Medicare is a government-run health insurance program for seniors that covers different types of services but has gaps in coverage. To fill these gaps, individuals can enroll in Medicare Advantage or Supplement plans. This blog can help you make an informed decision about coverage, cost, convenience, and choice between these options.

Medicare Advantage vs. Medicare Supplement Comparison

When you first become eligible for Medicare you had to enroll in Original Medicare which consists of two main parts – Part A and Part B. Part A covers your inpatient care and Part B covers outpatient care. After your Part B becomes effective, to receive other Medicare benefits you get two main options to choose from. Insurance plan options are Medicare Supplement Plans or Medicare Advantage (Medicare Part C).

Advantages And Disadvantages of Medicare Supplement Insurance

Regardless of your choice, be aware that you need to pay for the Part B premium for both. Part B premium cost in 2023 is 164.90$.

Medicare Supplement plans are an option for additional coverage in addition to Original Medicare (Parts A and B). This type of coverage provides you with the flexibility to visit any Medicare-approved healthcare provider across the country.

Original Medicare covers medically necessary services, but only covers 80% of the cost. The remaining 20% will be your responsibility. This is where Medicare Supplement plans come in, as they can help cover the cost of copays, coinsurance, and other out-of-pocket expenses not covered by traditional Medicare. Note that Medicare Supplement plans do not cover prescription drugs, so many people choose to enroll in a standalone Medicare Part D plan for prescription drug coverage.

Private insurance companies offer Medicare Supplement plans, but these plans must follow standardized benefits, regardless of the insurance provider.

Advantages of Medicare Supplement plans include the ability to choose your own doctor and hospital without network restrictions, low out-of-pocket medical costs, and comprehensive coverage. On the other hand, there are disadvantages to consider, such as a monthly premium, if you want one of the three most comprehensive plans (Plans F, G, and N). Additionally, Medicare Supplement plans do not cover dental, vision, or hearing services.

Advantages And Disadvantages Of Medicare Advantage Plans

Medicare Advantage plans, also known as Medicare Part C, are offered by private insurance companies under contract with Medicare. These plans offer the same benefits as Original Medicare but typically include prescription drug coverage under Part D.

When you enroll in a Medicare Advantage plan, like an HMO or PPO, it becomes your primary source of coverage instead of Original Medicare. This means that when you receive medical care, the bill is sent to your insurance provider rather than Medicare. Medicare Advantage plans can also set their own cost-sharing, copays, and deductibles for medical and hospital services.

Benefits of Medicare Advantage plans include:

  • Affordable: Many plans have low monthly premiums, making them a good option for beneficiaries who cannot afford a Medigap plan. Also, premiums may often cost beneficiaries zero dollars. However, you are responsible for paying the Part B premium.
  • Extra benefits: often include dental care, vision, and hearing, wellness programs, or gym memberships alongside the basic benefits that are required to be provided (same benefits as Original Medicare)- all in one plan
  • Maximum out-of-pocket limit: Most plans have a maximum out-of-pocket cost (MOOP) to protect you from excessive expenses in case of a medical emergency. However, the MOOP can be as high as $8300 per year, meaning you are responsible for out-of-pocket costs up to this limit.

However, Medicare Advantage plans may not be suitable for everyone. Here are some of the drawbacks to keep in mind:

  • Limited provider network care: You may be restricted to a specific hospital and doctor network, and some plans may offer out-of-network providers at higher costs.
  • Higher out-of-pocket costs: While some plans may have lower out-of-pocket costs than traditional Medicare, others may have higher costs, including copayments, coinsurance, and deductibles.
  • Specialist referrals and prior authorizations may be required: Some Medicare Advantage plans require referrals or prior authorization for certain medical services, which is different from Original Medicare which rarely asks for such requirements.
  • Changes in additional benefits and cost-sharing: Medicare Advantage plans can change their benefits and cost-sharing from year to year, so it’s important to review your plan annually.

How To Choose the Best Option For Me?

When choosing between Medicare Advantage (MA) and Medicare Supplement (Medigap) plans, it is important to consider several factors. Firstly, you should consider your budget and what you are willing to pay for monthly premiums and out-of-pocket costs. MA plans often have lower monthly premiums, but higher out-of-pocket costs. On the other hand, Medigap plans have higher monthly premiums, but lower out-of-pocket costs.

It is also important to consider your medical history and future health needs. Medigap plans provide comprehensive coverage and the freedom to visit any Medicare-approved provider, while MA plans may have a limited network and may require referrals to see specialists. Medigap plans do not cover prescription drugs, so if you need medication, you may need to enroll in a separate Medicare Part D plan.

Additionally, you should consider what plans and prices are available in your area. Both MA and Medigap plans are offered by private insurance companies, so the availability and costs of each type of plan can vary depending on where you live.

Final Thoughts

In conclusion, both MA and Medigap plans have their pros and cons. The best option for you will depend on your individual needs, budget, and health situation. It is important to do thorough research and consider all of your options before making a final decision.

Every individual has unique healthcare needs, so some may find that Medicare Supplement plans are the best option, while others may prefer the Medicare Advantage plan. Ultimately, the right choice will depend on the specific needs and circumstances of the individual. 

However, the safer option would be to talk to a Medicare broker or agent at a private company. They are professionals in the Medicare world and thus can help you find the best plans that suit your budget and health needs. They can help you determine the actual costs of each option and you will be able to make the most accurate and informed decision best on facts.

Medicare Health Advisor at Medigap Medicare Insurance | Website | + posts

Dr. Susan Johnson is a Medicare Health Advisor with extensive knowledge and experience in health insurance, particularly Medicare. She has spent over 15 years working in various healthcare settings, including hospitals, clinics, and private practices.

As a Medicare Health Advisor, Dr. Johnson specializes in helping people navigate the complex world of health insurance, including original Medicare, Medicare Advantage, Medicare supplements, and Medicare Part D. She is committed to providing personalized guidance to her clients, helping them make informed decisions about their coverage and reduce their healthcare costs.