Medicare Supplements Vs Medicare Advantage
One of the most common points of confusion for Medicare beneficiaries is understanding the differences in their coverage options, and which option they really have.
Most Medicare Beneficiaries get their coverage by either a Medicare Advantage (Part C Plan) that includes drug coverage or a Medicare Supplement (Medigap) Plan that fills Medicare’s holes and picks up a separate drug plan.
So, what’s the difference?? Here is a basic explanation of each to keep things simple and easy to understand.
A Medicare Advantage plan essentially places your Original Medicare benefits on kind of a hold. You must continue paying for your Medicare Part B, but the plan you enroll in now administers your health care, not Medicare. For example, when you go to a Dr, your doctor must be in the plan's network, and you will not be responsible for the Medicare Co-Insurance, instead, you have a co-pay designated by the plan.
A Medicare Supplement simply fills the gaps and helps cover the portions of Medicare you are responsible to pay. For example, when you see your Dr and have a supplement, Medicare pays its portion, and the supplement pays all or part of what you would be responsible for.
Which way is better?
Well, the answer to this directly depends on your situation or needs. If you want the absolute most comprehensive then get a Medigap, but not everyone’s needs are the same, and where you live makes a big difference on many factors.
Here are a few things to ask yourself when you are looking into which coverage fits your needs:
Do you travel?
Do you have a need to keep your doctors or is the cost of the visit more important?
How often do you see the doctor?
What kind of medications and how many do you take?
What’s more beneficial is a plan that has a higher fixed monthly premium and little to $0 out of pocket or a plan that has little to no premium and you pay as you use the plan?
Are you in need of benefits Medicare doesn’t provide such as dental, vision, or hearing?
Do I live in an area where there are many choices of doctors and plans or do I live in an area where there are not as many options?
All these questions will help you determine which direction is best for you.
Let’s break them down:
Do you travel?
Many Medicare beneficiaries like to retire buy an RV and just travel. If you need to have the ability to see any doctor nationwide that takes Medicare because you are always on the move, you have 2 choices on coverage that fits.
Medicare Supplement – Since on a supplement you can see any doctor nationwide that takes Medicare it’s a great option for traveling beneficiaries; this is due to the fact you do not need a referral and works the exact same way wherever you are.
Medicare Advantage PPO – Some Medicare Advantage plans are PPOs, this means you can go out of network to see a doctor but in most cases, you will be paying more to see the doctor than you do when you are in network areas seeing a doctor that is contracted with the plan. In some cases, you may have to pay the full bill and submit it to the plan to have a portion reimbursed.
Travel winner – Medigap
Do you have a need to keep your doctors or is the cost of the visit more important?
Doctors are a very personal part of your health care; many people can’t imagine seeing a different doctor and others do not care if the price is lower.
Medicare Supplement – As mentioned above if the doctor takes Medicare, you can always see them. So, if you must have the same doctors this is a great option. But if the price is what’s important you need to expect in most areas you will pay between $100 a month and $250 a month for your Medigap coverage plus around $30 for a drug plan for most people. However, when you go to the doctor, with many of the plans you will pay little to nothing.
Medicare Advantage – If the doctors are in-network that you want to keep then this could be your option, but keep in mind a doctor can drop at any time, and you can only change your plan at certain times of the year so you could potentially lose your doctor. On the price side you have plan copays, and, in many areas, you can get a $5 copay or less to see your primary care, and many of these plans cost $0 per month. So, If you are willing to change doctors this can be a great option for you.
Winner – No clear-cut winner as it depends on what is right for you
How often do you see the doctor?
If you have health issues and you go to the doctor often then plan selection should be something where you need to balance how much per month on Copays vs How much for the monthly premium,
Medicare Supplement – With a supplement you would want to stick with Plan F or G if you go to the doctor often as there is no per-visit cost. However, unless you are just starting Medicare or have a guaranteed issue right this option may be out completely as you would have to medically qualify.
Medicare Advantage – depending on the area you live in, you can find plans with $0 copay for the primary care doctor and under $20 sometimes as low as $5 for a specialist if you go fewer times a month than it would cost you pay for the Medigap premium this would be the factor in your decision.
Winner – Medigap if you go often and can qualify, otherwise find the Medicare Advantage plan with the lowest out-of-pocket costs in your area.
What kind of medications and how many do you take?
Prescription drugs are every agent’s least favorite part of Medicare because we all feel like it should be better. There is not much difference between these 2 but let’s talk about it.
Medicare Supplement – Medicare Supplements do NOT cover drug coverage, so you need to get a stand-alone Part D plan to cover your prescriptions. This is both an advantage and a disadvantage. Since you are picking a separate plan, you can customize your coverage to ensure you have the plan that covers your prescriptions the best without affecting your health coverage. This does however add an additional cost to your coverage.
Medicare Advantage – Most Medicare Advantage plans do include prescription coverage, but it is not customizable. So, you cannot customize the coverage to fit your prescriptions unless you change your plan, which in turn changes your medical coverage. In many cases however you can get a generic or an alternative prescription that does the same thing covered by the plan.
Winner – this is another that doesn’t have a clear-cut winner. If you take odd prescriptions the Medigap with Standalone prescription plan will usually give you the most comprehensive option, however, it’s additional costs in a time when many of us are on a fixed budget. Where the Medicare Advantage in most cases includes prescription coverage if you trust your doctor to put you on medications that are part of that plan.
What’s more beneficial is a plan that has a higher fixed monthly premium and little to $0 out of pocket or a plan that has little to no premium and you pay as you use the plan?
This is the budget question that’s always at the root of decisions. The perfect coverage would be one that covers everything but costs nothing, unfortunately, that does not exist. However, the two options available do allow you to choose something that fits your situation.
Medicare Supplement – This is the fixed premium option, with a Medigap plan you have a premium, for most people and most states you will be between $100 and $250 a month plus $30 a month on average for a drug plan. However, this means you know exactly what your costs will be and it's predictable and easy to budget. It is also more costly most of the time, and more than likely you will see a rate increase annually.
Medicare Advantage – This is the low to $0 cost option in most states. You will pay as you use the plan, so pay as you go. One thing to focus on is the maximum out-of-pocket. For example, in the Tampa Florida area, you can find a plan with a maximum out-of-pocket of less than $2000 for the year, this means if you have the worse medical year every the most you will pay for medical services for the year will be $2000, keep in mind you must use network doctors. Where for a Medicare Supplement in this area you are looking at around $200 a month or $2400 a year, so unless you’re traveling the Medicare Advantage will save you money year over year.
Winner – Depends on the state but if you live in an area with low out-of-pocket plans it is hard to beat the Medicare Advantage in this category.
Are you in need of benefits Medicare doesn’t provide such as dental, vision, or hearing?
Original Medicare does not cover dental, vision, or hearing in most cases.
Medicare Supplement – Medicare Supplement plans only cover what Medicare does so they do not have any additional benefits, some companies however may give you a discount program to help you in dental, vision, and hearing. Some will also give you gym memberships, but most have an additional cost for this.
Medicare Advantage – This is where these plans shine, in many cases, these plans have dental, vision, and hearing. Its mainly preventative services and minor comprehensive services, but there is not an additional premium in most cases for the basic additions. Most also have some form of a gym membership, over-the-counter benefits that give an allowance for over-the-counter medicines, toothpaste, and other items. Not to mention many plans give transportation assistance to doctor visits to help you get to your appointments and more.
Winner – Medicare Advantage
Do I live in an area where there are many choices of doctors and plans or do I live in an area where there are not as many options?
Where you live plays a major role in what is available as well as the costs of the plans.
If you live in a more rural area the Medicare Advantage plans may not be as strong and your doctor options may be more limited, in a large city usually, they have strong benefits and $0 plans. With a supplement, it is just the opposite, in rural areas you will typically see lower premiums, and in the larger cities’ costs are usually higher. It is not always the case but as a rule of thumb.
So, you can see there is not really a this is better than that, but it's more based on your needs. If you need help determining which option is right for you give us a call 727-678-1505, send us an email, or check out our self-service tool if you know which route you want to go.
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