Trying to decide between Medigap insurance and a Medicare Advantage plan? Before you get hung up on premiums, provider networks and which plan will include the most bells and whistles, you should think of how these plans work and what your overall experience will be.
Medigap and Medicare Advantage are two distinctly different types of plans. Medigap, more commonly referred to as a Medicare supplement is insurance which you can purchase to fill in the cost gaps associated with Medicare.
Enrolling in a Medicare Advantage plan enables you to receive your Medicare benefits through a private insurance company which crafts a plan that may require different out-of-pocket costs than original Medicare, such as varying co-payments, coinsurance and deductibles.
The fundamental design differences between these two plans can result in a completely different user experience. And, as with most everything else, your personality will determine if you perceive your experience with either plan to be positive or negative.
The key ingredient of a Medicare supplement is certainty. If you like surprises this may not be a big deal. But if you appreciate knowing what annual health care costs you can expect and which providers you will have access to, you may want to consider purchasing a Medicare supplement.
What to expect with a Medicare supplement
Medicare supplements are designed as standardized plans. If you purchase Medicare supplement Plan F for instance, it will have identical benefits no matter which insurance company you buy from. But the premium can vary widely from company to company.
Standardization makes comparing plans side-by-side a simple exercise and allows you to easily compare a plan’s premiums with multiple companies. With standardized plans you can be certain that you are comparing apples to apples with no surprises.
Compare this to Medicare Advantage plans. Plans are not standardized and vary from company to company. The same named plan may even include different benefits depending on the County where it is offered. Because of the moving parts, shopping for and comparing Medicare Advantage plans is much more difficult and can result in less certainty that you have actually chosen the best plan for your circumstances.
After you have purchased a supplement you can be certain what your out-of-pocket costs will be. After you have taken the premium into account, you can clearly see what you may be responsible for. With Plan F for instance, all costs for covered expenses are paid by the plan. There is no guessing as to coinsurance amounts or how many co-payments you will be responsible for.
All Medicare supplement policies except Medicare Select policies (Medigap policies that requires network utilization), you can choose your own provider. You are not restricted to a network of providers and are able to travel out-of-State and receive the same benefits. This flexibility gives you a level of certainty not found with Medicare Advantage plans.
If you are the type of person that appreciates certainty, Medigap insurance may be right for you. Learn more by reviewing the Medicare publication, Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare.