Medigap vs. Medicare Advantage: What’s The Difference Between The Two?

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We all have heard of Medicare and are kind of familiar with what it is all about. But despite people’s familiarity with the federal health insurance program, it doesn’t guarantee that they fully understood everything about it.


Medicare and any of its parts are confusing. You have to read and understand a lot of information from the Medicare government website if you want to know the full details of the program. There will be a point that you have to weigh Medigap vs. Medicare Advantage to know which one of them will serve your needs best.


The Medicare Program

Basically, Medicare has four parts – Parts A, B, C, and D. Just a quick overview of the four parts of Medicare: Part A covers hospital services, Part B covers outpatient, doctors, Medicare procedures and equipment, and Part D is for prescription drugs. The important thing to know about them is that the said parts do not cover deductibles, co-pays and other medical expenses that could give you the burden of your life especially when you become seriously ill.


Medigap vs. Medicare Advantage

Medicare doesn’t have any limit on how much you can spend out of your own pocket. Therefore, your medical bills can increase immensely, most likely when you need certain costly treatments such as chemotherapy. If you have TRICARE or other retiree health plan, it can take all or part of the cost. But if you don’t have one, you should know about another two options, the Medicare Advantage, and Medigap (Medicare Supplement Plan).


The Difference between Medicare Advantage and Medicare Supplements

You have to make the most out of your Medicare coverage and minimize your out-of-pocket costs as much as possible.

How can you do that?

By getting a policy that works well with your health care needs. You’ll face a dilemma between medicare advantage vs. medicare supplement benefits. Let’s discuss first the difference between the two.


Medigap also called Medicare Supplement plans will help protect you against any out-of-pocket costs or the debilitating Medicare gap. This option covers all or part of the Original Medicare’s out-of-pocket costs.


How do Medicare supplement plans work?

After the Medicare has paid its part in your medical bill, the remaining will then be forwarded to Medigap. Your Medigap insurance will then pay its part in your bill.


The different types of plans

Medigap has various options that you also need to compare (talk about additional confusion) and those are sorted by letters. Options are A, B, C, D, F, G, K, L, M and N which are all standardized by Medicare. The difference between the variation of a Medigap plan is the level of their coverage and the cost that you will pay to the private insurance provider.

Of all the types of Medicare supplemental coverage, Plan F is the most popular. People usually get Medigap Plan F because it offers additional benefits and covers almost all the gaps in Medicare. Someone has this type of Medigap will pay few or no out-of-pocket cost at all.

Medicare Supplemental insurance will cover your medical needs whenever or wherever you see any doctor or facility provided that it accepts Medicare.


When to enroll

If you want to join Medigap, make sure to do so during your open enrollment period (OEP). Enrolling in Medigap during OEP comes with benefits, like guaranteed issue rights. Guaranteed issue rights will ensure that you will not be rejected and obtain a plan despite having pre-existing conditions.

There’s a monthly premium that you need to pay on top of what you are paying for other parts of Medicare (Part B and D, and some people pay for Medicare part A). Medigap don’t cover drugs or medicines. If you want one, you may get a separate coverage or the Part D of Medicare.


Related: Why Medigap is right for you? Here are 9 reasons!


Medicare Advantage Plan

Also called Medicare part C, Medicare Advantage plan is also provided by private insurance companies approved by Medicare. Medicare beneficiaries may opt to receive their Part A and Part B benefits through a Medicare Advantage plan. Instead of getting and paying for the three different parts of Medicare (Parts A, B, and D) you can enroll in this option to obtain everything the three parts are providing and might even receive additional benefits. In most cases, you will pay just the Medicare Advantage premium along with Part B premium.


The coverage

Doctor’s office visits, lab works, surgery, and other medical services are often covered by Advantage plan after you paid certain co-pay. Also, this option could offer HMO or PPO network plans and put a yearly limit on your total out-of-pocket expenses which depends on your area.

Depending on your private insurance provider, rules and benefits can vary. Example, since most Advantage plans provide prescription drugs, some private plans may demand you to obtain a referral from a specialist while others don’t.


Your out-of-pocket costs

Medicare advantage plan usually has deductibles and co-pays. It also has an annual out-of-pocket limit, which means once you have paid the deductibles and copays that completes the annual out-of-pocket limit, the plan will pay all of your medical bills for the rest of that year.


Once you are enrolled in Medicare, you can then enroll in Medicare Advantage and switch or drop plans once a year during its open enrollment period.


Medigap vs. Medicare Advantage: Side by Side Comparison

To help you compare the two different plans, here’s a chart to summarize their details:

Medigap vs Medicare Advantage plan comparison chart


Also read: Why Medicare Advantage Plans are bad?


Which of the two is better?

You can’t have both Medigap and Medicare Advantage plan. And it is illegal for an insurance company to sell you both policies. Since you have to choose only one, here are some things to consider:


1. Premiums

Medigap may have a higher cost of monthly premium but you may have a lower amount of out-of-pocket expenses compared to what you might have with Medicare Advantage.

Medigap may be good for you if you are someone who requires a lot of medical services that often exceeds to what Medicare will only cover.

Advantage plans, usually cost less and cover more services which may be good for your, budget.


2. How and where you live

If you often travel from one state to another throughout the year, a Medigap Plan is a good option for you. Some types of Medigap Plans can provide coverage when traveling outside the US and can provide you with coverage in all 50 states.

On the other hand, Advantage plans can’t travel with you. Often, Medicare Advantage plans only operate to certain locations and might not be able to travel with you.


3. Preferences

If you are someone who has preferred facilities and doctors, Medicare Advantage may not be for you. Because it limits your options of doctors and facilities within the HMO or PPO. Also, it may or may not cover care outside the network.

Medigap, on the other hand, will cover you if you go to any doctor or facility that accepts Medicare. If you need a particular specialist or hospital, check first if your chosen plan covers it.


get medigap quotes to minimize deductibles copayments and coinsurance


4. Pre-existing condition

There is a Medicare Advantage Special Needs Plan (SNP) which provide coverage only for people with specific conditions or characteristics.

See if you qualify for this option. This is good because Medicare SNPs tailor their benefits specifically to meet the needs of the people they serve.


If you don’t qualify, then I suggest you should plan carefully for future rainy days. Treating something serious can be expensive and too heavy to handle. Paying the out-of-pocket cost of every medical service you need can be too much in the long run. If that is the case, you can consider getting Medigap to cover your pre-existing condition’s out-of-pocket expenses.


5. Disability and under 65

If you are still under 65 and are disabled, Medigap might be an expensive option for you. Though you can get a policy even if you are under the age of 65, your plan options are limited.


But once you turn 65, you’ll have your Medigap open enrollment period and have guaranteed issue rights just like other regular enrollees. take advantage of this time to land a Medicare Supplement to support your growing healthcare needs.


6. Out of pocket vulnerability

In Original Medicare, there are out-of-pocket costs that you need to shoulder. You’ll also need to pay copays, coinsurance and even face high out-of-pocket maximum with Medicare Advantage Plans. Additionally, you’ll also need to shoulder other out-of-pocket costs for prescription drug benefit of a Medicare Advantage plan.


If you feel that you are not capable of handling a lot of out-of-pocket expenses, Medigap is the right choice for you. There are Medigap plans that will cover most of the costs not covered by Medicare leaving you little to no out-of-pocket costs to pay.


On the other hand, choosing either Medigap or Advantage plan will still leave you paying for the out-of-pocket cost from prescription drug coverage.


7. Available options


Don’t forget to consider the options that are available in your area.

Although there is a wide range of Medicare Advantage and Medicare Supplement plans in the market, options and plan availability may vary from one location to another.


8. Benefits

What are the benefits you really care about? Do you need dental and vision care coverage, Prescription drug or out-of-pocket cost security?

Contemplate about what you need and the benefits that a plan should need to have.


Final words

Making a decision about which Medicare plan is best for your needs can be confusing. It is highly recommended to have a good understanding of Medicare and differences of benefits between Medicare supplements and Medicare Advantage first. Afterward, you can seek the help of an expert or licensed insurance agent.

The internet provides a lot of tools to give you the information that you need. Aside from visiting, you can also find useful information about Medigap, and even obtain free quotes here at FreeMedSuppQuotes.

Remember, getting health coverage is highly personal. Don’t just get what is popular or what your friends or relatives have, but get the option that suits your needs best.


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