Medicare Supplement vs. Medicare Advantage

The differences between a Medicare Supplement and a Medicare Advantage plan is often a topic of conversation when approaching the choice between the two. Occasionally, it is not really a choice and a”er a quick conversation with a broker, you will understand why you will be better off with one or the other depending on your specific circumstances. Here are a few questions to ask yourself before meeting with one of our brokers:

• What will your budget allow your monthly premium to be?

• Does working within a network bother you?

• Do you have doctors you want to keep if your network changes?

• How often do you go to the doctor?

• Do you have any major surgeries on the horizon?

A Medicare Supplement or Medigap policy covers the cost left over by original Medicare. These plans are secondary to Medicare. Medicare is your primary insurer. Having Medicare as your Primary insurer allows you freedom of choice. You can see any doctor that takes Medicare, go to any hospital, no networks and no referrals. Medicare Supplements follow federal and state laws designed to protect you. For that reason, the coverage from company to company providing supplements are the same; the only difference is price. Plan G from one company to the next is exactly the same plan but at a different cost. You will need to add Part D, a stand-alone prescription drug plan. With a Medicare Supplement and Drug plan, you will carry around three different cards: your Medicare card, your supplement card and your Part D card. Your supplement and part D do not have to come from the same company.

A Medicare Advantage Plan, also known as “Part C” or “MAPD Plan.” is an option available where a private company is paid by Medicare to manage your health care. This does not mean you lose Medicare. Medicare becomes your secondary and the private company becomes your primary insurer.

Going with a Medicare Advantage plan does not mean that you are selling for less. There is no degradation in coverage; all Medicare Advantage plans have to cover what Medicare A and B cover. An Advantage plan requires that you have to work within a network. Most often there are HMO and PPO style plans. On an Advantage plan you only incur cost if you incurred care. Meaning, if you go to the doctor or hospital, then you will have a co-payment. The advantage of an Advantage plan is that it provides you with an Out-of-Pocket Maximum. Thus giving you a cap to your liability. Oftentimes, Part D prescription drug coverage is included in these plans. So your doctor, hospital, and drug coverage is all inclusive within one plan.

An Advantage plan requires you to keep your Medicare Part B (Medical) premium current, but has either zero or a low monthly premium. Part B reduction is also available to reduce the cost of Medicare.

The main difference between a Supplement and Advantage Plan is form and function. Supplements have no network where advantage plans do. Supplements have the cost front loaded in the form of a monthly premium. You are going to pay for coverage every month regardless if you need it or not, but when you do you may pay very little. An Advantage plan has its cost backloaded in the form of a copay. This is a variable cost system where your cost will vary from month to month as you manage your health.

Choosing the right plan depends on your needs and wants. Let us help you in making the right decision.

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