When you have choices in medical care, you want to choose the best, and by understanding all the ins and outs of Medicare plans, you can choose the plan that’s right for you.
You may be wondering, “Can I buy a Medigap plan and a Medicare Advantage plan, or is one better than the other?
We’ll go over the main talking points about both plans and provide an example to help you make the best choices for your own medical care.
Which Is Better Medigap or Medicare Advantage?
Let’s start by answering the first question. You can choose either a Medigap plan or a Medicare Advantage plan. You can’t have both.
As to the second question, whether a Medigap plan or Medicare Advantage plan is best for you depends on your life circumstances and preferences.
Let’s break down Medicare Advantage vs Medigap (Medicare Supplement):
Medigap Plans
Medigap plans, also known as Medicare Supplement insurance, are designed to fill in the gaps of what Medicare doesn’t pay. With Medicare, you have to pay a deductible and copayments or coinsurance.
In a practical sense, if the hospital admits you, and you don’t have a Medigap plan, Medicare would bill you for your deductible and any copays or coinsurance. They’d bill the hospital for the rest. This could cost you hundreds or thousands of dollars out of your pocket.
If you purchased a Medigap plan, the hospital would bill Medicare first and Medigap for the remainder, leaving you with no bill at all.
Once you leave the hospital, you’d be responsible for any remaining deductibles, copays, or coinsurance for your post-hospital care, as Medigap doesn’t cover Medicare Part B expenses. (People who were eligible for Medicare before January 2, 2020, may not have to pay their Part B deductible.)
Also, Medigap plans do not cover the following services:
- Long-term care
- Eye care
- Dental care
- Hearing aids
- Private duty nursing
On a positive note, Medigap plans allow you to choose your preferred doctors and hospitals, and you won’t need a referral for a specialist. Even better, your Medigap plan will renew automatically, as long as you keep paying the premiums as it is a guaranteed renewable policy.
If you opt for a Medigap plan, you will want to compare the available plans. While the coverages are exactly the same, the pricing may vary significantly.
Next, let’s see how Medigap compares with Medicare Advantage.
Medicare Advantage Plans
Unlike Original Medicare where you pay for Parts A, B, and D separately, Medicare Advantage plans bundle Parts A, B, and D into one plan.
While Medigap plans cover some of your out-of-pocket expenses, Medicare Advantage plans are designed to offer the basic Medicare coverages and additional coverages. Unlike Medigap plans, Medicare Advantage plans may cover long-term care, dental care, eye care, hearing aids, and private-duty nursing depending on the plan you choose.
Furthermore, Medicare Advantage plans function much like private health insurance in that your insurance company may have an HMO, PPO, or a similar structure. That means you may have to use a doctor within their network (or pay more for out-of-network), and you’ll have to get a referral if you need a specialist.
One of the benefits of a Medicare Advantage plan is that most plans have established copay amounts for physician visits. You’ll always know upfront how much you’ll have to pay for a doctor visit. Medicare Advantage plans also have a cap on out-of-pocket expenses which also helps in budgeting for medical expenses.
Medicare Advantage plans are typically higher than the cost of Original Medicare because the coverage is greater, which is a downside of the plan.
Unlike Medigap that covers anywhere in the country, Medicare Advantage providers may be limited by region.
Medigap Plan Example
There are ten different Medigap plans for you to choose from. Each state determines which plans they sell.
As an example, let’s say an individual chose one of the most popular Medigap plans – Plan G. After having a doctor’s visit, the person would have to pay their deductible and copay/coinsurance before the Medigap plan would pay the expenses Medicare does not cover.
If that same individual was hospitalized with a cardiac condition and had not yet paid anything toward their Part A deductible, Medicare would pay for the hospitalization minus the deductible, and the Medigap plan would pay the deductible.
As an added benefit, the individual can go to any doctor or hospital they choose, and they won’t need a referral for a specialist.
Final Things to Consider when Choosing Medicare Plans
When it comes time to make your final selection, you want to consider the following things:
- Cost of the plan
- Coverages
- Prescription drug coverage
- Importance of provider choice
- Need for nationwide coverage
If the thought of having a plan that covers gaps and alleviates the worry over the cost of medical services appeals to you, a Medicare Advantage plan is the best choice. However, if you’d rather pay lower premiums in exchange for incurring greater out-of-pocket costs, a Medigap plan will suit you well.