When becoming eligible for Medicare, one of the big decisions is whether to get additional coverage through Medigap or Medicare Advantage. Medigap helps pay Original Medicare out-of-pocket costs while Medicare Advantage provides all-in-one private plan options. Understanding which supplemental route most Medicare beneficiaries take can provide helpful perspective when making this choice.
Medicare Supplement (Medigap) Overview
Medicare Supplement insurance, also called Medigap, helps fill “gaps” in Original Medicare coverage including:
- Part A deductibles for health insurance hospitalization
- Medicare Part B deductibles for outpatient services
- Medicare coinsurance amounts
- Other cost-sharing amounts
Medigap policies are sold by private insurance companies and standardized by plan type, labeled with letters A through G plus high-deductible Plan F. Benefits are identical between same-letter policies regardless of insurer.
With Medigap, you can see any healthcare provider nationwide that accepts Medicare. There are no network restrictions. Premiums for plans range from around $120 to $250 monthly depending on your age, location, and selected plan benefits.
During your Medigap Open Enrollment Period when first enrolling in Medicare, you cannot be denied a policy or charged more due to health conditions. After this 6-month window, medical underwriting may apply.
Medicare Advantage Overview
Medicare Advantage Plans combine Parts A and B benefits into policies offered by private insurance companies. Medicare pays the insurer a set rate per member monthly.
Many Medicare Advantage Plans also include Part D prescription drug coverage plus extras like dental, vision, and gym memberships often not in Original Medicare.
Advantage Plans have costs like copays and coinsurance. Networks limit which doctors and hospitals you can use. Some plans charge $0 premiums while others range from $20 to over $100 monthly.
You can enroll in Medicare Advantage during Initial Enrollment when first eligible for Medicare or each year during Medicare Open Enrollment from October 15 to December 7.
Current Medicare Enrollment Statistics
In 2022, approximately 63 million Americans were enrolled in Medicare programs. Here is how enrollment broke down between Original Medicare, Medicare Advantage, and Medigap:
- Original Medicare Only – 36% of beneficiaries
- Original Medicare + Medigap – 33% of beneficiaries
- Medicare Advantage Plan – 36% of beneficiaries
- Other sources – Remaining small percentage primarily, including employer group plans
Medigap and Medicare Advantage were nearly tied, both providing supplemental coverage for about one-third of Medicare recipients respectively. Slightly more relied solely on Original Medicare with no secondary coverage.
Why Do More People Have Medigap Over Medicare Advantage?
Historically, Medigap enrollment has exceeded Medicare Advantage. But recently that gap has narrowed significantly. Still, Medigap maintains an advantage. Reasons more people have favored Medigap include:
- Familiarity and stability – Medigap has been available for decades through private insurers with guaranteed renewals. Most seniors are more familiar with this option versus relatively new Medicare Advantage.
- Freedom of choice – Medigap allows seeing any provider nationwide that accepts Medicare. No networks limit doctor or hospital access. This provides peace of mind for many.
- Lower cost sharing – With high-coverage Medigap Plans like F and G, nearly all out-of-pocket medical costs are covered aside from prescription drugs. Advantage Plans have annual limits but also copays and coinsurance up to that cap.
- Lack of Advantage Plan choices – Some rural areas have few Medicare Advantage options, making Medigap more attractive by default for supplemental coverage.
- Independence from government – Seniors wanting to avoid perceived “government-run healthcare” may prefer Medigap’s privatized approach.
Overall, Medigap’s stability, flexibility, comprehensive coverage, and privatization historically resonated with more Medicare beneficiaries compared to unfamiliar Medicare Advantage.
Why Do More People Have Medicare Advantage Now?
While still smaller than Medigap enrollment, Medicare Advantage Plans have significantly grown participation over the past decade. Reasons include:
- Lower premiums – Many Medicare Advantage Plans now charge $0 premiums while still providing Part D drug coverage. This appeals greatly to seniors on limited budgets.
- Increased benefits – Dental, vision, gym access and other non-medical perks attract seniors to Advantage Plans.
- Familiar managed care model – After decades of using PPOs or HMOs provided by employers or the Affordable Care Act exchanges pre-Medicare, the Advantage structure feels familiar versus Medigap’s uniqueness.
- More choice locally – When you enroll in a Medicare Advantage Plan, you’ll notcie it’s availability has greatly expanded even to rural locales, providing more competitors and lower costs.
- Increased marketing – Insurance companies now aggressively promote Medicare Advantage Plans with TV, mail, and online ads during enrollment periods. Brand awareness has grown.
Medicare Advantage’s trajectory seems like it will overtake Medigap at some point as more Boomers age into Medicare with past private insurance experiences.
Which is Better – Medigap or Medicare Advantage?
There is no consensus “best” option between Medigap and Medicare Advantage. The right choice depends on your personal healthcare needs and budget:
- Frequent healthcare utilizers may prefer Medigap for lower copays and networks limiting provider choice.
- Rural residents with few Medicare Advantage choices locally may need to default to Medigap.
- Those who travel often enjoy Medigap’s nationwide coverage compared to regional Medicare Advantage networks.
- Seniors in good health and with limited means may gravitate toward $0 premium Medicare Advantage Plans.
- Retirees wanting dental and vision benefits may opt for Medicare Advantage Plans including those perks.
- Medigap ensures specific doctors and hospitals can be visited while Advantage networks can change yearly.
Speaking with an independent Medicare insurance agent provides helpful guidance on aligning supplemental coverage with your priorities. This ensures selecting between Medigap and Medicare Advantage fits your unique circumstances.
Key Takeaways on Medigap vs Medicare Advantage Popularity
In summary, highlights regarding the split between Medigap and Medicare Advantage enrollment include:
- Currently, about one-third of Medicare beneficiaries have each form of supplemental coverage.
- Medigap coverage maintains a slight popularity edge but Medicare Advantage adoption continues growing quickly.
- Reasons for Medigap favorability include familiarity, provider choice, and comprehensive coverage.
- Medicare Advantage appeals to those valuing lower premiums, extra benefits, and using managed care previously.
- Weighing factors like health, budget, and location helps determine which option fits best individually.
- Speaking to an expert simplifies navigating between Medigap and Medicare Advantage.
While both types of supplemental coverage have merits, your personal situation dictates what works better rather than overall population statistics alone. Make sure to choose Medicare Plans meeting your needs even if diverging from general enrollment trends.
We’re Here to Help
You do not have to spend hours reading articles on the internet to get answers to your Medicare questions. Give the licensed insurance agents at Glidden Group a Call at (208) 962-0077. You will get the answers you seek in a matter of minutes, with no pressure and no sales pitch. We are truly here to help.
What is the difference between Medicare Advantage and Medigap?
Medicare Advantage and Medigap are both types of coverage available to Medicare beneficiaries. The main difference is that Medicare Advantage is an alternative to Original Medicare, offered by private insurance companies, while Medigap is supplemental insurance that helps cover the costs not paid by Original Medicare.
What is a Medicare Advantage Plan?
Medicare Advantage Plan is an alternative to traditional Medicare. It provides all the benefits of Medicare Part A and Part B, and often includes additional benefits like prescription drug coverage and dental or vision care. Medicare Advantage Plans offer or are offered by private insurance companies approved by Medicare.
What is a Medigap Plan?
A Medigap Plan is supplemental insurance that helps cover the costs not paid by Original Medicare. It can help pay for expenses like deductibles, copayments, and coinsurance. Medigap Plans are also offered by private insurance companies and can be used alongside Original Medicare.
Can I have both Medicare Advantage and Medigap?
No, you cannot have both Medicare Advantage and Medigap at the same time. Medigap policies are not compatible with Medicare Advantage Plans. If you have a Medigap policy and want to switch to a Medicare Advantage Plan, you will need to cancel your Medigap policy.
Does Medicare coverage cover everything?
No, Medicare does not cover everything according to the centers for Medicare. While it provides coverage for many healthcare services, there are gaps in coverage for things like prescription drugs, long-term care, and dental or vision care. This is why many Medicare beneficiaries choose to supplement their coverage with additional plans like Medicare Advantage or Medigap.
What is the difference between Medicare Advantage and Medicare Supplement?
Medicare Advantage and Medicare Supplement (Medigap) are two different types of plans. Medicare Advantage is an alternative to Original Medicare, offered by private insurance companies and combines coverage for Medicare Part A and Part B. Medigap, on the other hand, is supplemental insurance that helps cover out-of-pocket costs not covered by Original Medicare.
What is Medicare Part D prescription drug coverage?
Medicare Part D is the prescription drug coverage offered by Medicare. It helps pay for prescription medications and is available to beneficiaries who have either Original Medicare or a Medicare Advantage Plan may or that does not include prescription drug coverage. Medicare Part D Plans are offered by private insurance companies approved by Medicare.
How do I enroll in Medicare Advantage or Medigap?
To enroll in Medicare part c or Advantage Plan, you can contact the private insurance company offering the plan directly or visit the Medicare website to compare and enroll in available plans. To buy a Medigap policy, you can contact private insurance companies licensed in your state and they will guide you through the enrollment process.
What are the sources of coverage among Medicare beneficiaries?
Among Medicare beneficiaries, the main sources of coverage are Original Medicare (Parts A and B) alone, Original Medicare with a separate Part D prescription drug plan, Original Medicare with a Medigap policy, or a Medicare Advantage Plan. The choice of coverage depends on individual needs and preferences.
What is the difference between traditional Medicare and Medicare Advantage?
Traditional Medicare refers to the Original Medicare program offered by the federal government, which includes Medicare Part A and Part B coverage. Medicare Advantage, on the other hand, is an alternative way to receive Medicare benefits through a private insurance company. Medicare Advantage Plans often offer additional benefits not covered by traditional Medicare.