I’m a licensed Medicare insurance broker in Nashville and appointed with Aetna, Blue Cross, Cigna, Humana, United Health Care, and many more carriers. I advise people every day Medicare Advantage Plans or MediGap insurance. When I speak with people about their Medicare choices, we spend a lot of time discussing the differences between Medicare Advantage and Medicare Supplements.
Let’s try to clear up some of the confusion.
Traditional Medicare includes Parts A and B, but it doesn’t cover everything. Part A covers hospital stays and some stays in skilled nursing facilities, but the enrollee is responsible for deductibles and limits on the coverage. Part B, which is optional and requires a premium*, covers medical expenses such as doctors' visits, lab tests, outpatient procedures, etc.
To get more comprehensive coverage and reduce out-of-pocket spending for deductibles and limits on coverage, many people opt for Medicare Advantage plans or Medicare Supplements.
Medicare Advantage plans are an alternate way to get Original Medicare, while Medicare Supplements (or Medigap) work with your original Medicare coverage. Both are sold by private companies.
Let’s explore further:
Medicare Advantage (also known as Part C)
In Medicare Advantage, the government pays private insurance companies a fixed payment to provide coverage to enrollees. These plans offer the same Part A and Part B coverage as traditional Medicare (although coverage may be limited to providers is their HMO or PPO network), plus they typically offer additional benefits beyond what Part A and Part B offers. Most Advantage plans also include a Part D Prescription Drug Plan. You’re still in the Medicare program, but your benefits will be paid through your Medicare Advantage plan instead of through the federally administered program. You must be enrolled in both Medicare Parts A and B to be eligible for a Medicare Advantage plan.
Medicare Advantage plans may have physician networks, such as an HMO or PPO. Because you would be limited to network providers, Medicare Advantage plans often have lower premiums than Medigap plans - as low a $0 premium on some plans in some areas - except for your monthly Part B premiums.
Medicare Supplements (Medigap)
With MediGap your monthly premiums will be higher, but your out-of-pocket expenses will be limited and you won’t be restricted to a network of providers. You can choose a healthcare provider who participates in Medicare, and no referrals are necessary. If you enroll in a comprehensive plan like Plan F or Plan G, you will have very little out of pocket and no co-pays.
Medigap plans don’t include prescription drug benefits, so you should consider buying a separate stand-alone Medicare Part D Prescription Drug Plan to cover the costs of your prescription medications. Also, Medicare Supplement insurance plans generally don’t offer extra benefits like routine dental, vision, or hearing coverage beyond what’s already covered by Medicare.
Premiums for MediGap plans averages $100-$200 per month and vary depending on age and health condition.
If you have questions on Medicare Advantage Plans or MediGap insurance, please feel free to call me. I am located in Nashville and serve all of Tennessee. Thanks.
*The standard premium is $174.700/month for Part B in 2024.
Photo by richiedogg1981 is licensed under CC BY-NC-ND 2.0