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Medicare Advantage vs Medigap – Making a Wise Choice

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When it comes to deciding on supplemental Medicare coverage, such as Medicare Advantage vs. Medigap, there are a few options for you to choose. If you find comparing coverages confusing, you are not alone! Before we compare these 2 options, let’s first take a look at the need for some type of supplemental coverage beyond Original Medicare (Part A and B). Then, we will discuss the differences between Medicare Advantage vs. Medigap so you can decide which works best for you.

Why the need for supplemental Medicare Coverage?

Original Medicare (Part A and Part B) have gaps in the coverage they offer, meaning not everything is covered. For instance, Part A of Original Medicare covers inpatient hospital services while Part B covers outpatient medical services. At face value, it seems like this is rather comprehensive; however, Original Medicare has high deductibles and copayments and unlimited out-of-pocket risk.  This means that a chunk of the cost of procedures and services must be paid out-of-pocket by the Medicare beneficiary.

Take for example knee replacement: as an outpatient procedure, Medicare Part B would cover 80% and the patient would be responsible for the 20% co-insurance. With a surgery cost of about $60k, the patient’s cost is $12k! Those 20% co-insurance bills can create a strain on any bank account. In addition, Original Medicare does not cover the typical costs related to dental, vision, prescription medications, and long-term care.

Comparing Medicare Advantage vs. Medigap

The two main plans selected by Medicare beneficiaries to fill in the holes left by Original Medicare as mentioned above are:

  • Medicare Advantage (also known as “Part C”)
  • Medigap (commonly referred to as “Medicare Supplement”)

Let’s take a look at Medicare Advantage vs. Medigap.

Medicare Advantage (Part C or “MA”)

According to

Medicare Advantage Plans are a type of Medicare health plan offered by a private company that contracts with Medicare to provide all your Part A and Part B benefits.

In addition, Medicare Advantage (Part C) does cover dental procedures/cleanings, eye exams and glasses, prescription medications, and sometimes even offer fitness benefits.

MA plans are tied to medical group networks in your local area. Referrals for specialists are required, and you will need to choose a primary care physician (PCP). You do have the choice between HMO and PPO. PPO does give you more freedom to choose your provider, but it could cost more out-of-pocket to go outside of the network.

Also, most Medicare Advantage plans come with a built-in drug benefit (Part D) which is coverage for prescription medication. Premiums through Medicare Advantage are either very low or zero, but you must remain enrolled in Part A and Part B while paying for those. Keep in mind that depending on funding from the government, Medicare Advantage costs can vary from year to year.

Medigap (Medicare Supplement)

Medigap, also referred to as Medicare Supplement Insurance, are standardized plans and organized by letters, A-N. The goal of Medigap plans is to help fill in the financial gaps that a beneficiary with only Original Medicare may experience through deductibles, co-insurance, co-pays, and catastrophic expenses.

Medigap works with you to help cover the cost of your deductibles, co-insurance, co-pays, and other risks. and copays. When you are provided a medical service, your Medicare insurance is billed, then the remainder of what needs to be paid is sent through the Medigap policy to be approved. If approved, then Medigap will pay the remainder. Copays and deductibles under this plan are generally predictable. Also, there is no need for a specialist referral, and any provider that accepts Medicare will accept the Medigap policy. However, Medigap does not cover prescription medication. Medigap plans do not require you to answer health condition questions in order to qualify when you apply for this type of coverage during the initial enrollment window.  You will automatically qualify simply by having Parts A and B of Medicare.

Medicare Advantage and Medigap do not work together. You are enrolled in one or the other.

Choosing the Best Plan for You

In conclusion, choosing the “best” policy will depend on your current health conditions, budget, and personal preferences for healthcare. Oftentimes, consultations are needed to help Medicare beneficiaries match up what they need with what is available. Our job is to help you decide which plan works best for you and how to enroll in that policy. All consultations are completely free and come with zero obligation.

Schedule your free consultation now by calling (714) 834-1322.

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