- What’s the difference between a Medicare supplement (Medigap plan) and a Medicare Advantage plan? I’ve heard both described as insurance that is “supplemental” to Medicare.
- There are very big differences between these two types of insurance, although both are options for people with Medicare. Technically, only Medigap counts as “Medicare supplemental insurance” — in fact, that’s its formal name — but Medicare Advantage plans may provide some extra benefits that could be considered as supplementing Medicare.
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Medigap can be used only by people enrolled in traditional Medicare. It is not a government-run program, but private insurance you can purchase to cover some or most of your out-of-pocket expenses in traditional Medicare. These may include Part B costs, like the 20 percent you’d otherwise pay for physician visits and other outpatient services, the Part A hospital deductible (currently $1,184 for each benefit period), most of the cost of medical emergencies abroad and certain other outlays, depending on which kind of policy you choose. Each of the 10 types of Medigap policies is standardized by law — meaning the benefits of each are the same, regardless of which insurer sells it. But insurers still charge widely different premiums, so it pays to shop around.
Medicare Advantage comprises a variety of private health plans — most often HMOs and PPOs — that Medicare offers as a coverage alternative to the traditional program. Every plan must cover all the same benefits that traditional Medicare covers. But the plans can charge different copayments (often lower than the traditional program but not always) and offer extra benefits. Most charge a monthly premium in addition to the Part B premium, but some don’t. Most include prescription drug coverage at no additional cost. Some cover routine hearing and vision services, usually as a separate package for an additional premium. Another difference from the traditional program is that most plans require you to go to doctors and other providers within their service network or pay higher copays for going out of network.
Note: If you enroll in a Medicare Advantage health plan you cannot, by law, also purchase a Medicare supplement or Medigap policy, even though you still have out-of-pocket expenses under that health plan. If you stay in traditional Medicare, you would need to join a separate Part D plan to get prescription drug coverage and pay an extra premium for it. And Medicare supplement or Medigap does not cover out-of-pocket drug expenses.
Comparing and choosing plans
When deciding whether to buy a Medicare supplement or Medigap policy to cover expenses in traditional Medicare or enroll in a Medicare Advantage plan, it’s important to look at the details of each plan available to you in order to find the one that best suits your needs and pocketbook. Insurance Brokers Direct, has online programs to help you make these comparisons.
Medigap policies:
- If you have Medicare because of disability:Medicare supplement or Medigap policies are not always available to beneficiaries under 65. Contact one of our brokers at 1.800.423.5511 to find out which ones are available in your area.
- Medicare Advantage plans: Get a Quote
If you have Medicare because of disability: Medicare Advantage plans are all available to beneficiaries under age 65, with one exception. You cannot enroll in any of these plans if you already have end-stage renal disease, defined as needing regular dialysis or a kidney transplant.
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