Medicare Supplement VS Medicare Advantage
Medicare Supplement Plans, also known as “Medigap” plans and Medicare Advantage Plans, also known as “Part C” plans, are the two primary coverages chosen to help with Medicare costs. It is important to understand the differences between these coverage types, their limitations, and enrollment periods.
Original Medicare is what we call the parts of Medicare issued by the federal government. Part A, hospital insurance, and Part B, medical insurance, are the only parts of Medicare issued by the Social Security Administration and Medicare. Every other product you see, and hear about, is offered by private insurance companies. Do we need to involve these insurance companies? More than 90% of Medicare beneficiaries would say “yes.”
What does Medicare cover and at what cost?
Original Medicare is designed to cover all medically necessary procedures for diagnosing and treating medical diseases or conditions. The key to understanding Original Medicare coverage is knowing that any procedure to diagnose or treat a disease or condition can be covered if your doctor deems it to be medically necessary. Part A, hospital insurance, comes with no monthly premium to those who have met the 10-year/40-quarter work history paying into Medicare taxes. However, there are still costs associated with Part A. In 2024, there is a $1632 deductible per benefit period and per day copays if your hospitalization exceeds 60 days. Part B has a monthly premium and out of pocket costs. In 2024, the Medicare Part B monthly premium is $174.70; the annual deductible is $240, and after the deductible Medicare pays about 80% and the beneficiary is responsible for the remaining 20%. There is no stop loss or maximum amount that one might pay throughout the course of the year with Original Medicare.
Medicare Supplement aka Medigap
Medicare supplement plans add to your Original Medicare. The Medigap plan is secondary , in other words, when you go to the doctor you will show two cards. (Your red, white, and blue Medicare Health Insurance card and your Medigap plan card from any carrier you choose.) Medicare will be billed by your provider and because of this there are no network restrictions to providers, referrals, or prior authorization. With Original Medicare and a Medicare Supplement, you can see any doctor the accepts Medicare. This also means there is not fighting with insurance companies to cover claims. If Medicare covers their portion, the supplement plan will cover theirs. Likewise, if Medicare does not cover the procedure, neither will the supplement.
Standardized Plans
Another key feature of Medigap plans is that their coverage is standardized. There are 12 standardized plans Medicare has outlined which are offered by insurance companies at various price points. With any company, anywhere in the country a Plan G will always offer the same benefits. Imagine this, you are driving down the road and pass several gas stations. All offer gasoline both standard and premium sometimes diesel, but they all come at different prices. This is the same with Medigap plans. If you purchase a Plan G with Humana the coverage will be the same as a Plan G with Mutual of Omaha, Allstate, Aetna, or United HealthCare. What will vary among these plans is their monthly premium along with their rate increases.
What is the best Medigap plan?
A truly professional and unbiased insurance broker will not use the word “best.” The reason we have so many options in the Medicare space is because there is not one solution for each individual’s needs, budget, or preferences. Plan F was long considered to be the best plan as it provides the most comprehensive coverage. Plan F is no longer available to anyone who received Medicare after January 1, 2020. With that being said, Plan F is still among the most popular Medigap plans. Plan G has a traditional and high deductible option that both consistently remain at the top of the list for most enrollments. After Plan F, Plan G has the most comprehensive coverage. The traditional option covers everything except for the Part B deductible; which in 2024 is $240. As you might assume, the more comprehensive coverage and higher monthly premiums go hand in hand. The third most popular plan is Plan N. Plan N has risen in popularity, along with the high deductible version of Plan G, as it provides a lower monthly premium yet still limits out of pocket expenses greatly.
How and when do I enroll?
To see if you qualify for a Medicare Supplement plan, you can call 321-261-4681 or click here to schedule your appointment. We are with you from Day 1 and we will continue with you as long as you will allow us. Supplement plans typically require medical underwriting, not everyone will qualify for a plan. There is a period of six months, after your Medicare begins, known as a guaranteed issue period. During these first six months you can choose any Medigap plan you like with no medical questions. The price will be based off of age, gender, zipcode, and tobacco status. Medicare supplement plans do not have an annual enrollment period, the benefits do not change.
Medicare Advantage aka Part C
Medicare Advantage plans go by a few names “MA” “MAPD” “Part C” or managed care plans and are offered by private insurance companies approved by Medicare. Medicare Advantage plans are very different from Medigap, even though they are often confused. With an Advantage plan the private insurance company billed in place of Medicare. These “all-in-one” plans manage your part A and B benefits and often include some benefits that Original Medicare doesn’t cover. Often these plans will have a $0 monthly premium, yes that’s right ZERO! There will be out of pocket costs like copays or coinsurance, but they will not exceed the annual out of pocket max which varies from plan to plan. Many insurance agents and brokers will state misleadingly that a Medicare Advantage plan replaces your Oringinal Medicare benefits. More accurately, the plan manages your Part A and B benefits along with other benefits; you do have to be enrolled in Medicare Parts A and B to qualify for an Advantage plan. You will remain enrolled in Medicare but the benefits will now come from the insurance company managing the Advantage plan and not directly from Medicare.
Network of providers
One of the biggest differences in these plans is limited provider networks. While some of these companies have fairly large networks, it does not compare to Medicare and the 98% of doctors that accept it. Some plans will require a referral from the Primary Care Physician to see Specialists or for other procedures and therapies. Some procedures will also require “prior authorization” from the insurance company in order for them to cover the service. They may deny the procedure or recommend an alternative first. The providers choose which insurance carriers they want to contract with as as well as which plans they are willing to accept from that carrier. They can add new contracts at any time and they can also terminate a contract or close the panel to any new members under a certain carrier. Some Advantage plans use a PPO network and have out of network benefits, this is not the same as Original Medicare. To use the out of network benefits, the non-contracted provider must agree to bill the plan.
Annual Changes & Plan Area
Unlike Medigap plans, Part C plans have an annual contract. Every year the insurance companies update plans according to CMS guidelines and submit the plans for approval. Every plan being offered has been approved by Medicare. The annual changes can range from a change in benefit amounts for dental or vision, changes in copay or coinsurance amounts, introducing new plans, or removing plans. Another key feature of these Part C plans is that they vary greatly from one state to another. Even between neighboring counties plan benefits can be different. One person’s experience on a plan may be drastically different from their friend or relatives experience on a plan with the same name in a different part of the state or country. It is important to keep in mind that each insurance company may have multiple plans in one area, and that each of these plans will have different benefits. If you are enrolled into a Medicare Advantage plan and you move to a new area you will need to look for a plan in the new area. At Virtue Senior Benefits , we are licensed in every state except fro Alaska and Hawaii, and we help our clients with this process every step of the way. If you have recently moved and need help searching for a new plan, give us a call today!
How and when do I enroll?
The eligibility is similar in the regard that you must be enrolled into Medicare Parts A and B to enroll into an Advantage plan. However, there is no medical underwriting with these plans. As long as the enrollee has a valid election period, they can enroll into any traditional Medicare Advantage plan available in their zipcode. Traditional plan, because in some areas there are Special Needs plans available require further qualifications. There are several enrollment periods for Medicare Advantage throughout the Year. The Annual Enrollment Period and the Medicare Advantage Open Enrollment run during the same time each year. Each person becoming eligible for Medicare gets an Initial Enrollment Period based on when they become eligible, and throughout the year there are Special Enrollment Periods based on certain life events.
Conclusion
Ultimately, it’s important to compare both options carefully before deciding. To help make heads or tails, be sure to speak with a licensed insurance agent at Virtue Senior Benefit request a free consultation today by calling us at 321-261-4681 or filling out our “Contact” form on this website. As an Independent Insurance Agent, we have a successful track record and numerous testimonials to support our expertise. Let us reduce your health care costs!
We look forward to helping you choose the right plan and answering all of your medical coverage questions!