Medicare advantage vs supplement – Which is better?
Anybody with a Medicare plan will soon realize that Medicare only covers at most 80% of their health care costs. No wonder that most people add additional insurance to their plan.
To cover the remaining 20% of your medical costs that are not paid by original Medicare, beneficiaries have two different options: Supplemental insurance, or Advantage plans.
To help you make an informed decision about what is best for you, we would like to help you understand how these plans work, so you can decide which option is better for you.
Medicare Supplement Plans vs Medicare Advantage Plans:
Medicare Supplement Plans, also known as supplemental insurance or ‘Medigap’ plans, are standardized by federal law, which effectively means, each insurance provider that offers such plan has to give you the exact same plan benefits. There are different plan options, defined by letters from A to N. The plans have different standardized benefits, created to provide a plan for (almost) every Medicare insured person’s needs. You will find plans with low to high premiums, low to high deductibles, and different coverage of the benefits and cost ‘gaps’ in original Medicare. Depending on these factors, the premiums and the amount that the plan covers for deductibles, co-payments or coinsurance, varies.
The main advantage of supplement plans is that they are widely accepted, so you have a broad choice of health care providers. Most providers accepting Medicare will also accept your supplemental insurance. Be aware though that there is no prescription drug coverage included in any supplemental policy. This means, if you want your (Medicare approved and doctor prescribed) medication to be covered, you also need to enroll in a separate Plan that covers prescription drugs.
While supplements help you cover the costs that you are left with after original Medicare has paid its share, advantage plans ‘replace’ your original Medicare insurance. Those plans are also offered by private health insurance companies and underlie strict governmental regulations. Medicare advantage plans are offered as HMO, PPO, Fee For Service (FFS), or a Medical Savings Account (MSA) plans. All advantage plans must provide all of your Part A and Part B benefits. On top of that, most plans also include coverage for prescription drugs that is comparable to Part D.
The main restriction with Medicare advantage plan is that you have to use a health care provider within the network of the plan, so you may not be able to see the doctor you use for years. The biggest plus for advantage plans is that because of their network structure, their premiums are usually lower than what you have to pay for a supplement plan, and most include prescription drug coverage to some extend. Some Medicare advantage plans are even offered at a $0 (zero) premium over what you already pay for your Part B, with additional benefits over your original Medicare plan.
To find out which additional insurance is best for your personal needs, you first need to define what is important to you as far as the doctors you want to see and the medication you currently take. Next, get quotes for the supplemental or advantage plan that covers you medical needs.
If you need help, you may either contact a licensed independent insurance broker or Medicare directly.
