by Russell Noga | Updated November 24th, 2023
Original Medicare is a government-sponsored health insurance program that is intended for people aged 65 and over. It’s comprised of a variety of parts and the coverage and benefits that each part provides differ.
While Medicare can certainly be beneficial, it does have some distinct issues; namely, it doesn’t cover all of your health-related expenses. If you need coverage for services that Original Medicare doesn’t cover, you might be thinking about investing in a Medicare Supplement or a Medicare Advantage plan.
What’s the difference between Medicare Supplement and Medicare Advantage plans? To make the most informed decision for your healthcare coverage, keep on reading to learn more about these two private insurance options.
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What’s Medicare Advantage?
Medicare Advantage – also known as Medicare Part C – bundles Original Medicare (Part A and Part B), and may also include the coverage that Medicare Part D provides (prescription drug coverage). In other words, Medicare Advantage plans aren’t an add-on for Original Medicare, but rather, they’re an alternative form of coverage.
Medicare Advantage plans are sold by Medicare-approved private insurance companies. These plans provide the same coverage as Part A and Part B, as well as additional benefits and perks that the insurance company you purchase the plan from offers; hearing, vision, and dental coverage, and even gym memberships, for example.
Types of Medicare Advantage Plans
- Health maintenance organization plans (HMOs). HMOs provide coverage for medical care and services that are offered by providers who operate within a specific network. If you receive are from an out-of-network provider, you’ll have to pay for a portion or all of the bill.
- Preferred provider organization plans (PPOs). You’ll pay less when you receive care and use services from providers within a specific network, and you can see out-of-network providers, but for a higher price.
- Private fee-for-service (PFFS) plans. PFFS plans can be based on a network of providers, but they may require out-of-network providers to accept reimbursement from Medicare, as well as the PFFS Medicare Advantage plan’s terms and conditions. These plans usually don’t include coverage for prescription drugs.
- Special needs plans (SNPs). SNPs are custom-designed to provide the medical needs of beneficiaries who have been diagnosed with chronic health conditions, such as diabetes or high blood pressure.
- Medical Savings Account (MSA) plans. These plans feature a dedicated savings account and a high deductible, and they do not offer coverage for prescription drugs. Funds for the medical care that beneficiaries require are placed into the account on a monthly basis.
- HMO Point-of-Service (HMO-POS) plans. These plans are a hybrid of HMO plans. They allow beneficiaries to see out-of-network providers for a fee. Deductibles are separate for in-network and out-of-network charges.
Benefits of Medicare Advantage
Medicare Advantage plans offer the same coverage that Medicare Part A and Part B offer, and most usually offer coverage for prescription drugs (Part D). These plans also provide coverage for expenses that Original Medicare doesn’t provide.
Medicare Advantage Eligibility
Typically, Medicare Advantage is available for people who are 65 and over. People who are younger than 65 and who have certain disabilities or who have end-stage renal failure may also qualify for Medicare Advantage. In order to enroll in a Medicare Advantage plan, you have to be enrolled in Medicare Part A and Part B.
What is Medicare Supplement?
Medicare Supplement plans (Medigap) are also sold by private insurance companies and are designed to cover the expense that Medicare Part A and Part B (Original Medicare) doesn’t cover. These plans work alongside Original Medicare and feature a separate premium.
Once you meet your premium, after Medicare covers the cost of the medical care and services you receive, Medigap will kick in and pay for the remainder of the expenses a specific plan covers.
Types of Medicare Supplement Plans
There are a total of 10 Medicare Supplement plans. These plans are named for letters (A, B, C, D, F, G, L, M, and N) and all are standardized, meaning that Plan N must provide the same coverage, no matter where it’s purchased or what insurance company it’s purchased from.
Coverage varies from plan to plan; however, most cover copays, coinsurance, and deductibles. It’s important to note that as of January 1, 2020, new Medicare enrollees can no longer purchase Medigap Plan F, which provides coverage for the Part B deductible; however, those who had Plan F before this date can keep it and those who were eligible for Medicare before this date but haven’t yet enrolled in Original Medicare may still be able to purchase it.
Benefits of Medicare Supplement Plans
Medicare Supplement plans make the out-of-pocket expenses for Original Medicare easier to predict and more manageable. The monthly premiums are fixed (though they can change each year). Additionally, unlike Medicare Advantage, there are no networks; with a Medicare Supplement plan, you can use any provider that accepts Medicare, and some plans will even cover your expenses if you see a provider that doesn’t accept Medicare.
Medicare Supplement Eligibility
In order to purchase a Medicare Supplement plan, you must be enrolled in Medicare Part A and Part B. You must also be 65 years of age or older; however, several states do offer Medigap for individuals with disabilities who are younger than 65. Additionally, you must live in the state the Medigap plan you are applying for is offered when you apply.
If you’re turning 65 and you are enrolling in Medicare, the ideal time to purchase a Medigap plan is during the Medicare Supplement Open Enrollment period. This 6-month period starts on the first day of the month you turn 65 and are enrolled in Part B.
During this period, you are not subjected to medical underwriting, so your medical history won’t affect your premium and you can’t be denied coverage. After this period, health insurance companies can impose medical underwriting when considering your application.
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Frequently Asked Questions
What is Medicare Supplement and Medicare Advantage?
How to Decide?
When you’re trying to decide between Medicare Advantage and Medicare Supplement, it’s important to compare quotes from several different insurance companies. By filling out the form to the right, you’ll receive quotes from the most reputable insurers in your area. If you prefer, you can call 1-888-891-0229 to speak with a licensed agent.
Russell Noga is the CEO and Medicare editor of Medisupps.com. His 15 years of experience in the Medicare insurance market includes being a licensed Medicare insurance broker in all 50 states. He is frequently featured as a featured as a keynote Medicare event speaker, has authored hundreds of Medicare content pages, and hosts the very popular Medisupps.com Medicare Youtube channel. His expertise includes Medicare, Medigap insurance, Medicare Advantage plans, and Medicare Part D.