Medigap vs Medicare Advantage: What is the Difference?
This is an important question and one in which there is quite a bit of confusion!
Medigap (also called Medicare Supplements) and Medicare Advantage Plans are very much different, and it’s important to understand the difference.
I like simple… and the simple and basic differences are as follows:
- Medigap or Medicare Supplement Insurance plans are insurance plans that do what their names imply – they supplement or fill in the gaps of Medicare coverage. You are covered by Medicare Parts A & B and then a Medigap Plan would be secondary to Medicare and pay after Medicare.
- Medicare Advantage Plans work differently than Medigap Plans, they are not supplements and they do not supplement Medicare. Medicare Advantage Plans take the place of Medicare as far as paying for medical services. If you have a Medicare Advantage Plan, Medicare will not pay your medical bill, the Medicare Advantage Plan will. Medicare Advantage Plans are administered by private company’s that are contracted with Medicare. You must have both Parts A & B of Medicare and continue to pay your Part B premium. Medicare Advantage Plans are also referred to as Medicare Part C.
More Medigap Basics
With a Medigap Plan you will generally pay a higher monthly premium, have no or minimal cost sharing, have greater latitude in terms of DR and, Hospital choice and you will need to purchase a separate Part D Plan (prescription). Medigap Plans are also broadly available and don’t vary greatly from area to area. Costs can vary greatly depending on the provider… even for the same coverage.
More Medicare Advantage Basics
With a Medicare Advantage Plan you will generally pay a lower monthly premium, have much more cost sharing (co-pays and coinsurance), have greater restriction in terms of Dr and Hospital choice, and your Part D Plan (prescription) will have to be included with your Medicare Advantage Plan (there are some exceptions to this requirement). Medicare Advantage Plan availability can vary greatly from area to area.
With the exception of a special circumstance (you move, loss of employer sponsored coverage, first becoming eligible for Medicare) you can only sign up for or switch your Medicare Advantage Plan during the Annual Election Period from October 15th through December 7th. You can compare and change your Medigap Plan any time of the year.
These are the basics, but an understanding of these facts will alleviate a lot of confusion as these two terms get thrown around.
Medigap vs Medicare Advantage… which one should you choose?
One is not necessarily superior to the other; individual preference, an individual’s budget, and Plan availability based on where you reside all factor into this important decision.
Need more help or questions answered?
Call the experts at Reed & Associates and we can explain these options in an easy to understand, concise fashion and help you understand which option is best for you!
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