It’s an important question and would seem relatively simple to address, but the answer(s) are a moving target which changes annually because the private insurance companies and the Center for Medicare Services (federal agency which administers the Medicare program) change the policies, prices, and procedures annually. AND, Medicare Advantage plans are not uniform….. no one answer is the same for all carriers and all plans. Medigap policies/benefits are uniform regardless of the carrier.
First, I encourage you to watch our video(s):
This is our attempt to simplify the answers available to YOUR QUESTION/THE QUESTION.
Now, in an attempt to drill down on the differences between Medicare Supplements/Medigap Policies and Medicare Advantage Plans………. Let’s consider the following:
1) CHOICE: Medigap policies allow the insured to choose their preferred physicians and caregivers.
Medicare Advantage plans normally require “plan members” to use “in network” physicians/caregivers or pay significantly higher “co-pays” for “out of network” providers.
2) PORTABILITY: The benefits of Medigap policies are normally available nationwide….. independent of your temporary location/address or your future permanent location/address.
Medicare Advantage plans require that you permanently reside within the plan’s “benefit area”, typically, a zip code. If you move, you must re-enroll with a plan for your current zip code. Thus, potentially requiring the choice of a new PCP (primary care physician) and new specialists. This is a potential inconvenience for some Medicare Advantage members. Also, if you are traveling and require care…… you MAY experience “out of network” charges from your Medicare Advantage plan.
3) CO-PAYMENTS, DEDUCTIBLES, AND CO-INSURANCE: Medigap policies are UNIFORM and specifically outline your potential exposure to expenses. Plan G is quite clear…. Your risk is the Part B deductible and the premium expense for your Medigap policy and your Part D (prescription drug plan = PDP).
Medicare Advantage plans ARE NOT UNIFORM and your exposure to care expenses may vary significantly based upon your care. An annual maximum annual “out-of-pocket” provision is available ….. which ranges from approximately $3,200 to $10,000+…….. annually. This “out of pocket” maximum is generally much higher than the exposure one would experience with a Medigap policy. This is a potential concern of Medicare Advantage members.
4) INSURABILITY AND UNDERWRITING: Both Medigap and Medicare Advantage plans allow those turning age 65 to purchase/enroll without underwriting. (generally speaking)
After an initial enrollment and subsequent years…… if one wishes to change Medigap policies, the applicant may be subject to underwriting by the new carrier.
Medicare Advantage plans (generally speaking) require no underwriting. Thus, a discerning consumer should carefully consider why….. what risk are they, as consumers, accepting within a Medicare Advantage plan in order to gain access to “no underwriting”? Insurance companies do not abandon underwriting without imposing an offsetting source of income to offset the potential risks……. C0-PAYMENTS AND COINSURANCE.
5) HOSPITALIZATION: Medigap policies cover hospitalizations very well.
Medicare Advantage plans require a co-payment which varies from $250/day to $350/day (or more) for days 1 through 4,5,6…… each carrier/plan is different. (generally speaking)
6) PRESCRIPTION DRUGS: Medigap policies generally DO NOT COVER prescription drugs. One must purchase a PDP (prescription drug plan) based upon their specific drugs, carrier preferences, etc.
Medicare Advantage plans can include prescription drug coverage subject to a TIER RATING. This is normally a simple matter, but may become complicated for specific drugs.
7) NOTHING IS FREE: Medigap policies require premiums and the purchase of a PDP (prescription drug plan).
Medicare Advantage plans contain a series of co-payments, deductibles, and coinsurance…… a significant risk is the co-payment required for hospitalization.
8) VISION, HEARING, DENTAL: In general, Medigap policies do not provide these benefits.
Medicare Advantage plans may include some benefits for these issues. The benefits tend to be limited. Read the fine print.
This is a “best effort” attempt to disclose some of the significant differences between Medigap and Medicare Advantage policies/plans. It is not all inclusive. An experienced independent agent may assist your decision by listening and asking focused questions regarding your preferences and concerns.
Medigap policies have benefits which are uniform….. Medicare Advantage plans do not. Some agents do not take the time to explain the details of the differences….. We attempt to do so. Summary of Benefit documents, Evidence of Coverage documents, and numerous documents from the Center for Medicare and Medicaid Services are important references for a prudent consumer. https://www.rodenfin.com/
The decision to use a Medicare Advantage plan instead of a Medigap policy is a decision which should consider the “fine print” within the Medicare Advantage plan.
NOW……. At Roden Financial Solutions, we sell both….. Medigap and Medicare Advantage……. We simply try to match the solution with the need/lifestyle/budget
We do not favor one plan over the other…….. both Medigap and Medicare Advantage plans have their place. Some consumers prefer Medicare Advantage plans because of the affordability of these plans.
