For the last several years, Medicare Advantage plans have been a big seller for recent Medicare enrollees. They provide plenty of extra coverage that original Medicare Parts A & B doesn’t offer. But Medigap policies are rising to the top of the Medicare market.
More and more retirees are starting to choose original Medicare coupled with a Medigap plan instead of going with the popular plan.
Deciding Between Medicare Advantage vs. Medigap
For as long as there has been Medicare and supplemental insurance, there has been the decision between these two. Both of these options do provide extra coverage that many Medicare enrollees need. They each provide additional coverage, as compared to “original” Medicare only, but there are a few stark differences between them. Beware of some Medicare myths you have heard and let us guide you in making the best decision for you.
Before we compare the two, it should be noted that there are several different types of advantage plans. The different types are: Health Maintenance Organization (HMO) plans, Preferred Provider Organization (PRO), Private Fee-for-Service (PFFS), and others. For Medigap, there are several different Federally-standardized supplement policies, which are denoted by a letter. The availability of these plans depends on your state.
Deciding on which option you should go with, Advantage Plan or Medigap policy, is going to depend on your situation and personal preferences. There is no “best option” for everyone.
One of the biggest differences between the two types of plans is the freedom of choosing doctors and hospitals. With Medicare Advantage, you are limited to the policy’s network. If you want the policy to cover the expenses of your medical bills, you have to go to one of the plan’s approved physicians or centers. If you choose any other, you’ll be forced to pay the bills out-of-pocket.
With a Medigap policy, you will not have any of these restrictions. With the supplemental insurance, you can go outside of the networks to any doctor that accepts Medicare. This is one of the biggest reasons that a lot of Medicare enrollees are starting to go with Medigap policies instead of the Advantage plans. The freedom to choose whichever doctor suits your needs best is extremely important for many recent retirees. Having to switch doctors because of your Advantage Plan can be extremely frustrating. Additionally, Advantage plan networks can change mid-year; however, you cannot change plans mid-year with this type of coverage, meaning you can get ‘stuck’ with an out-of-network doctor unexpectedly.
The other main factor is the cost of the two different types. In most cases, there is little to no out-of-pocket expenses for the Medigap plan, but the Advantage plan will have deductibles and copays up to $6,7000 a year (it can be much less, depending on the plan). However, the monthly premiums for the Medigap plans are higher than the monthly premiums for the Advantage plans in most cases.
Lastly, one of the big differences in the plans is future portability. By this, we mean your options to change plans later. You can always go from Medigap to Medicare Advantage without any sort of health questions or underwriting. However, if you elect Medicare Advantage initially and later decide you want a Medigap plan, you would be subject to underwriting, pre-existing condition limitations, etc.
Medigap vs. Advantage – Factors to Consider
These are a few of the differences between the plans, but there are a few factors that you should consider to help you make the best decisions for your health care needs. Things like health, finances, and doctor choice.
How is your health? Your current health condition is going to play a huge role in which one you decide on. If you are going to be visiting the doctor frequently, going with Medigap plan F with no deductible and no additional out of pocket costs will probably save you money in the long run. If you are in good health, saving money on the monthly premiums is likely to be the better idea.
Also, how do you like your current doctor and are they a part of the Advantage plan? If you like your doctor, but they aren’t a part of the plan, then you may want to consider taking a Medigap policy so you can stay with your current physician.
For the last several years, Medicare Advantage plans have been a big seller for recent Medicare enrollees. They provide a “cap” on out of pocket expenses and a co-pay structure that is familiar to many retirees who have had group insurance during their working life. However, the recent trend shows Medigap policies rising to the top of the Medicare market. The numbers show that more and more retirees are starting to choose original Medicare coupled with a Medigap plan for the flexibility and security that these plans offer.
MedicareWallet.com is an unbiased, online resource for individuals turning 65 or already on Medicare. Our utmost goal is to provide information in a way that is user-focused, informative and ethical. With a combined 40 years of experience in the Medicare market, we can answer any questions about Medicare and Medigap insurance. Feel free to reach out to us at 800.376.0824 or by email at [email protected].