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When you turn 65, you might feel bombarded with the many options available regarding your Medicare coverage. During your Open Enrollment period, you have the option to either enroll in Original Medicare (Medicare Parts A and B) and a Medicare Supplement plan, or a Medicare Advantage plan (Medicare Part C).
Because of the way Medicare Advantage works, you can’t get a Medicare Supplement plan when you enroll in Medicare Advantage. We’re here to help, and we want to ensure you get the perfect amount of coverage for your situation. Because of this, it’s important that you know the difference between a Medicare Advantage plan and a Medicare Supplement plan.
What is a Medicare Advantage Plan?
We know that having several Medicare options can get confusing. If you know you don’t want Original Medicare, you may be wondering: what is a Medicare Advantage plan? A Medicare Advantage plan offers the same amount of coverage as Original Medicare, but through a private health plan. The federal government requires Medicare Advantage plans to offer the same amount of coverage as Original Medicare, so you’ll feel comfort in knowing your basics will be covered. This means that your Medicare Advantage plan will provide coverage for hospital inpatient services and medical outpatient services.
Contrary to popular belief, you will continue paying your Part B premium with a Medicare Advantage plan. These plans often come with copayments and deductibles, but you’ll have an annual out-of-pocket limit. Once you meet this limit, your plan will pay 100% of your medical expenses. The premium for a Medicare Advantage plan usually ranges from $0 to more than $100 a month. Finally, Medicare Advantage plans include prescription drug coverage.
While low premiums and prescription drug coverage may seem attractive, we tend to recommend a second option: a Medicare Supplement plan.
What is a Medicare Supplement Plan?
A Medicare Supplement (Medigap) plan is a supplementary plan that fills in the gaps of your Original Medicare. For example, because Original Medicare only covers 80% of your medical expenses. Depending on the Medicare Supplement plan you choose, it might cover the remaining 20%, leaving you with no out-of-pocket costs. There are ten different Medicare Supplement plans available, and each plan provides a variety of coverage.
There’s one main difference between Medicare Supplement plans and Medicare Advantage: if you choose to enroll in a Medicare Supplement plan, you’ll still receive your main coverage under Original Medicare.
As stated before, these plans cover most, if not all of your out-of-pocket costs associated with Medicare. And you don’t have to wait to get one – you can enroll in a Medicare Supplement plan in the first six months after you enroll in Part B.
Unlike Medicare Advantage, Medicare Supplements don’t cover prescription drugs. To get that coverage, you’ll need an additional Medicare Part D, which is typically offered at a low premium. As far as the rest of the costs, Medicare Supplement plans have an average premium of about $150 to $200 a month. Age, health, and location can affect your premium.
Which One Is Right for Me?
While this question completely depends on your individual health journey, we typically recommend a Medicare Supplement plan. The lower-cost premiums of a Medicare Advantage plan might look attractive, but it comes with a few sacrifices. With a Medicare Advantage plan, you can’t choose any doctor that you want. If you choose an HMO plan, you can only see plan providers. If you choose a PPO, you can see any provider, but out-of-network providers cost more. This makes for a much lower number of health care professionals you can see, and the worst part – your preferred doctor might be out-of-network.
However, with a Medicare Supplement plan, you can visit any doctor that participates in Medicare. This means you’ll have a wide range of health care providers at your fingertips. Additionally, there are little to no out-of-pocket costs associated with a Medigap plan, whereas you may have to pay deductibles and copays of up to $3,400 to $6,700 a year with a Medicare Advantage plan.
Finally, while Medigap plans do not come with prescription drug coverage, most Part D plans are affordable, with some plans as low as $34. In addition to your Medigap plan, these plans would provide you with complete coverage for all your medical needs.
We understand the difficulties of choosing the right plan, but we’re here for you. Whether you choose a Medicare Advantage or Medicare Supplement plan, we’ll help you become Medicare experts, allowing you to make an informed decision.