People new to Medicare might be surprised to know that Medicare does not cover every medical expense that you incur. In order to cover those things that Medicare doesn’t, you will need to buy a Medicare Supplement Plan (sometimes called Medigap) or a Medicare Advantage Plan.
Read on to find out what the difference is between the two, how much they might cost you and how each type of plan works.
Medicare Supplement Plans
A Medicare Supplement Plan is insurance that covers things not taken care of by Medicare, hence the common name, Medigap. In this case, you are covered by Original Medicare as a primary provider and then your supplemental coverage will pay their part, depending on which plan you have opted for. Some plans cover a vast array of items and leave you with very little, to nothing, to pay out-of-pocket.
Choosing Your Doctor with a Medicare Supplement Plan
Many people opt for a Medicare Supplement Plan because they will have more freedom to choose their care providers. If you have a Medicare Supplement Plan, then you can go to any doctor you want, nationwide, as long as they accept Medicare. This covers almost a million different providers.
Prescription Drug Coverage & Medicare Supplement Plans
Your Medicare Supplement Plan only covers drugs that are used while you are hospitalized or in a doctor’s office. This means that if you have a Medicare Supplement Plan you will need to purchase
Can You Change Your Medicare Supplement Plan?
You are always free to leave one plan and enroll in another, however, only during the open enrollment period will you be able to enroll in a Medicare Supplement Plan and have guaranteed acceptance.
Medicare Advantage Plans
Medicare Advantage Plans are different from Medicare Supplement Plans because with Medicare Advantage you are no longer covered by Original Medicare. When you choose a Medicare Advantage Plan, your Medicare coverage is managed by the plan that you have chosen.
Choosing Your Doctor with a Medicare Advantage Plan
When you have a Medicare Advantage Plan, you will need to go to doctors and service providers within the plan’s network. Before you choose this option, make sure that there are plenty of local providers covered. If you want to see a particular doctor, you should check and make sure that this doctor is within the network.
Prescription Drug Coverage & Medicare Advantage Plans
Most of the Medicare Advantage Plans come with prescription drug coverage. However you should check to make sure that prescriptions are covered by the particular plan you opt for. If there are already specific medications that you take, you will want to check and make sure that those prescriptions are covered by the plans’
Can You Change Your Medicare Advantage?
You can change your Medicare Advantage plan. There is an annual enrollment period every year and you can choose a different plan at that time.
Does a Medicare Supplement Plan Cost More than Medicare Advantage?
The price of each plan with Medigap and Medicare Advantage varies, and what each one will cover is different. In general, Medigap costs are more predictable as you pay a set premium and low to no copays for your services. Medicare Advantage plans often have a low, or even no premium, and often have low copays as well. The big difference is the maximum out-of-pocket. As of 2021, the maximum amount of money you may spend out of pocket is allowed to be as high as $7,550. This is way more than many Medicare supplement plans can cost. Not all plans have a maximum out-of-pocket this high. Which plan will work best in your specific case will depend on your own financial circumstances and healthcare needs.
Can You Switch Between The Two?
You can always choose to change from a Medicare Supplement Plan to Medicare Advantage, as long as you do so during the Open Enrollment Period. If you have never tried Medicare Advantage and it does not work for you, the first time you try it, you may switch back to your Medicare Supplement Plan within one year.
If you have a Medicare Advantage Plan you may enroll in a Medicare Supplement Plan anytime you wish. However, if you do this you will be subject to underwriting and you could be denied coverage because of a current health condition.
Should You Choose a Medicare Supplement Plan or and a Medicare Advantage Plan?
Choosing between Medicare Supplement Plans and Medicare Advantage Plans is a major decision that will affect your long term healthcare and finances. You will need to do some research and make careful considerations. If you want to be sure of your decision, you should speak with a local Medicare insurance broker who can help explain all of your options.
Choosing a Medicare Plan