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Medicare Insurance Plans – Medigap or Advantage Plan?

Word Insurance HighlightedGet the facts when comparing Medicare Insurance plans – Medigap or Advantage plan?

If you are turning 65 and becoming eligible for  Medicare, you need to consider one of the Medicare insurance plans that are available. Very few people become eligible for Medicare and decide that Medicare Parts A and B are enough coverage.

There are just too many holes in Medicare not to consider purchasing a Medigap policy or joining a Medicare Advantage plan.

Anyone who has gotten close to Medicare age knows, you are literally inundated with information delivered to your mail box. The important stuff is sent from Medicare and gives you an overview of your options. Publications such as Medicare and You and Choosing a Medigap policy: A Guide to Health Insurance for People with Medicare, include a ton of information, but it may be more helpful to put them on your night stand in case you can’t sleep. Most people find the reading dry and boring.

Insurance companies kill a lot of trees! Just look at all the four color brochures in your mail box. Often, you get a high level overview, but not what you really want, clear language and an idea of cost. Get our free 8 Part Video Mini-Course to help sort things out.

Comparing Medicare insurance plans

Many people don’t understand that a Medigap policy and a Medicare Advantage plan are two different types of Medicare insurance plans.


A Medigap policy (Medicare supplement) is the traditional type of plan that has been around since 1966. It’s called Medigap because it fill the gaps left by Medicare. Medicare Part A requires you to pay a deductible and co-pays for extended stays and Part B requires that you pay 20% of all covered outpatient charges.

Medigap insurance is available as one of several standardized plans. Plans will be the same from one company to the next. When you first become eligible for Medicare, you have an open enrollment period that lasts six months from the first of the month that you become eligible. During this time an insurance company cannot refuse you the opportunity to purchase any policy that they sell.

If the Medigap policy is affordable, this is the best time to purchase. Compare rates with several different companies, knowing that Medigap Plan N or Medigap Plan F will be the same coverage whether you are looking at Mutual of Omaha or AARP.

This type of Medicare insurance plan will also require that you purchase a stand alone Part D drug plan, as it is not included in a Medigap policy.

Medicare Advantage

Advantage plans were introduced when Part D was first made available. Advantage plans are not Medicare supplements. But rather, you are receiving your benefits from an insurance company that is approved and contracted with CMS (The Centers for Medicare and Medicaid) to administer your Medicare. The idea behind this, is that a private insurance company is more financially efficient than the federal government, and they should be able to stretch the money allocated to give you more benefits.

Advantage plans do not fill the gaps, but rather give you set co-pays, co-insurance and deductibles that may control costs and limit your out-of-pocket expenses compared to Medicare. Advantage plans also often include your Part D drug coverage, as well as many additional benefits not included in Medicare, such as dental,vision and hearing.

Advantage plans also have an open enrollment period when you become Medicare eligible. Plans also have an annual enrollment period because companies contract for one calendar year at a time, and can change or discontinue plans each year.

One benefit for people on a limited budget is the low cost of joining an Advantage plan. As an example, AARP Medicare Complete is available in many areas without any monthly premium.

Shopping for Medicare insurance plans

One of the most efficient ways of doing the leg work when comparing Medicare insurance plans, is to do some research online. You can often shop plans and get rates without having to leave your home. Another option would be to meet with a trusted insurance agent. If you choose to do this, make sure your agent represents several companies. Armed with some knowledge, you can avoid costly mistakes and compare the best Medicare insurance plans.

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