This is a common question for many people who are or will soon be eligible for Medicare. Maybe you’re turning 65 and wondering which plan to pick. Or you’re already on Medicare, and you’re unsure whether you should make a change. Maybe you’re trying to help a relative select a Medicare plan.
In any of these situations, you might find that the information available is confusing, or the pros and cons of Medicare Supplement vs Medicare Advantage aren’t clear. And because the right plan often depends on a person’s specific needs, asking a friend what they chose isn’t necessarily helpful, either.
In this article, we’ll review the differences between Medicare supplements and Medicare Advantage and explore who might benefit from each one. Then, we recommend discussing your options in depth with a licensed Medicare Sharks agent who can help you determine which plan fits your needs.
The Main Difference Between Medicare Supplement and Medicare Advantage
The main difference is that Medicare Advantage (Part C) is intended to replace Original Medicare with an all-inclusive private plan, while Medicare supplements augment it, paying for out-of-pocket expenses not covered by Medicare.
Medicare Advantage comes with some extra benefits, but you’ll be limited to in-network providers.
Medicare supplements (also called Medigap) allow you to choose any provider. This is particularly helpful if your provider is not in-network for Medicare Advantage, and you feel strongly about staying with their practice. However, Medicare supplements do not offer extra benefits.
Medicare Supplement vs Medicare Advantage: How Each Option Works with Original Medicare
Medicare Advantage is a Medicare-approved, bundled plan from a private provider that serves as an alternative to Original Medicare. It includes coverage for Medicare Part A (Hospital Insurance) and Part B (Medical Insurance). In most cases, it also includes Part D (prescription drug coverage).
If you have Original Medicare, you pay a deductible, then Medicare pays an approved amount for the service. You then pay the remaining amount (coinsurance), typically 20 percent after the deductible for Part B services. If you have a Medicare supplement, you can often use it to pay these coinsurance charges. Or, if you have insurance from a current or former employer, that may also cover your coinsurance costs in some cases.
With Medicare Advantage, your Advantage plan pays for the part typically covered by Medicare. You will still need to pay the deductible, which can vary from one plan to another—sometimes as low as $0.
The out-of-pocket costs also vary with Medicare Advantage plans, and many plans limit out-of-pocket expenses. If your plan has a limit, then Medicare Advantage will pay 100% of covered health services after this limit is reached.
Comparing Costs, Networks, Referrals, and Travel Flexibility for Original Medicare Vs Medicare Advantage
When comparing Medicare Supplement vs. Medicare Advantage, people often have questions about the differences in costs and service availability. Let’s review some of the most important differences:
Premiums for Original Medicare
On Original Medicare, you’ll pay a monthly premium for Parts B and D, while Part A may be free if you paid into Medicare for over ten years. If you don’t qualify for free Part A, you will pay a monthly premium that varies from year to year.
Sometimes, people want to know exactly how much the premium costs. Current rates are available on the Medicare website, but these rates apply only to the current year and are subject to change.
If you choose supplemental coverage or Medigap with Original Medicare, you will pay a separate monthly premium for the Medigap policy. These premiums vary by age, location, and other factors and are subject to change, but the Medigap policy may help lower your out-of-pocket costs.
Premiums for Medicare Advantage
A Medicare Advantage plan requires you to pay the typical Part B premium, plus the plan premium. However, some Medicare Advantage plans have $0 premiums, which can make costs similar. Medicare Advantage plans also usually include Part D coverage. The exact cost of your monthly premiums depends on the specific plan and, like Original Medicare, is subject to change.
What is Covered with Original Medicare?
Generally, Original Medicare covers services it deems “medically necessary.” Routine physical exams, eye exams, and dental care are usually not covered by Original Medicare. These are also not covered by Medigap plans, as supplements are meant to help with out-of-pocket costs from Original Medicare-covered services.
Typically, Original Medicare does not require prior approval for covered services and supplies.
What Does Medicare Advantage Cover?
Medicare Advantage plans are required to cover services that Original Medicare deems medically necessary, so coverage is usually the same. In some cases, Medicare Advantage plans also offer some additional coverage or benefits that Original Medicare doesn’t. However, some Medicare Advantage plans also require prior approval before they cover certain services and supplies.
Access to Specialists on Original Medicare and Medicare Advantage
With Original Medicare, you usually don’t need a referral to see a specialist, while Medicare Advantage plans often require a referral.
Networks and Travel Flexibility
Original Medicare covers your care anywhere in the U.S., as long as the provider accepts Medicare. It doesn’t cover care outside the U.S., but some Medigap supplemental plans will pay up to 80 percent of care (post-deductible) in other countries.
Medicare Advantage plans with an HMO generally limit your care to your local network of providers. If you choose an Advantage plan with a PPO, you may be able to see out-of-network providers, but out-of-pocket costs are usually higher.
When Medicare Supplement May Be a Better Fit
It’s helpful to understand that there is no one choice that works best for everyone when comparing Medicare Supplement vs. Medicare Advantage. For this reason, we advise people new to Medicare to consider their current circumstances and priorities.
A Medicare supplement may be a better fit if one or more of the following sounds like you:
– You value staying with your current healthcare provider or being able to choose a specific provider.
– You are concerned about high out-of-pocket costs, or you’ve compared costs and determined a Medicare supplement would save you money overall.
– You travel often, especially out of the country.
When Medicare Advantage May Be a Better Fit
Medicare Advantage might be a better fit if one or more of the following apply to you:
– You don’t mind switching healthcare providers if necessary, or choosing from providers who take Medicare.
– You don’t typically have high out-of-pocket costs, or you’ve compared costs and determined that a Medicare Advantage plan would save you money overall.
-You don’t travel often.
Questions to Ask Before Choosing a Plan
When considering Original Medicare vs. Medicare Advantage, it can be helpful to make a list of questions to licensed Medicare broker in Florida. Here are a few questions you might want to ask:
- How will my premium and out-of-pocket costs compare? It’s essential to understand which option will actually cost you more in the long run—but it’s not always easy to figure out! Your licensed agent will ask questions to better understand your out-of-pocket costs. They may want to know what medications you take, how often you see your doctor, or if you have a chronic condition that requires frequent hospitalization. The answers will give them a better idea of your overall costs.
- What happens if I need healthcare while traveling? If you travel often, your agent can compare Medigap vs Medicare Advantage plans and out-of-pocket costs to find the best solution.
- What extra benefits come with a Medicare Advantage plan? If you’re considering Medicare Advantage, your agent can help you understand the exact benefits the specific plan will have. Depending on your situation, they may be able to recommend a better option if it doesn’t have a specific benefit you wanted.
How Medicare Sharks Can Help You Compare Options
If you’re still confused or unsure about how to move forward, you’re not alone. Both options can be complex, and there are multiple Medigap and Medicare Advantage policies to choose from.
Medicare Sharks’ licensed agents understand how difficult it can be to compare Medicare plans and select the best one for you. That’s why we’re always available for a consultation to answer your questions so you can make an informed decision.
FAQs About Medicare Supplement vs Medicare Advantage
Medicare Supplement vs Medicare Advantage: Which Option Will Save Me the Most Money?
We understand that rising costs of healthcare, inflation, and fixed incomes can make this a critical question, but again, there is no one right answer for everyone. It depends on your particular situation and what’s most important to you. If you have concerns about costs, a Medicare Sharks licensed agent can help you to compare Medicare Supplement plans and Medicare Advantage plans, so you can better understand the costs and benefits.
If I don’t sign up for Medicare Part B as soon as I turn 65, what will happen?
You can sign up later, but there is a penalty for failing to sign up when you first become eligible (usually at age 65). In some cases, you may pay an extra 10 percent on top of the typical premium for every year you didn’t sign up. This extra penalty continues for as long as you have Medicare.
There is a similar penalty if you don’t join Medicare Part D coverage as soon as you’re eligible.
Can I buy a Medigap policy to pay out-of-pocket costs from my Medicare Advantage plan?
No, Medigap plans are only meant to work with Original Medicare, not Medicare Advantage. But in some cases, you can use insurance coverage from a current or former employer, or you may qualify for Medicaid.
This is a common question for many people who are or will soon be eligible for Medicare. Maybe you’re turning 65 and wondering which plan to pick. Or you’re already on Medicare, and you’re unsure whether you should make a change. Maybe you’re trying to help a relative select a Medicare plan.
In any of these situations, you might find that the information available is confusing, or the pros and cons of Medicare Supplement vs Medicare Advantage aren’t clear. And because the right plan often depends on a person’s specific needs, asking a friend what they chose isn’t necessarily helpful, either.
In this article, we’ll review the differences between Medicare supplements and Medicare Advantage and explore who might benefit from each one. Then, we recommend discussing your options in depth with a licensed Medicare Sharks agent who can help you determine which plan fits your needs.
The Main Difference Between Medicare Supplement and Medicare Advantage
The main difference is that Medicare Advantage (Part C) is intended to replace Original Medicare with an all-inclusive private plan, while Medicare supplements augment it, paying for out-of-pocket expenses not covered by Medicare.
Medicare Advantage comes with some extra benefits, but you’ll be limited to in-network providers.
Medicare supplements (also called Medigap) allow you to choose any provider. This is particularly helpful if your provider is not in-network for Medicare Advantage, and you feel strongly about staying with their practice. However, Medicare supplements do not offer extra benefits.
Medicare Supplement vs Medicare Advantage: How Each Option Works with Original Medicare
Medicare Advantage is a Medicare-approved, bundled plan from a private provider that serves as an alternative to Original Medicare. It includes coverage for Medicare Part A (Hospital Insurance) and Part B (Medical Insurance). In most cases, it also includes Part D (prescription drug coverage).
If you have Original Medicare, you pay a deductible, then Medicare pays an approved amount for the service. You then pay the remaining amount (coinsurance), typically 20 percent after the deductible for Part B services. If you have a Medicare supplement, you can often use it to pay these coinsurance charges. Or, if you have insurance from a current or former employer, that may also cover your coinsurance costs in some cases.
With Medicare Advantage, your Advantage plan pays for the part typically covered by Medicare. You will still need to pay the deductible, which can vary from one plan to another—sometimes as low as $0.
The out-of-pocket costs also vary with Medicare Advantage plans, and many plans limit out-of-pocket expenses. If your plan has a limit, then Medicare Advantage will pay 100% of covered health services after this limit is reached.
Comparing Costs, Networks, Referrals, and Travel Flexibility for Original Medicare Vs Medicare Advantage
When comparing Medicare Supplement vs. Medicare Advantage, people often have questions about the differences in costs and service availability. Let’s review some of the most important differences:
Premiums for Original Medicare
On Original Medicare, you’ll pay a monthly premium for Parts B and D, while Part A may be free if you paid into Medicare for over ten years. If you don’t qualify for free Part A, you will pay a monthly premium that varies from year to year.
Sometimes, people want to know exactly how much the premium costs. Current rates are available on the Medicare website, but these rates apply only to the current year and are subject to change.
If you choose supplemental coverage or Medigap with Original Medicare, you will pay a separate monthly premium for the Medigap policy. These premiums vary by age, location, and other factors and are subject to change, but the Medigap policy may help lower your out-of-pocket costs.
Premiums for Medicare Advantage
A Medicare Advantage plan requires you to pay the typical Part B premium, plus the plan premium. However, some Medicare Advantage plans have $0 premiums, which can make costs similar. Medicare Advantage plans also usually include Part D coverage. The exact cost of your monthly premiums depends on the specific plan and, like Original Medicare, is subject to change.
What is Covered with Original Medicare?
Generally, Original Medicare covers services it deems “medically necessary.” Routine physical exams, eye exams, and dental care are usually not covered by Original Medicare. These are also not covered by Medigap plans, as supplements are meant to help with out-of-pocket costs from Original Medicare-covered services.
Typically, Original Medicare does not require prior approval for covered services and supplies.
What Does Medicare Advantage Cover?
Medicare Advantage plans are required to cover services that Original Medicare deems medically necessary, so coverage is usually the same. In some cases, Medicare Advantage plans also offer some additional coverage or benefits that Original Medicare doesn’t. However, some Medicare Advantage plans also require prior approval before they cover certain services and supplies.
Access to Specialists on Original Medicare and Medicare Advantage
With Original Medicare, you usually don’t need a referral to see a specialist, while Medicare Advantage plans often require a referral.
Networks and Travel Flexibility
Original Medicare covers your care anywhere in the U.S., as long as the provider accepts Medicare. It doesn’t cover care outside the U.S., but some Medigap supplemental plans will pay up to 80 percent of care (post-deductible) in other countries.
Medicare Advantage plans with an HMO generally limit your care to your local network of providers. If you choose an Advantage plan with a PPO, you may be able to see out-of-network providers, but out-of-pocket costs are usually higher.
When Medicare Supplement May Be a Better Fit
It’s helpful to understand that there is no one choice that works best for everyone when comparing Medicare Supplement vs. Medicare Advantage. For this reason, we advise people new to Medicare to consider their current circumstances and priorities.
A Medicare supplement may be a better fit if one or more of the following sounds like you:
– You value staying with your current healthcare provider or being able to choose a specific provider.
– You are concerned about high out-of-pocket costs, or you’ve compared costs and determined a Medicare supplement would save you money overall.
– You travel often, especially out of the country.
When Medicare Advantage May Be a Better Fit
Medicare Advantage might be a better fit if one or more of the following apply to you:
– You don’t mind switching healthcare providers if necessary, or choosing from providers who take Medicare.
– You don’t typically have high out-of-pocket costs, or you’ve compared costs and determined that a Medicare Advantage plan would save you money overall.
-You don’t travel often.
Questions to Ask Before Choosing a Plan
When considering Original Medicare vs. Medicare Advantage, it can be helpful to make a list of questions to licensed Medicare broker in Florida. Here are a few questions you might want to ask:
- How will my premium and out-of-pocket costs compare? It’s essential to understand which option will actually cost you more in the long run—but it’s not always easy to figure out! Your licensed agent will ask questions to better understand your out-of-pocket costs. They may want to know what medications you take, how often you see your doctor, or if you have a chronic condition that requires frequent hospitalization. The answers will give them a better idea of your overall costs.
- What happens if I need healthcare while traveling? If you travel often, your agent can compare Medigap vs Medicare Advantage plans and out-of-pocket costs to find the best solution.
- What extra benefits come with a Medicare Advantage plan? If you’re considering Medicare Advantage, your agent can help you understand the exact benefits the specific plan will have. Depending on your situation, they may be able to recommend a better option if it doesn’t have a specific benefit you wanted.
How Medicare Sharks Can Help You Compare Options
If you’re still confused or unsure about how to move forward, you’re not alone. Both options can be complex, and there are multiple Medigap and Medicare Advantage policies to choose from.
Medicare Sharks’ licensed agents understand how difficult it can be to compare Medicare plans and select the best one for you. That’s why we’re always available for a consultation to answer your questions so you can make an informed decision.
FAQs About Medicare Supplement vs Medicare Advantage
Medicare Supplement vs Medicare Advantage: Which Option Will Save Me the Most Money?
We understand that rising costs of healthcare, inflation, and fixed incomes can make this a critical question, but again, there is no one right answer for everyone. It depends on your particular situation and what’s most important to you. If you have concerns about costs, a Medicare Sharks licensed agent can help you to compare Medicare Supplement plans and Medicare Advantage plans, so you can better understand the costs and benefits.
If I don’t sign up for Medicare Part B as soon as I turn 65, what will happen?
You can sign up later, but there is a penalty for failing to sign up when you first become eligible (usually at age 65). In some cases, you may pay an extra 10 percent on top of the typical premium for every year you didn’t sign up. This extra penalty continues for as long as you have Medicare.
There is a similar penalty if you don’t join Medicare Part D coverage as soon as you’re eligible.
Can I buy a Medigap policy to pay out-of-pocket costs from my Medicare Advantage plan?
No, Medigap plans are only meant to work with Original Medicare, not Medicare Advantage. But in some cases, you can use insurance coverage from a current or former employer, or you may qualify for Medicaid.