Comparing Medicare Advantage to Medigap will allow you to narrow your focus when choosing a plan
Very few people get their Medicare benefits from original Medicare only. Most people either enroll in a Medicare Advantage plan or purchase a Medigap policy, otherwise known as a Medicare supplement.
Watch the following video, comparing Medicare Advantage to Medigap, so you can make an informed choice between these two types of plans.
The fundamental difference between Medicare Advantage and Medigap
First, let’s clear up the biggest misconception regarding Medicare Advantage. A Medicare Advantage plan is not a Medicare supplement.
A Medicare Advantage plan is merely another way to receive your Medicare benefits. Rather than getting your benefits directly from original Medicare, a private insurance company, which is approved and contracted with Medicare, delivers your benefits.
A Medigap policy is supplemental insurance that works in conjunction with original Medicare to pay your share of Medicare covered expenses. The degree to which these expenses are paid depends on which standardized plan you have purchased.
Medicare Advantage vs Medigap – which will you choose?
Before we detail the differences, let’s look at plan similarities.
- Both require you to have Parts A and B
- Both have initial / open enrollment periods
- Both are offered by private insurance companies
But that’s where the similarities end.
A Medicare Advantage plan requires very little medical underwriting. The only medical condition that will prohibit you from enrolling is if you have end-stage renal disease.
A Medigap policy will generally require medical underwriting unless you have Guaranteed Issue Rights due to a change in your circumstances. Underwriting may apply in your Open Enrollment Period but will not stop you from obtaining coverage.
Medicare Advantage plans
- Available County by County
- Premiums and benefits can differ (no standardization)
- Usually includes Part D
- May include additional benefits, i.e. dental, vision, gym membership
- Premiums normally lower than Medigap
When enrolled in a Medicare Advantage plan you will normally pay deductibles, copayments and coinsurance for services. Amounts and types of cost sharing can vary from plan to plan.
You will also typically be subject to the plan’s provider network and may or may not have the freedom to go out of network for services. (Depends on type of network).
Medigap / Medicare Supplement
- Plans are standardized
- Premiums vary by company
- Part D is not include (must be obtained separately)
- Can use any provider that accepts Medicare (except Medicare Select)
- Premiums based on many factors, including; gender, location, health, tobacco usage, etc.
Neither a Medicare Advantage plan or a Medigap policy is a universally better option, but must be weighed against an individuals circumstances. Factors to consider include:
- Health status
- Willingness to accept a network-based plan
- Whether or not extra benefits are desirable
Once you have done a comparison between these two types of plans and made a choice as to plan type, you will have narrowed your focus and can get on to the business of comparing either Medicare Advantage plans or Medigap policies.