There are restrictions in what Part D covers so best to check your plan.  Unlike Medicare A & B, a Medicare Supplemental plan requires that a premium is paid to a private insurer.

Medicare Advantage Plans

A Medicare Advantage plan is an alternative to Medicare A & B.  Instead of receiving healthcare through the government, you can purchase a Medicare Advantage plan from a private insurer that contracts with Medicare.  Medicare Advantage operates much like an HMO or PPO with premiums, deductibles and copays.  While some plans have no premiums, you still need to pay for Medicare Part B.  Unlike Medicare A & B, a Medicare Advantage plan typically covers prescription drugs (making it unnecessary to get Medicare Part D) and often includes vision and dental care as well as hearing aids.  The simple “one premium covers all” is the biggest plus to a Medicare Advantage plan and, unlike traditional Medicare, every Advantage plan has a yearly spending limit – once that limit is reached, the plan cover 100% of medical costs for the year.

While all Medicare Advantage plans are required to provide the same benefits as Medicare A & B, there are differences among the various plans, so it is best to shop around.  The major disadvantage of having Medicare Advantage is that, as an HMO/PPO, not all doctors may be part of your particular plan or accept Medicare Advantage, so you may not be able to see your same doctors and you may have a limited number of medical providers to choose from.

Medicare Supplements versus Medicare Advantage – Which is better?

It is important to note you can have either a Medicare Supplemental plan (without or without Part D) OR Medicare Advantage – not both.  A Medicare Supplement plan typically has higher premiums than Medicare Advantage and fewer options to choose from.  Medigap policies only cover an individual (meaning a couple would have to each get a separate policy).  However, the ala carte nature, portability and acceptability make it attractive to many.  An Advantage Plan, on the other hand, can cover a couple and out of pocket costs may be less than with Medicare A & B.  However, if you see doctors often, copays can add up and being restricted to only the medical practioners in your plan can be limiting.  According to Forbes magazine, a little over half of seniors over 65 have insurance beyond the standard Medicare A & B with 33% using Medicare Advantage and 20% with a Medigap plan.

So, what option is right for you?  It depends on your unique medical situation and needs.  The professionals at Quote Wizard can help you determine the availability and compare the cost and benefits of different Medicare Supplement and Advantage plans.

Shop Now