06/07/2024
Medicare Supplement (Medigap) or Medicare Advantage Plan
When coming onto Medicare one of the biggest questions is should I go with a supplement or Advantage plan, and there is no easy across the board answer for everyone. So lets talk about the difference between the two.
The Medicare Supplement or Medigap works along with Medicare Parts A and B. Part A picks up 80% of your hospital bills (kinda like room and board in the hospital) and Part B covers 80% of your doctor bills. The supplement then covers the other 20% Supplements tend to be more expensive upfront in the form of higher monthly premiums, but have little to no cost sharing such as copays or coinsurance. They are not restricted by networks and are accepted at all locations that take Medicare. Also, supplements are non-managed care meaning if you doctor says you need a new knee you just schedule it and go get it done. Supplements do not cover dental, hearing, vision, or prescriptions. This requires you to purchase additional policies to cover those items. With the exception of the Initial Enrollment Period, you'll have to qualify medically for a supplement.
Medicare Advantage is typically cheaper up front. These plans can be as low as no monthly premium, so can even give you money back from your Part B premium. These plans are restricted into networks and are managed care. So if your doctor says you need a new hip, the insurance company can say well lets try physical therapy first. Doing so helps to keep the premiums lower. Medicare Advantage also provides dental, hearing, and vision benefits. Most will also cover prescriptions too. All that said, there are still some gaps in the Medicare Advantage plans, for example Out of Pocket Maximums. This is the Max amount you can pay in a given year. So say you have a Max Out of Pocket cost of $5,000.00, and your unfortunately come down with cancer. Medicare Advantage Plans only cover 80% of the cost of treatment. Leaving you with the rest until you've paid that Max Out of Pocket amount. With that Medicare Advantage can still be a great option for a lot of people, and by pairing with some other products you can be protected from some of the possible unexpected costs. Unlike supplements, there is no underwriting for an advantage plan, so you do not need to qualify medically.
As you can see, the decision for what to do with your health coverage can get pretty confusing. Both options include some great coverage benefits but neither one provides a clear answer for everyone. Everybody's health care needs are different.
