Medicare beneficiaries evaluating health plan options for retirement often wonder if it is more cost effective to get Original Medicare plus a Medigap Plan or enroll in a Medicare Advantage Plan. This article examines the costs of each strategy to help determine the most financially optimal approach for your personal situation.
What is Medicare Supplement Plan or Medigap?
Medicare Supplement insurance, also called Medigap, is sold by private insurers and helps pay Medicare out-of-pocket costs like copays, coinsurance, and deductibles. Plans are labeled Plan A, Plan B, Plan C, etc. Standardized plans offer the same basic benefits no matter what company sells them.
What is Medicare Advantage Plan?
Medicare Advantage Plans, also known as Medicare Part C, are offered by private insurers approved by Medicare. Plans like HMOs and PPOs provide all Medicare Part A and B benefits and often include prescription drug coverage. Many offer extra benefits not covered by Original Medicare coverage.
Cost comparison between Medicare Supplement Insurance and Medicare Advantage
On average, Medicare Advantage Plans cost less per month than Medigap policies. A 2022 national study found average monthly premiums were:
- Medicare Advantage Plan: $19
- Medigap Plan G: $148
However, Advantage Plans have copays and out-of-pocket maximums that Medigap Plans do not have. Your total costs for the year may be higher depending on your healthcare utilization.
Medicare Advantage pros and cons:
- Lower premiums
- Out-of-pocket costs for services
- Maximum annual out-of-pocket cap
Medigap pros and cons:
- Higher premiums
- No copays or coinsurance for Medicare services
- No annual out-of-pocket cap
Who should choose Medigap Plan?
Medicare Supplement Plans make the most financial sense for:
- People with high healthcare utilization
- Those who want to see any doctor nationally that accepts Medicare
- Beneficiaries not needing Part D prescription coverage
- Retirees who travel frequently out of their plan’s service area
Who should choose Medicare Advantage?
Medicare Advantage Plan may typically provides better value for:
- Relatively healthy people with few doctors visits
- Those who do not mind provider network restrictions
- People who want medical and Medicare Part D Plan bundled together
- Beneficiaries looking for extra benefits like vision and dental
There is no one-size-fits-all answer on whether Medigap or Medicare Advantage offers better financial value. Evaluate your health, providers, and travel habits to select the most optimal arrangement based on your personal situation. For unbiased advice consult an independent Medicare health insurance broker servicing your local area.
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.
Is Medicare with a supplement more expensive than a Medicare Advantage?
It depends on individual circumstances, but generally, Medicare with a supplement can be more expensive due to the additional premiums for the supplement.
What is the difference between Medicare Advantage and Medicare Supplement Plans?
Medicare Advantage Plans are an alternative way to receive Medicare benefits, usually provided through private insurance companies, while Medicare Supplement Plans (also known as Medigap) help pay for some of the out-of-pocket costs not covered by Original Medicare.
Can I enroll in Medicare Advantage and Medigap at the same time?
No, it is not permissible to have both a Medicare Advantage Plan and a Medigap Plan at the same time. You can only have one or the other.
What does Medicare Part B cover?
Medicare Part B covers medically necessary services and supplies, including doctor’s visits, outpatient care, preventive services, and durable medical equipment.
What are the best Medicare Plan options?
The best Medicare Plan for an individual depends on their specific healthcare needs, budget, and preferred network of providers. It’s recommended to compare different plans to find the best fit.
Do Medicare Advantage Plans include prescription drug coverage?
Many Medicare Advantage Plans offer prescription drug coverage, known as Medicare Part D, as part of their benefits package. However, it’s important to check the specifics of each plan as coverage can vary.
What are the types of Medicare options available?
The main types of Medicare options are Original Medicare (Part A and Part B), Medicare Advantage (Part C), Medicare Part D prescription drug coverage, and Medicare Supplement Plans (Medigap).
What are the benefits of Medicare Advantage Plans?
Medicare Advantage Plans often include additional benefits beyond what Original Medicare offers, such as vision, dental, and hearing coverage, as well as fitness and wellness programs.
What does Medicare cover?
Medicare covers a wide range of healthcare services, including hospital stays, doctor’s visits, preventive care, certain prescription drugs, and more. However, coverage can vary based on the type of Medicare Plan.
Are Medicare Advantage Plans an alternative to traditional Medicare?
Yes, Medicare Advantage Plans are an alternative way to receive Medicare benefits by enrolling in a private insurance plan that provides the same coverage as Original Medicare, and often includes additional benefits.