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Medicare Advantage vs. Medicare Supplement: Which One is for You?

Approaching retirement? It’s an exciting time of your life that includes a number of changes, like enrolling in Medicare. But as with any new chapter, you might be unsure about some important details, like understanding the difference between Medicare Advantage vs. Medicare Supplement plans.

Together, Medicare Part A and Part B, or Original Medicare, cover the essential healthcare benefits like hospitalization and doctor visits. However, many people choose to supplement or replace their coverage for several reasons: They want to add on prescription drug coverage, reduce out-of-pocket costs, and more.

Medicare Advantage and Medicare Supplement give individuals the ability to replace or add to Original Medicare coverage. Each option is unique, offering different coverage levels and flexibilities – but how do you know which one may be right for you?

Let’s start with the basics:

What is Medicare Supplement?

 Also called Medigap, Medicare Supplement is additional coverage on top of Original Medicare (Parts A and B) and is provided by private insurance companies. There are 10 different plans to choose from (although, not all providers may offer all 10 plans), and the benefits of each plan are standardized across insurance companies. Medigap helps pay for hospital and physician costs not covered by Original Medicare, like deductibles, copayments, and coinsurance.

Key features and benefits

  • Medicare Supplement is coverage in addition to Part A and Part B, so you need to be enrolled in Original Medicare to take advantage of it.
  • Medicare Supplement does not cover prescription drugs or additional services like vision, dental or long-term care. However, you can buy a separate prescription drug plan to go along with your Medicare Supplement plan.
  • There are no networks or referrals for most Medicare Supplement plans, so you are free to take advantage of its benefits anywhere Medicare plans are accepted.

Why might you use it?

  • If you anticipate needing frequent and/or expensive care, Medicare Supplement may be more cost-effective.
  • If you want more comprehensive protection from large costs that might occur if you have a certain illness.
  • Because it does not use a network, this plan is good for those who want more flexibility in choosing their doctor or who plan on living in or traveling to different areas of the country at different times of the year.

What is Medicare Advantage?

Medicare Advantage, or Part C, provides you with coverage that replaces your coverage under Original Medicare. It covers the same benefits as Medicare Parts A and B but is fulfilled by your private insurer. Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO) plans are the most popular. Each has its own provider network and, generally, you must use a provider in this network to get coverage.

Key features and benefits

  • Medicare Advantage plans use provider networks, meaning there is a defined list of providers you can see in order to receive benefits (HMO) or to receive the maximum benefits possible (PPO).
  • Unlike Original Medicare, Medicare Advantage plans include prescription drug coverage.
  • Often, Medicare Advantage includes additional benefits like fitness, vision, and dental.

Why might you use it?

  • Medicare Advantage plans may save you money if you don’t need frequent and/or expensive care.
  • Having a packaged plan with a defined network of providers can simplify your choices.
  • Medicare Advantage plans often have lower monthly premiums.
  • Convenience of having your medical and prescription drug coverage all in one plan.

So, how do you choose which one?

Choosing the right option is ultimately an individual decision. By design, these two options are different. When weighing the merits of Medicare Advantage vs. Medicare Supplement plans, you’ll need to evaluate factors like the importance of choice in selecting a physician or hospital, your lifestyle, tolerance for financial risk, and current health status. These will all help determine where your money is better spent. You should also keep the following considerations in mind:

  • Maximum out-of-pocket costs
  • Deductibles
  • Monthly premiums
  • Network restrictions
  • Travelling or living in another state
  • Your anticipated medical treatment and medication costs

Ready to learn more? Get in touch with an Agent today by calling 855-450-9932. We’ll help you make the most out of this next chapter in your life.