On Medicare, you have two main options to choose from for your coverage. One is Original Medicare Parts A and B plus a Medicare Supplement and possibly a Part D prescription drug plan. The other option is a Medicare Advantage plan, many of which include Part D prescription drug coverage.
There is no one-size-fits-all plan. It’s important to be educated about the available options so you can make an informed choice and enroll in a plan that fits your needs. Confused about your Medicare coverage options?
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The BIG difference between Medicare Supplements and Medicare Advantage Plans
We’ll look at the differences between these two options in detail, but first it’s important to get a sense of the big difference between these two options in how you pay for your medical care. With either option you are required to continue paying your Medicare Part B monthly premium.
With a Medicare Supplement, you will also have a Medicare Supplement plan premium. However, depending on your plan, you will have few or no deductibles, co-pays, and co-insurance to pay after receiving medical services.
With a Medicare Advantage plan, you may have to pay a plan premium, although some plans have zero dollar monthly premiums. With a Medicare Advantage plan, you will have deductibles, co-pays, and coinsurance amounts to pay after you receive medical services.
If you would prefer to pay a regular, predictable, monthly premium and not have to worry about extra charges when you receive medical care, then you may be interested in a Medicare Supplement.
If, however, you would prefer to have a low or possibly zero dollar monthly premium and pay for medical services as you use them, a Medicare Advantage plan may be a better fit for you.
Now let’s look at more of the differences between Medicare Advantage plans and Medicare Supplements.
Which coverage option offers Medicare Parts A and B coverage, also known as Original Medicare?
Both do. With Original Medicare and a Medicare Supplement, Medicare Parts A and B are your primary coverage, and the Medicare Supplement helps to fill in the gaps that would otherwise be your financial responsibility: things like deductibles, co-pays, and coinsurance.
Medicare Advantage plans must, by law, cover everything that is covered by Medicare Parts A and B, though in a Medicare Advantage plan, the insurance company is your primary coverage, not Medicare.
Are there provider networks?
With a standard Medicare Supplement, you are allowed to see any provider who accepts Medicare. Medicare Supplement Med-Select plans are available in some areas and offer lower premiums in exchange for using network hospitals (an sometimes doctors) for all non-emergency inpatient care.
Medicare Advantage plans require that you use network providers. Some Medicare Advantage plans provide limited coverage if you use out-of-network providers.
Do I need referrals?
With a Medicare Supplement plan, you do not need referrals.
With a Medicare Advantage plan, you may need referrals to see specialists depending on the specific plan.
Does the plan have premiums?
Yes, Medicare Supplement plans have premiums that vary depending on which plan you choose.
Medicare Advantage plans also have monthly premiums, but there are some plans that have zero dollar monthly premiums.
Are there co-pays?
Very few Medicare Supplement plans have co-pays, and those that do are only for office visits and emergency room visits.
Medicare Advantage plans do have co-pays that vary depending on the medical service received.
What about deductibles?
Medicare Supplements generally do have deductibles. At the more comprehensive level of coverage, that deductible is the low Medicare Part B annual deductible only. There are also high deductible Medicare Supplement plans for those who would like lower monthly premiums with protection for large medical expenses.
Medicare Advantage plans may also have deductibles. These deductibles can be for medical services, or drug coverage, or both, and vary from plan to plan.
How are claims processed?
With Original Medicare and a Medicare Supplement, all claim determinations are made by Medicare. If Medicare approves a charge, the Medicare Supplement company must pay your provider. The Medicare Supplement company cannot dispute a claim approved by Medicare.
Medicare Advantage claims are determined by the Medicare Advantage company. Although Medicare Advantage plans must have coverage as good as or better than Original Medicare, the coverage is not identical to Original Medicare, so it is important to look carefully at the coverage offered before enrolling.
Are the benefits the same from one plan to another?
Medicare Supplement coverage is standardized by law. That means if you choose a level of coverage, in most states the plans are lettered A through N, that coverage will be the same from every company in the state. For example, a Plan G from one company will provide identical benefits to a Plan G from another company. However, even though the coverage is identical, the monthly premiums and underwriting criteria are very different between companies, so it is important to comparison shop.
Medicare Advantage plans are different in the coverage they provide, the network of providers, and potential out-of-pocket costs. Like every other type of Medicare plan, it is important to compare plans holistically to find the best fit for you.
When can you enroll?
Medicare Supplements are month-to-month plans that accept enrollments at any time during the year. Most will require an applicant who does not have a guaranteed issue right, and isn’t in the first six months of Medicare Part B coverage, to answer health questions to be approved for coverage. And based on those answers, applicants can be denied, depending on health conditions.
Medicare Advantage plans are available for enrollment during the Initial Coverage Election Period surrounding a person’s initial Medicare enrollment, and then every year between October 15th and December 7th. Occasionally, there are also other periods that become available for individuals to join, drop, or switch Medicare Advantage plans.
A licensed broker will be able to make sure you are comparing apples to apples when you are looking at whether to enroll in a Medicare Supplement or a Medicare Advantage plan. If you have questions, watch our free online video to learn how to find the best Medicare coverage for you or reach out to our office at 877-312-1414. We’re always happy to answer questions!
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