Medicare Advantage vs Medicare Supplement Plans

By October 22, 2020Health Insurance

If you’re trying to decide between a Medicare Advantage plan and a Medicare Supplement plan, remember that there isn’t one correct choice for everyone. Your health needs and monthly budget may fit one plan but not another. Meanwhile, a friend in your age group may have a different budget and needs, so they may be better off with a different plan. Before you decide, learn about cost considerations and coverage options for Medicare Advantage plans and Medicare Supplement plans.

What is Medicare Advantage?

Medicare Advantage, also known as Medicare Part C, is a health plan that covers all of your Part A (hospital insurance) and Part B (medical insurance) benefits and preventive care. It may also cover extras such as:

  • Prescription drug coverage
  • Vision and hearing
  • Gym memberships

What are Medicare Supplement Plans?

A Medicare Supplement plan, also known as Medigap, is additional coverage that supplements Part A and Part B (Original Medicare) coverage.

A Medicare Supplement plan helps with some or all of the out-of-pockets costs you’re left with after Original Medicare pays its share. This is where the “gap” in Medigap comes from. Medigap plans may “fill in the gaps” of coverage that Original Medicare does not offer.

Medicare Advantage vs Medicare Supplement Coverage

If you’re looking to get additional coverage to complement Original Medicare, you have two options to choose from: Medicare Advantage or Medicare Supplement coverage. Both options are provided by private insurance companies, like Independence Blue Cross.

What do Medicare Advantage plans cover?

Medicare Advantage plans are a type of Medicare health plan administered by private health insurers that contract with Medicare to provide Part A and Part B benefits as well as preventive care.

Because Original Medicare doesn’t provide prescription drug coverage, many Medicare Advantage plans also offer prescription drug coverage. Some Medicare Advantage plans also include additional benefits as well, such as dental services or fitness programs. IBX offers two types of Medicare Advantage plans: Keystone 65 HMO and Personal Choice 65 PPO.

Medicare Advantage coverage and costs can vary from year to year, which can impact you financially, so it’s important to make sure you are familiar with current plans.

What do Medicare Supplement plans (or Medigap) cover?

Medicare Supplement plans, or Medigap plans, are sold by private health insurance companies and may help to cover some of the following:

  • Copayments
  • Coinsurance
  • Deductibles

There are 10 types of Medigap plans, and these 10 types are exactly the same throughout the country.

The difference between Medicare Advantage and Medigap is that Medicare Advantage replaces Original Medicare and pulls your benefits together into one plan. A Medigap plan doesn’t replace Original Medicare; it’s an extra you can add on top of Original Medicare.

Remember that Medigap plans don’t include Part D prescription drug coverage. So, if you choose a Medigap plan, make sure you get Part D prescription drug coverage to avoid a penalty. Medigap plans also don’t provide extra benefits you may have with a Medicare Advantage plan, like dental or vision coverage.

However, Medigap plans may cover other services that Original Medicare does not cover, such as international travel emergency care.

Medicare Advantage Costs

While cost is a factor when choosing a health plan, always weigh the costs against the benefits you are getting. A plan may have a lower premium, but if you have a lot of health care needs, you may end up paying more out of pocket because your plan doesn’t offer enough coverage.

The costs of a Medicare Advantage plan can vary widely depending on a number of factors. When deciding on a Medicare Advantage plan, there are a few things to weigh:

  • Whether the plan charges a monthly premium (some plans offer premiums as low as $0)
  • The cost for each service/visit (copayments or coinsurance), both in-network and out-of-network
  • Whether the plan has an annual deductible, either for medical and/or prescription drugs
  • The maximum out-of-pocket limit
  • If the plan has any network restrictions
  • If your doctors and specialists are in the plan’s network
  • If the plan covers prescription drugs, and if it covers your specific medications
  • If the plan offers any additional benefits, such as vision or dental coverage.

Medicare Supplement (Medigap) Costs

Medicare doesn’t pay the costs of a Medigap policy. You will have to pay the premiums for a Medigap policy. And while Medigap coverage typically means lower out-of-pocket costs than a comparable Medicare Advantage plan, Medigap plan premiums are usually higher.

What’s the Right Plan for You?

If you are trying to decide between a Medicare Advantage plan or a Medicare Supplement plan, IBX can help you make the decision that’s right for you.

Website last updated: 10/14/2020

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Independence Blue Cross offers Medicare Advantage plans with a Medicare contract. Enrollment in Independence Medicare Advantage plans depends on contract renewal.

Independence Blue Cross offers products through its subsidiaries Independence Hospital Indemnity Plan, Keystone Health Plan East and QCC Insurance Company — independent licensees of the Blue Cross and Blue Shield Association.

 

Theresa Lauer

About Theresa Lauer

Theresa Lauer is the Director of Medicare Broker Sales for Independence Blue Cross. She is a long-time leader in cultivating, developing, managing, and leading profitable sales programs. In her current role, Theresa and her team forge new opportunities each day within the Independence five-county southeastern PA area.