Medicare Part A vs Medigap
Which Is Better, Medigap or Medicare Advantage?
When you are looking to supplement your Medicare coverage, one challenge you may struggle with is how to choose the right supplemental plan for you: Medigap vs. Medicare Advantage. Both supplemental programs have pros and cons, but understanding how each one can benefit you takes time and effort. Unless you conduct thorough research, it can be difficult to compare the differences and benefits.
Medicare Advantage and Medigap Plan Facts
-Medigap has 10 different packages to choose from
-25% of people choose Medicare Advantage coverage
-Both plans are considered private insurance, although they are partnered with the federal Medicare health insurance program
Understanding Medigap Plans
If you’re already enrolled in original Medicare, which includes Part A (hospitalization coverage) and Part B (medical expenses coverage), you can qualify for a Medigap plan. Medigap is designed to help cover the costs that original Medicare doesn’t cover. This means Medigap will pay your Part A deductible and some or all of your Part B copayments or coinsurance as well as other expenses. If you’re trying to minimize out of pocket healthcare costs, a Medigap supplement can be a great plan.
Another benefit of Medigap is that all 10 plans offered are standardized by the government. Each one has different benefits and deductibles. What this means for you is that you don’t need to compare the same Medigap plan over and over through different insurance agents. Costs may be different depending on where you’re located, but standardization of the plans means that the coverage is the same no matter where you are.
Medigap plans do not include prescription drug coverage and that must be purchased separately. This coverage is available through Medicare Part D.
Understanding Medicare Advantage Plans
Medicare Advantage plans (also called "Medicare Part C") take the best aspects of original Medicare (Parts A and B) and combine it with Part D prescription drug coverage. Medicare Part C is sold through private insurance companies. This policy is typically cheaper than buying Medigap supplemental plans, but may have certain restrictions.
The majority of these plans are either HMOs or PPOs, so you will want to make sure that your preferred doctor is within your coverage network if you choose Medicare Advantage. HMOs require that you go through a primary care physician for any referrals and remain within the network, while PPOs are more flexible. You have the ability to go outside of your network for coverage but you will pay a higher percentage of your care costs.
Medicare Advantage plans are not standardized and have very different deductible amounts as well as co-payment and coinsurance charges. You get extra benefits including prescription drug coverage, and some may cover hearing and vision checkups. In addition to paying your Medicare Advantage premiums, you also have to pay the Plan B premium.
How Do You Choose? Medicare Advantage vs. Medigap
The Medigap vs. Medicare Advantage dilemma is challenging for many people, and it can be a stressful decision. Both plans have a specific time period to apply, and if you miss it, you run the risk of being underinsured or not insured at all.
Here are some items to compare in each plan:
Whether the plan covers your preferred doctors
Premiums, co-pays and other out of pocket costs
The deductible amounts
Any coverage restrictions
Benefits for hospital stays and skilled nursing facilities
Prescription drug coverage
Which Is Better, Medigap or Medicare Advantage?
The better option for you truly depends on your needs. Examining each plan with an unbiased approach helps reveal which plan is better for you.
Here are some considerations that may help you with your decision making:
Your budget: One important aspect to consider is money. Medigap plans will pay for all or a large part of your doctor and hospital bills, while Medicare Advantage payments can vary.
Coverage needed: Coverage varies with these plans. Medigap rarely includes extra services, but some Medicare Advantage plans can cover vision and dental. With Medigap, you would need to purchase a completely different policy to receive that coverage.
Choices: Maybe flexibility is your top priority. If you want to see any doctor or specialist without a referral, Medigap is the better choice. On the other hand, if you don’t mind using a network of doctors and spending a little extra to go outside of that, Medicare Advantage may work just fine.
Comparing Medigap vs. Medicare Advantage is like comparing apples and oranges. Each plan has advantages and the hard part is figuring out which ones are most closely aligned with your needs.
When you work with an independent agent, you will get the information you need to make an informed choice, and you can be sure that you’re going to get the best policy to suit your needs and lifestyle.
Medicare Supplemental Health Plans (Medigap)
Medicare supplemental plans, known as “Medigap” plans, cover the costs that are not covered by original Medicare.
There are 10 Medicare supplement plans: A, B, C, D, F, G, K, L, M and N
Plans E, H, I and J, which covered various Medicare gaps, are legacy plans that are still in force for some people, but were discontinued in 2010
If you join a Medicare Advantage Plan, you cannot buy Medigap supplemental plans
What Do Medigap Insurance Plans Cover?
Medigap insurance coverage is designed to cover what Original Medicare does not cover; these plans close the "gaps" in coverage and help seniors and those with disabilities to manage the costs of their care. The 10 Medicare supplemental policies, known as Medigap plans, each cover a range of healthcare costs, in differing amounts.
Benefits included in all of these plans include:
100% coverage for Part A coinsurance and hospitalization costs, up to 365 days beyond what Medicare covers
75% to 100% coverage for Part B coinsurance and copayments
50% to 100% coverage for the first three pints of blood during a hospital stay
75% to 100% coverage of Part A hospice care coinsurance or co-payment
Additionally, some plans include the following benefits:
50% to 100% coverage for skilled nursing facility coinsurance
50% to 100% of Medicare Part A deductible
100% of Medicare Part B deductible
100% of Medicare Part B excess charges
The percentage of coverage for each of the covered costs varies depending upon which supplemental Medigap plan you choose.
How to Qualify for Medicare Supplement Plans
If you live in the U.S. and are a citizen, you will automatically qualify for Medicare when you turn 65. At that time, you will have a six month “open enrollment” window in which you can enroll in any Medigap plan of your choosing, without having to go through an application or underwriting process.
To supplement your Medicare plan with additional coverage outside of your open enrollment period (for example, if you qualify for Medicare due to a disability), you will need to have Medicare Part A and Part B in place, and you will need to go through an application process to qualify.
Which Medicare Supplemental Health Insurance Plan Is Right for You?
Each of the different supplemental Medicare health insurance plans, has its own costs and benefits. The benefits are regulated by the Medicare program and will be the same anywhere you go, but the costs will vary from one insurance company to another.
How do you go about deciding whether one of Medigap plans makes sense for you? How can you compare Medicare supplement plan quotes?
With all of the options available, you may need the guidance of a qualified agent to advise you on insurance options. When you're considering insurers, make sure you go with a company that's highly rated and has an excellent reputation for customer service. We at Halcyon Insurance Agency can help you evaluate your potential insurers.