What’s the Difference Between Medicare Advantage and Medicare Supplements?

Fran
Fran Majidi
July 2, 2019

It’s very common for people to confuse Medicare Advantage plans with Medicare Supplement plans. First, let’s clear up all the cobwebs to make this as simple as possible. Medicare has four components: A (hospital), B (doctors, medical procedures, equipment), C and D (prescription drugs). In this article we will shine some light on Medicare C, called Medicare Advantage, which is often a cheaper way of qualifying for Medicare with Medigap (Medicare Supplement). 

You should have a trustworthy agent who can explain the differences to you. Below, we’ve tried to make the differences as easy to wrap your head around as possible.

What’s the Difference Between Medicare Advantage and Medicare Supplement?

Both Medicare Advantage and Medicare Supplements are sold by private insurance companies. However, these two products are vastly different. For one thing, Medicare Advantage is an alternative way to qualify for Original Medicare Part A and Part B. However, Medicare Supplements are sold as complements to Medicare, filling the gaps in coverage to save the insured some out-of-pocket expenses which can add up to be tens of thousands of dollars if the insured needs surgery or falls gravely ill..                      

Medicare Advantage Plans (Medicare Part C)

To make things even more confusing, Medicare Advantage is also Medicare Part C. Don’t ask why (we have no idea), just remember this fact.

You must have Medicare Part A and B to be eligible for a Medicare Advantage plan (C) and it would in turn administer your benefits to you. In fact, your Medicare Advantage plan will offer additional benefits to what original Medicare offers. With Medicare Advantage would cover: routine dental, vision and hearing services, prescription drugs and more. Prices and coverages vary so you should work with an agent who will shop rates for. Get a free health insurance quotes.

Just like regular health insurance, Medicare Advantage plans are offered in different types:

  • Health Maintenance Organizations (HMOs)
  • Preferred Provider Organizations (PPOs)
  • Private Fee-for-Service (PFFS)
  • Medical Savings Account (MSA)
  • Special Needs Plans (SNP)

HMO: You will be required to use healthcare providers in your plan network. You will use referrals from a primary care physician to get coverage for services from a specialist. 

PPO: If you use an in-network healthcare provider, you’re likely to be covered for more of your medical costs. You don’t need a referral to see a specialist.

PFFS: This type of Medicare Advantage plan determines how much it will pay doctors and other healthcare providers/hospital and how much you are responsible to pay.

MSA: This type of plan deposits money into a checking account solely used for paying health-care costs before you meet your deductible amount, after which you’re covered 100%.

SNP: This type of plan is tailored for beneficiaries with specific health conditions. 

Keep in mind that with Medicare Advantage, you’ll have to pay a monthly premium, annual deductible, coinsurance and copayments, which are separate from your Medicare Part B premium.

The main restriction with Medicare Advantage is that you cannot have end-stage renal disease.

Medicare Supplement Plans (Medigap)

Medicare Supplements, often called Medigap, also come in letters: A, B, C, D F, G, K, L, M (note that this A and B are different from Medicare Part A and Part B). 

Also known as Medigap and MedSup, Medicare Supplement plans are not designed to give you primary coverage. Instead, they help pay for things like deductibles, copayments, co-insurance etc. Again, this is not a comprehensive medical coverage plan but works in conjunction with Medigap to lower your out-of-pocket expenses. This coverage also covers medical care while traveling outside of the U.S. It does not include prescription drug coverage.

Medicare Supplement Plans come in 10 plan types (Plan F, Plan G, etcetera) and are available in 47 states. All plan types are the same, regardless of which company you choose but prices will vary. For example, Medicare Supplement Plan F from one insurer will have identical coverage as Plan F from another insurer but prices may differ. This is why it’s important to compare health insurance quotes. The following states offer their own standardized Medigap plans: Massahusetts, Minnesota and Wisconsin.  

All Medigap plans cover Medicare Part A (but not Part B) coinsurance and hospital costs for up to a year after Medicare benefits are exhausted. Different plans cover different things. For instance, Medigap Plan C covers the Medicare Part B deductible.

It’s important for you to look closely at your plan to make sure there are no gaps in coverage if you use up all your Medicare benefits. If you need an agent who will take the time to go over all these important details with you, visit here and enter your zip code. Remember that costs vary but coverage doesn’t, so find a company that offers a low insurance quote.

Do I Need Medigap?

If you consider that an $86,000 surgery (heart bypass surgery average) has a copay of $17,000, you should really consider investing in a small premium for a very important coverage.  

Open Enrollment Period

It’s important to sign up for Medigap during the Open Enrollment Period which is different for everyone. It begins the month you turn 65 and ends six months later. If you miss Open Enrollment you will be charged more if you have any health conditions. During Open Enrollment there is no medical underwriting so don’t lose out by forgetting to sign up! After Open Enrollment ends you’re not guaranteed coverage.

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