Original Medicare Advantage Plan vs. Medigap or Medicare Supplement insurance at 65
If you’re turning 65 soon, you may be wondering how to get the best coverage for your healthcare needs. Medicare is a federal health insurance program that covers most people who are 65 or older, as well as some younger people with disabilities or certain medical conditions. But traditional Medicare doesn’t cover everything, and you may have to pay some out-of-pocket costs for deductibles, coinsurance, copayments, and services that are not covered by Medicare.
That’s why many medicare beneficiaries choose to enroll in a Medicare Advantage plan or a Medicare Supplement plan (also known as Medigap plan). These are two different types of plans that can help you pay for some or all of the costs that Original Medicare (which consists of Medicare Part A and Part B) doesn’t cover. But which one is right for you? Let’s compare them and see what they plan to cover.
What is a Medicare Advantage plan?
A Medicare Advantage plan is an alternative way to get your Medicare benefits. It’s offered by private insurance companies that contract with Medicare to provide you with all the benefits and services covered under medicare Parts A and B. Most Medicare Advantage plans also include Medicare Part D prescription drug coverage, as well as some extra benefits such as vision, hearing, dental, and fitness programs.
When you enroll in Medicare Advantage plan, you still have to pay your medicare Part B premium, plus any additional premium that the plan may charge. You also have to follow the plan’s rules and use the plan’s network of providers, hospitals, and suppliers. Depending on the plan, you may need referrals and prior authorizations for some services. You may also have to pay some copays, coinsurance, and deductibles when you use services, but there is usually a limit on how much you have to pay out of pocket in a year.
Some of the advantages of choosing a Medicare Advantage insurance plan are:
- You get one-stop-shop coverage for all your healthcare needs
- You may pay lower premiums and out-of-pocket costs than with Original Medicare
- You get extra benefits that Original Medicare doesn’t cover
- Some plans offer out-of-network provider coverage or worldwide emergency care
Some of the disadvantages of choosing a Medicare Advantage plan are:
- You have a restricted choice of providers, hospitals, and suppliers
- You may have to deal with more paperwork and approvals
- You may have to pay more if you use out-of-network providers or services that are not covered by the plan
- You may not be able to switch plans or return to Original Medicare at any time
What is Medigap or Medicare Supplement insurance?
A Medicare Supplement plan is a type of insurance that helps pay for some of the out-of-pocket costs that Original Medicare doesn’t cover. It’s offered by private insurance companies that are licensed by the state where you live. Unlike Medicare Advantage plans, Medicare Supplement plans don’t replace your Original Medicare coverage; they supplement it.
When you enroll in a Medigap insurance, you still have to pay your Part B premium, plus the premium for the plan. You also have to be enrolled in both Part A and Part B. You can choose from 10 standardized plans that are labeled from A to N (except in Massachusetts, Minnesota, and Wisconsin, where there are different standardized plans). Each plan offers a different level of coverage for deductibles, coinsurance, copayments, excess charges, foreign travel emergencies, and other costs.
Here’s why you should buy a medigap policy are:
- You can keep your Original Medicare coverage and use any provider that accepts Medicare
- You don’t need referrals or prior authorizations for any service
- You have predictable monthly payments that don’t change based on your health status or usage
- The plans include the ability to travel across the U.S. and sometimes abroad
Some of the disadvantages of choosing a Medicare Supplement plan are:
- You have to pay a higher premium than with Original Medicare or some Medicare Advantage plans
- You have to buy a separate Part D plan if you want prescription drug coverage
- You don’t get any extra benefits that Original Medicare doesn’t cover
- You can only enroll in a plan during certain periods and you may be subject to medical underwriting or higher rates if you miss your initial enrollment period
How do I enroll in a Medicare Advantage and Medicare Supplement plan?
You can enroll in either type of plan when you first become eligible for Medicare, which is usually when you turn 65 or have been receiving Social Security disability benefits for 24 months. This is called your Initial Enrollment Period (IEP) and it lasts for seven months: three months before your 65th birthday month, your birthday month, and three months after your birthday month. If you enroll in a plan during this period, you are guaranteed coverage at the best available rate, regardless of your health status.
You can also enroll in or switch to a different Medicare Advantage plan during the Annual Enrollment Period (AEP), which runs from October 15 to December 7 every year. During this period, you can compare different plans and choose the one that best suits your needs and budget. Your new coverage will start on January 1 of the following year.
If you want to enroll in or switch to a Medicare Supplement plan, you have a six-month Open Enrollment Period (OEP) that starts when you are both 65 or older and enrolled in Part B. During this period, you can buy any plan that is available in your state without having to answer any health questions or pay higher rates. If you miss this period, you may still be able to enroll in a plan, but you may have to go through medical underwriting or pay more based on your health status or pre-existing conditions.
Which insurance plan is better for me?
There is no definitive answer to this question, as it depends on your personal preferences, health needs, and financial situation. Some of the factors that you may want to consider are:
- How much are you willing to pay for premiums, deductibles, copays, and coinsurance?
- How often do you use health care services and what kind of services do you need?
- How important is it for you to have a choice of providers, hospitals, and suppliers?
- How important is it for you to have extra benefits such as vision, hearing, dental, and fitness programs?
- How often do you travel outside of your plan’s service area or outside of the U.S.?
To help you compare different plans and find the one that best fits your needs, you can use online tools such as the Medicare Plan Finder. You can also talk to a licensed insurance agent with our Medicare Insurance Agency. They are well trained in all the plans available in your area.
Remember that whichever plan you choose, you can always change it during the enrollment periods if your needs or circumstances change. The most important thing is to make an informed decision that gives you peace of mind and quality health care.