Are Medicare Supplement Plans and Medicare Advantage Plans the Same Thing?

Medicare Supplement Plans and Medicare Advantage Plans are both health insurance options available to Medicare beneficiaries, but they work very differently. Understanding the key differences between these two types of plans can help you decide which type of plan may better fit your needs.

What is Original Medicare (Part A and Part B)?

Before diving into Medicare Supplements and Medicare Advantage, it's helpful to understand Original Medicare Plan, which is made up of Medicare Part A and B.

Medicare Part A covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health care services. Most people do not have to pay a premium for Part A since they or their spouse paid Medicare taxes while working.

Medicare Part B covers doctor visits, preventive care, durable medical equipment, and medical supplies. Most people pay a monthly premium for Part B. For 2023, the Medicare Part B standard premium is $170.10 per month (though it can be higher based on your income).

Original Medicare Plans offer an average payment of about 80% of your medical costs. You are responsible for deductibles, coinsurance, and copays for covered services. And importantly, some key services are not covered by Original Medicare, like prescription drugs and routine dental or vision care.

That's where Medicare Supplement and Medicare Advantage Plans come in - to help cover costs left over after Original Medicare pays its share.

What are Medicare Supplement Plans?

Medicare Supplement Insurance plans, also called Medigap Plans, are sold by private insurance companies. They help fill "gaps" in Original Medicare coverage by covering some out-of-pocket costs like deductibles, coinsurance, and copays.

Some key things to know about Medicare Supplement Plans:

·        They automatically work alongside your Original Medicare benefits.

·        You must be enrolled in both Medicare Part A and Part B to purchase a Medigap Plan.

·        Medigap Plans are standardized - each plan with the same letter must offer the same basic benefits, making it easier to compare plans.

·        Premiums may vary between insurance companies for the same plan.

·        You can use your Medigap policy at any healthcare provider or facility that accepts Medicare nationwide.

·        Medigap Plans do not cover prescription drugs; you may want to enroll in a Part D prescription drug plan separately.

There are 10 different Medigap Plans to choose from - Plans A, B, C, D, F, G, K, L, M, and N. Each plan covers different combinations of benefits like copays, coinsurance, deductibles, and foreign travel emergencies. Plan F and Plan C offer the most comprehensive coverage.

What are Medicare Advantage Plans?

Medicare Advantage (MA) plans, sometimes called Medicare Part C, are offered by private insurance companies approved by Medicare. These plans provide an alternate way to get your Original Medicare (Part A and Part B) coverage.

Here are some key Medicare Advantage features:

·        To join a Medicare Advantage Plan, you must be enrolled in Original Medicare.

·        Plans cover everything Original Medicare covers. Many include extra benefits like vision, hearing, dental, and wellness programs.

·        Most plans charge a monthly premium in addition to your Part B premium, but some have a $0 premium.

·        Each plan has a provider network - you generally must use in-network doctors, hospitals, and pharmacies except in emergencies.

·        Many plans include prescription drug coverage (Part D Plan).

·        Your coverage area is limited to where the plan is offered - you generally can't get coverage nationwide like with Original Medicare.

·        You may pay copays or coinsurance for covered services instead of the 20% coinsurance under Original Medicare.

·        Most plans have an annual out-of-pocket maximum, which limits your costs for covered medical care.

There are several main types of Medicare Advantage Plans:

·        HMOs (Health Maintenance Organizations)

·        PPOs (Preferred Provider Organizations)

·        PFFS (Private Fee-for-Service)

·        Special Needs Plans (for certain chronic conditions or dual eligibles)

Each Medicare Advantage Plan can have different costs, coverage rules, and restrictions, so it's important to carefully evaluate plans available in your area.

Difference Between Medicare Advantage and  Medicare Supplement Insurance

Medicare Supplement and Medicare Advantage Plans share some similarities but have important differences. Here are some key ways they compare:

Features of Medicare Supplement Plans include: 

·        Works alongside your Original Medicare benefits

·        Strictly regulated with standardized plans

·        Freedom to see any Medicare provider nationwide

·        Covers coinsurance, copays, deductibles

·        Does NOT cover prescription drugs

·        Premiums vary by company and location

·        Allows you to have a separate Part D drug plan

Features of Medicare Advantage Plans Include:

·        Provides your Medicare Part A and Part B benefits

·        Often covers extra benefits not offered by Original Medicare

·        Uses provider networks - generally won't cover out-of-network care except emergencies

·        Often includes prescription drug coverage

·        Premiums, copays, and coinsurance vary by plan

·        Out-of-pocket maximum limits annual costs

·        Cannot also have a separate Medicare drug plan

Comparing Medicare Advantage and Medicare Supplement Plans; Which One Should You Choose?

There are pros and cons to both options. Here are a few factors to consider when you are eligible for Medicare Supplement and Medicare Advantage:

Your budget - What you pay in premiums, deductibles, and other out-of-pocket costs can vary greatly. Do the math to see which plan costs may fit your finances best.

Coverage when traveling - Medigap Plans provide nationwide coverage. Most Medicare Advantage Plans only cover you in a limited area or have rules on out-of-network coverage.

Provider choice - Do you want unrestricted access to Medicare providers or are you comfortable using a plan's network? Supplements offer open access while networks are narrower with Advantage Plans.

Prescription drug needs - Will you need standalone Part D drug coverage or do you want an all-in-one plan with medical and drug coverage combined?

Extra benefits - Advantage Plans often include dental, vision, hearing and other benefits not covered by Medigap Plans or Original Medicare.

Health status - If you require frequent medical care or have chronic conditions, understand how each plan's costs and coverage may impact your overall expenses.

Speaking with an insurance broker or agent in your state can provide guidance about plans available in your location and whether Medicare Supplement or Medicare Advantage coverage may work better for your specific health and financial situation.

It's also important to review plan details annually since coverage and costs can change from year to year. Use Medicare's Plan Finder tool or speak to a plans expert to evaluate your options during Open Enrollment each fall.

Can You Have Both a Medicare Supplement Insurance Plan and Medicare Advantage?

Unfortunately, you cannot be enrolled in both a Medicare Supplement Plan and a Medicare Advantage Plan at the same time.

You have the option to switch between Medicare Supplement and Medicare Advantage coverage during certain enrollment periods, but you can only have one type of plan active at any given time.

Here are a few key points about having dual enrollment:

·        If you try to purchase a Medigap policy when you already have a Medicare Advantage Plan, your Medigap application can be denied or delayed until your Advantage Plan coverage ends.

·        You cannot use a Medigap Plan to pay for out-of-pocket costs while enrolled in an Advantage Plan. The plans cannot coordinate benefits.

·        If you opt to leave a Medicare Advantage Plan and switch back to Original Medicare, you may purchase a Medigap policy at that time. There are limitations on when Medigap coverage is guaranteed issue so it's important to understand the enrollment rules.

·        It is illegal for anyone selling Medicare insurance to knowingly sell you both types of plans or lead you to believe you can use both Medicare Supplement and Medicare Advantage coverage at the same time.

Under limited circumstances, you may enroll in a Medicare Supplement Plan and a separate standalone Part D prescription drug plan at the same time. But in general, the two main options are either Original Medicare plus a Medigap or a Medicare Advantage Plan.

Carefully weigh the overall costs, coverage, and convenience of each when making a decision. An experienced insurance agent in your state can explain how the different plans work and provide advice on choosing coverage based on your health needs.

We’re Here to Help

You do not have to spend hours reading articles on the internet to get answers to your Medicare questions. Give the licensed insurance agents at Bourgeois Insurance a Call at (985) 803-8999. You will get the answers you seek in a matter of minutes, with no pressure and no sales pitch. We are truly here to help.

FAQ

What is the difference between Medicare Advantage and Medigap?

Medicare Advantage is an alternative to the Original Medicare run by private insurers. Medigap is supplemental insurance that helps cover costs Original Medicare doesn't pay.

Can I switch between Medicare Advantage and Original Medicare?

You may switch plans during Open Enrollment periods. A Switch allows you to move between the Original Medicare program and Medicare Advantage Plans offered by private insurers.

Should I enroll in a Medicare Advantage or Medicare Supplement Plan?

Whether to enroll in a Medicare Advantage or Medicare Supplement Plan depends on considering costs, flexibility in doctors, and whether your providers are in-network versus potential lower premiums or extra benefits from an Advantage Plan.

What is the best Medicare Plan for me?

Consider your health needs, budget, and which doctors you want to see. Compare costs and coverage of Medicare Advantage Plans to Original Medicare plus Medigap when deciding.

What does Medicare cover?

Original Medicare covers many medical expenses like hospital and doctor visits but doesn't cover all costs. Medigap Plans help cover what Medicare doesn't.

Can I enroll in a Medicare Advantage Plan?

If you have Medicare parts A and B, you may be eligible to enroll in a Medicare Advantage Plan offered by private insurers which cover more services.

How do Medicare Supplement Plans work?

Medigap Plans supplement Original Medicare by helping cover costs for medical services that Original Medicare doesn't cover like copays, coinsurance, and deductibles.

Can I switch between Medicare Plans?

You can switch between Original Medicare and Medicare Advantage during open enrollment periods each year or join a different Advantage Plan.