If you are about to be Medicare eligible or are contemplating changing your Medicare coverage, it’s important to understand the differences when considering Medicare Advantage and Medicare supplement plans.
If you are new to Medicare and unsure of the differences you are not alone. Even people who have been enrolled in Medicare for some time do not always understand the differences.
Check out my Free 8 Part Video Mini-Course to help sort things out. Making the wrong decision on your Medicare coverage could cost you in more ways than one.
Understanding the differences – Medicare Advantage versus Medicare supplement plans
Even though the title of this article should make it clear that Medicare Advantage Plans and Medicare supplements are two separate types of coverage, many people use the terms interchangeably and believe that Advantage plans are actually Medicare supplements. This is not the case.
Medicare supplement plans have been around as long as Medicare. The government refers to Medicare supplements as Medigap. The term Medigap is a reference to the plan filling the gaps left by Medicare. Plans are standardized and will include the same coverage no matter which company is offering the plan. AARP Medicare supplement Plan N, will be identical to any other company’s Plan N, as far as the coverage is concerned. Rates will vary from one company to the next.
It is important to note that Medicare supplement plans, from one degree to another, will only fill the gaps for covered expenses. The supplement will pay your portion of the covered expense, for example; your Part A deductible and 20% coinsurance for outpatient charges. Your supplement will not pay anything toward non-covered expenses such as dental, vision or hearing.
When you have a Medicare supplement plan, you will pay your Medicare Part B premium and a premium to the the insurance company for the Medicare supplement. Supplement plans do not include Part D drug coverage, so you will need to enroll in a separate Part D drug plan. Medicare supplement plans do not require that you use a network, but rather choose any provider that accepts Medicare assignment.
Compare both Medicare supplement and Medicare Advantage plans by visiting ehealthInsurance. You can also call them toll free to speak with a licensed agent.
Medicare Advantage plans are not Medicare supplement plans, but rather another way to receive your Medicare benefits. With an Advantage plan, a private insurance company contracts with CMS (Centers for Medicare and Medicaid) to administer your Medicare. The thought behind this is that a private insurance company is more cost efficient than the federal government and you should be able to receive some additional benefits. Medicare Advantage plans are annual plans and you are subject to enrollment periods.
Unlike Medicare supplements, Advantage plans are not standardized plans. Humana Medicare Advantage plans and AARP Medicare Advantage plans, for example, will not offer identical coverage. Plans may or may not have a monthly premium. Advantage plans do have cost sharing features, such as, co-pays, coinsurance and deductibles.
Many Medicare Advantage plans are network based plans, so you may need to check out the plans network to insure that you’re happy with the providers. Most Medicare Advantage plans include Part D drug coverage and many added benefits not offered by traditional Medicare. Extras include; dental, vision, hearing, gym memberships, discounts on medical supplies and in some cases transportation to and from medical appointments. Benefits vary from plan to plan.
Medicare Advantage versus Medicare supplement plans – finding resources
Once you have decided on either a Medicare Advantage plan or a Medicare supplement plan, it’s time to do your homework to get the best plan.
Shopping online is probably the easiest way to cover a lot of ground. Meeting with several agents can be time consuming. Also a good resource for an overview is the Medicare website.
You can request quotes online or be mailed written brochures to review in your home. Once you understand the differences between Medicare Advantage and Medicare supplement plans you’ll have the hard work behind you.