Which Medicare Insurance is Best?
Medigap Vs. Medicare Advantage
Almost every day someone will ask me some version of this question: “What is the difference between Medicare Advantage vs Medigap and how do I choose?” I’ve answered versions of this question thousands of times in my career.
As you may know by now, Medicare alone doesn’t cover everything. Most people buy additional insurance to bridge the gaps. After all, who wants to come up with a $1400+ deductible each time you enter the hospital? Or shell out 20% of the cost of an expensive test like a MRI?
When considering Medicare Advantage vs Medigap plans, it’s important to understand that both types of plans will help to reduce your out of pocket spending, understanding the differences will help you select the right plan for your needs.
Medigap, commonly referred to as Medicare Supplement
Medicare supplements will pay secondary to original Medicare, that means there is no provider network and patients with this coverage can go to any provider that accepts original Medicare. If you enroll in a comprehensive plan like Plan G, you will have very little out of pocket. Not even doctor copays!
When you enroll, you’re Medicare supplement insurance company notifies Medicare that you have purchased a policy. Thereafter, as we described earlier, when Medicare pays its portion of your bills, it will automatically send the remainder of your bill to your Medicare supplement company.
Freedom of Access & No Referrals NecessaryMedicare supplements also offer you the most freedom of access to providers. You have freedom to choose your own doctors and hospitals from among the 900,000+ Medicare providers in the nation. No referrals are necessary to see a specialist on this type of coverage. Because these plans offer you the most freedom and flexibility, they have higher premiums than Medicare Advantage plans. In the New York area, for example, a female, non-tobacco user turning 65 might pay around $200 – $270/month for Plan G in 2020.
Rates in other states depend on which Medigap plan is chosen and whether that individual uses tobacco. Plans and rates also vary by region, age and sometimes gender.
Your Retail Drug Coverage is SeparateMedicare supplement plans cover medications administered in a hospital setting, such as injectables or chemotherapy drugs. They do not cover retail medications though, so most beneficiaries will enroll in a separate Part D drug card. There are plans available in every state starting around $10/month up to $100.
If you enroll into a Medicare supplement plan during your one-time open enrollment window (within 6 months of your Part B effective date), there are no health questions. The insurance company will approve your application.
There are also no waiting periods or pre-existing condition exclusions when you apply during this window. If you miss this window and apply later on, then you will usually be required to answer medical questions and be underwritten. The underwriter at the insurance company can accept or decline you based on your medical history.
Medicare Advantage About 36% of beneficiaries choose to enroll into Medicare Advantage policies, which are private insurance plans. They usually have lower premiums than Medigap plans….Many even a $0 premium on some plans in some areas.
When a plan has a $0 premium, it means that you will pay no additional premiums for the plan itself. You will still pay for your Part B premiums monthly though. You must be enrolled in both Medicare Parts A and B to be eligible for a Medicare Advantage plan.
Check Your DoctorsMedicare Advantage plans have networks which vary greatly in size, making it even more important to choose a plan with a good network that fits your needs.
Your Medicare Advantage insurance company will pay your healthcare bills instead of Medicare paying them. You will pay copays for the services you obtain from providers in the plan’s network as you go along. Generally the copays are reasonable, but you’ll want to review them before you enroll to make sure. Often Medicare advantage plans will offer benefits that are not covered by original Medicare like dental, vision, hearing, free gym memberships and more.
Bottom Line
There are many variables to consider when choosing a plan This is not a one size fits all, so take your time and do your homework here are a few things to consider,
- Monthly premiums
- Deductibles, if any
- Expected costs of healthcare services on each plan
- How often you use healthcare services
- Areas where you will need access to care
- Expected copays for your medications
- Potential out of pocket spending for you on each plan type
- Remember, you get what you pay for
Checking the provider networks and drug formularies for each plan can take many hours. You can simplify your search by having Paul Barrett Insurance licensed agents to do this for you. We’ve helped thousands of people like you with their options. We can search Medicare Advantage vs Medigap plans in your area.
We’ll be able to quickly tell you which plans your doctors take and whether your medications are covered. Working with an agent also gives you policy support when dealing with providers and year round customer service if needed.
Call 1-800-219-0453 for help today!