Medigap vs Medicare Advantage – The Differences

Understanding the differences between Medigap and Medicare Advantage can eliminate confusion later on

There are plenty of people, who being new to Medicare, enroll in a plan without really understanding how it works. The sooner you know the differences between Medigap and Medicare Advantage, the sooner you can choose the plan that’s right for you.

The following video will help.

Medigap vs Medigap

Understanding the differences between these plans really comes down to definitions. A Medigap policy is a Medicare supplement and an Advantage plan is not.

There are some similarities between the plans. They are available from private insurance companies and both require that:

  • You are enrolled in Medicare Parts A and B
  • You continue to pay your Part B premium

Beyond that, there are few similarities as to how these plans work.

Medigap

The term Medigap is synonymous with the term Medicare supplement. As the name implies, a Medigap policy supplements original Medicare.

Your share of Medicare covered expenses will be paid by your Medigap insurance policy. The degree to which these expenses are paid is determined by which standardized plan you have purchased.

Medicare Advantage

A Medicare Advantage plan is not supplemental coverage. When you are enrolled in an Advantage plan, you are merely receiving your Medicare benefits from a private insurance company that is contracted with Medicare.

You are still enrolled in Medicare and have all protections afforded to people enrolled in Medicare.

Private companies offering plans are free to alter how you pay for services as long as all Medicare covered services are included in the plan benefits.

Rather than being subject to the standard Part A deductible for instance, you may have a copayment required for a defined number of days. Additionally, rather than the 20% coinsurance amount required by original Medicare for outpatient services, you will generally have varying copayment or coinsurance amounts for different services.

Medicare Advantage plans often include Part D coverage. No Medicare supplement includes drug coverage.

Advantage plans most often include some benefits beyond what is available by original Medicare. Commonly added benefits include; dental, vision, gym memberships, transportation and discounts on health and wellness products like vitamins and supplements.

Very few supplements will include ancillary benefits. And if included will be limited and offered as part of a membership like AARP.

Premiums

Premiums for Medigap policies will usually be higher than premiums for Medicare Advantage plans. Some Advantage plans have $0 premiums.

Advantage plan premiums will be the same for all people within a service area for a chosen plan but may include optional coverage (like dental) that will require additional premiums.

Medigap premiums can vary based on your individual circumstances and may be out of reach for people on limited incomes.

Plan renewal

Once you purchase a supplement you cannot be canceled unless the company ceases to offer coverage for all in your class or you stop paying your premiums.

Medicare Advantage plans are good for one year and although your plan may renew for the following year, benefits and premiums can change. You should review plans each year during your Annual Enrollment Period.

Choosing wisely will ensure that your expectations are met.

Next: Video 4 – The Best Time to Buy Medigap

 

 

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