Are Medicare Supplements Worth it?

You’ve likely heard the hype about Medicare supplements if you have Medicare. What is a Medicare supplement? Medicare supplemental plans, also known as a Medigap plan, is a private insurance plan that limits the amount you’ll spend on Medicare charges.

As you may know, Original Medicare Part A and Part B do not cover all of Medicare’s costs. Original Medicare comes with deductibles, out-of-pocket charges, and copayments for your health care. Medigap plans are standardized based on your location. They can have a different cost based on specific demographics in other areas. Such as age, area you live in, health, etc.

There are also Medicare Advantage plans which can help cover out-of-pocket costs. If you’re wondering the difference between Medicare Advantage and Medicare supplement, there are some differences in coverage and services. Keep reading this article to find out!

What are the benefits of a Medicare supplement?

Medicare supplement insurance will pay your secondary insurance to your Original Medicare Parts A and B. This means your Medigap plan will pay after Medicare has paid the amount of the bill. You will stay enrolled in Part A and Part B, and the remaining invoice is sent to your Medigap provider. Your Medigap plans then pay their share of the bill. The top Medicare supplement plans are Plan F, Plan G, and Plan N.

With a Medigap plan, you can see any doctor or provider you wish; no referral is needed. Vs. a Medicare Advantage plans where you cannot. You will have access to all Medicare providers across the U.S. Plan F and Plan G plans offer meager out-of-pocket costs, making them a favorite among most beneficiaries. You won’t even have to worry about coinsurance or copays.

Medicare covers medically necessary doctor visits, office visits, surgery, exams and procedures, specialist care, etc. These will all be additionally protected by a Medicare supplement.

Enrolling and notifying Medicare that you have a new policy is easy. When you enroll in a supplemental plan, Medicare will be notified that you’ve purchased a new policy. It will then send your bill to your supplemental plan and Medigap coverage. No claim forms to file or anyone to call.

What are the benefits of a Medicare Advantage plan?

A Medicare Advantage plan is wholly separated from Original Medicare. A Medicare Advantage policy benefits from the plan itself, not from Medicare. A MA plan is also known as plans C. You will use your MA plan’s providers and pay copayments for health care. If you need emergency care, you will not have to use your MA plan’s provider.

Medicare Advantage plans generally have a lower plan premium than a Medigap plan. You will still pay your Part B premium monthly. Some plans even have a $0 premium in certain areas. There are different plans like HMOs (health maintenance organization) plan, a PFFS plan, PPOs, and SNPs.

A Medicare beneficiary must be enrolled in Part A and Part B to be eligible for a Medicare Advantage plan. With a Medicare Advantage plan, the premium stays low because you’re choosing from doctors and network providers from the plan. The providers and facilities will be negotiated with your plan. These may also be considered cons if you do not want to go with a network-appointed doctor/provider.

The Kaiser Family Foundation states that a Medicare beneficiary has more than 30 Advantage plans available in the zip code. Your MA plan will pay your healthcare expenses instead of having Medicare pay for them.

Medigap Vs Medicare Advantage

 With a Medigap plan, you can see any primary care doctor, have primary care visits and have the freedom to choose your hospitals. The coverage options are something that Medicare clients have been happy with. Medigap pays secondary to Medicare Part A and Medicare Part B. After Original Medicare pays, your Medigap plan will have a charge to pay its portion of the remaining bill. In these situations, each Medigap plan will offer a different benefit. The other Medigap plans offer different rules, flexibility, and convenience.

In contrast, with a Medicare Advantage plan, you will be receiving your benefits from the plan. For example, not from another source like Medicare. You will pay copayments for treatment as you have the plan. They’re essentially an alternative to Medicare.

Changing Between Medicare Supplement vs Medicare Advantage

Can you start with a Medicare Advantage plan and switch to Medigap coverage later? Perhaps you get sick and want a comprehensive Medigap policy that gives you advantages. Unfortunately, it doesn’t work this way. In addition, if you choose to leave your Medigap plan to get Medicare Advantage coverage, you may not be able to get Medigap later.

Suppose you are outside of the one-time open enrollment for Medigap. In that case, insurance companies can ask you health questions for your Medigap insurance policies. They can decline you for medications, health conditions, health status, etc. There are some exceptions you can read about in the next section to help you get enrolled.

MA plans also have a period to enroll, called the Medicare Advantage Open Enrollment. This period keeps you in a plan until the last day of the year, unless special circumstances arise that allow you to make the decision to take a special election period.

Enrolling Exceptions

There’s a trial period for new Medicare Advantage enrollees. Suppose you dis-enroll from Medicare Advantage and return to Original Medicare in the first 12 months. In that case, you can return to a Medigap plan with no underwriting. Yep, that’s right – no underwriting! After 12 months, you become subject to the underwriting process.

If you’re under the age of 65 and receive Medicare because of early disability, you can enroll in a MA plan. Many states don’t offer Medigap plans to people under 65 as federal law doesn’t require under 65 to have Medigap coverage. States including Maine, Colorado, California, Minnesota, Oregon, Missouri, and Wisconsin offer Medigap plans to people with disabilities. Whenever the person turns 65 and is eligible for Medicare due to their age and not their disability, they can get a second open enrollment window.

Choosing Between a Medicare Advantage Plan vs Medicare Supplement

If you’re debating between a MA plan and a supplemental plan – consider the pros and cons of both, your health status, budget, and eligibility. Some things to keep in mind when debating between the two are:

  • The monthly premiums
  • The plan deductible
  • Health coverage services on the plan
  • Service area where you’ll need access to medical care in the United States
  • The expected copay for your prescription drugs
  • Cost-sharing expenses

Also, remember to check the provider network and prescription drug coverage. An insurance agent can help you with this tedious task. The right broker will provide helpful assistance to make sure the plan meets your needs and lifestyle. Recommendations can only help so much; sometimes, you need an expert. In a situation when you’re nearing retirement, you will also want to save as much money as possible. Now that you have some decisions to make, you can see if others have referrals for an insurance company they like. Or even do the research yourself!

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