Medicare Advantage vs. Medigap

Medicare Advantage or a Medigap Plan?  Which Is the Best Choice?  Given the high cost of care for seniors, turning 65 and enrolling into Medicare can be a retiree’s best friend.  However, Original Medicare alone does not provide enough coverage.  Most people search out additional coverage through a private insurance plans.  

One of the most important decisions an enrollee can face is whether to buy a Medicare Advantage Plan or go with an Medigap (Medicare Supplement) that works along with Original Medicare. 

The pros of a Medigap (Medicare Supplement)

Original Medicare, made up of Medicare Part A and Medicare Part B, covers expenses related to hospital visits and most other medical services.  However, it doesn’t cover all your medical expenses.  A Medigap plan, can also be called a Medicare Supplements, can help cover those medical costs.  These plans offer coverage for expenses that original Medicare leaves up to you.  

The benefits of choosing a plan include:

  • More physicians to choose from.  Most Medicare Advantage plans are network-based, meaning you have to stay in-netowrk for the lowest out of pocket costs.  A Medigap is a non-network based plan.  These plans work for any doctor who accepts Medicare (which includes many of them).
  • You don’t need to get a referral to see a specialist.  You don’t even need to choose a primary care physician with Medigap; however you should have one..
  • In 2017, there are 11 standardized Medigap plans to choose from. This means the plan are identical all across the country.  That makes it a much simpler when figuring out which plan fits your needs.  Given the many other complexities involved in setting up Medicare, anything you can do to simplify the process is a blessing.
  • With Medigap, the program simply sends a check to the doctor or facility without your involvement.  Medicare Advantage typically requires you to make co-pays directly to the provider, adding an extra level of involvement.
  • Medigap coverage typically means lower out-of-pocket Medicare expenses than a comparable Medicare Advantage plan.

The pros of Medicare Advantage

Not everyone would be better off with a Medigap plan.  Medicare Advantage comes with the following upsides:

  • Premiums for Medicare Advantage plans are typically lower than those of Medigap plans.  With Medicare Advantage premiums can be as low as $0 per month.  Compare that to the starting premium for a Medigap Plan f starting around $145.
  • Medicare Advantage plans often include Part D Prescription Drug coverage. By Law, Medigap plans cannot include drug coverage.  That requires you to buy a Medicare Part D plan if you want to cover your prescription costs. (Learn about the Medicare Part D Penalty)
  • Unlike Original Medicare, Medicare Advantage protects you with a max Out of Pocket benefit.
  • In order to get guaranteed access to Medigap, you must enroll within the seven month Medicare Enrollment Period.  After the initial enrollment period, you can be turned down for Medigap coverage due to pre-existing conditions unless you qualify for a Special Election Period.  At the end of every year, Medicare Advantage plans have open enrollment periods during which you can freely change plans.

How do you decide which is better?

When it relates to costs, a person who has a significant and expensive health problem could be better off with a Medigap Plan.  The premiums are always higher, but out-of-pocket costs are typically much lower than Medicare Advantage Plan.  If you anticipate having a lot of medical expenses, the higher Medigap premium may end up being a better deal.  

On the other hand, if you’re in good health and don’t anticipate lots of medical expenses in the near future, you can save quite a bit with Medicare Advantage’s lower premiums.  Someone with lots of prescription costs should look for a Medicare Advantage plan with drug coverage, which could save you some money on premiums compared to getting Medicare Part D.  

Keep in mind each individual situation can vary.  So before you decide, it is always best to have a local and licensed Insurance Agent at Healthy Colorado Insurance review your needs.  As an Independent Insurance Broker, we shop the market from every plan offered in Colorado.  Contact us today to learn more.






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