Mapping the Medigap vs. Medicare Advantage Landscape: Key Differences
If you are considering Medicare coverage for the first time, it can be difficult to know what your options are. There is a lot of information on Medigap and Medicare Advantage plans, but which one should you choose?
The answer depends on your specific needs and preferences.
This blog post will walk through some key differences between Medigap (also called Medicare supplement plans) and Medicare Advantage plans so that you can make an informed decision about which plan is best for you.
What is the Federal Medicare Program?
First, let’s define what the Federal Medicare Program is.
The Federal Medicare Program is a part of the United States government. It provides health insurance coverage to people who are 65 or older, as well as some younger Americans with certain disabilities and those with End Stage Renal Disease.
Original Medicare includes Part A and Part B.
What does Medicare Part A cover?
Part A is a hospitalization benefit. It covers inpatient stays, skilled nursing care given at home or in the facility, hospice care, some home health visits for rehabilitation therapy services during an acute illness episode lasting up to 20 days following discharge from the hospital.
What does Medicare Part B cover?
Medicare Part B is a medical coverage program. It covers doctor’s services, outpatient hospital care, and some other medical services such as lab tests.
Because Medicare Parts A and B only cover bout 80% of medical expenses, the Federal Medicare Program also offers a variety of supplemental insurance plans to help cover some of the costs that are not covered by Original Medicare.
What is a Medigap Plan?
Medigap, a Medicare Supplement insurance plan, covers some of the services not covered by Original Medicare. They are offered at private companies and have different coverage and pricing options for each type.
An important thing to understand about Medigap plans is that they are standardized by the federal government. That means that no matter which company you purchased a specific plan from, the plan is exactly the same.
Plan G is Plan G is Plan G, no matter which company you purchase it from.
The only difference you will find between companies is the cost of the monthly premium. It may be cheaper to purchase Plan G from company X instead of company Z.
After you have chosen the Medigap policy you want, you can compare premiums across companies. Another important factor to consider is the history of rate increases with each company.
An individual Medicare insurance agent can see these historical rate increases, which is just one reason why it is beneficial to work with an independent brokerage like Sunflower Insurance Solutions.
Another important thing to note about Medicare supplement plans is that they do not include dental, vision and hearing coverage, or prescription drug coverage. Members who enroll in Medigap policies will need to purchase separate DVH plans and prescription coverage.
What is a Medicare Advantage Plan?
A Medicare Advantage Plan, also referred to as Medicare Part C, is offered by private insurers to cover benefits that are not typically covered by Original Medicare.
Unlike Medigap plans, Medicare Advantage Plans are not standardized by the government. Each insurance company creates their own plans, unlikely to be exactly the same as another insurance company.
The benefits, costs and coverage will vary depending on which company you purchase your plan from.
Since these plans are not standardized, it is important to compare different Medicare Advantage Plans before making a decision about what to buy. You can do this by looking at the benefits of each plan and the out-of-pocket expenses.
Lastly, it is important to note that unlike Medigap plans, these plans have some coverage for dental, vision and hearing, as well as prescription drug coverage. This means that someone who chooses to enroll in a Medicare Advantage plan will not have to also enroll in those additional policies.
Medicare Advantage vs Medigap: The Key Differences
Now that you understand what both Medigap and Medicare Advantage plans are, let’s review some of the key differences between these two types of policies.
- Medigap Plans come with higher premiums but NO copays (depending on the plan). The opposite is true for Medicare Advantage Plans
- Medicare Advantage Plans are more restrictive with coverage. These restrictions will depend on the exact plan you choose, as well as where you live. Members who enroll in Medicare Advantage plans must see a doctor in their network, whereas those with Medigap Plans will have coverage outside of their network.
- Medigap Plans do not require a referral to see specialists. Some Medicare Advantage plans require members to first see their primary care physician before consulting with a specialist for services.
- Routine services like dental, vision, and hearing are not covered under Medigap plans.
Can I switch between Medigap and Medicare Advantage Plans each year?
Yes and no. When you are first eligible to enroll in Medicare coverage, no medical underwriting is required. This means that you cannot be rejected by any insurance company and you are eligible to enroll in whichever type of coverage you desire.
However, if you choose to enroll in a Medicare Advantage Plan but decide to switch to a Medigap plan later, you will be required to pass medical underwriting. If you do not pass, insurance companies have the right to deny coverage.
As with other types of policies in Medicare, it is important to consider future needs when enrolling in Medicare plans.
So, which plan is best for you? Medigap? Medicare Advantage? There is no correct answer and the correct answer for you can definitely be difficult to find out.
Give us a call at Sunflower Insurance Solutions. We’d be happy to discuss your needs and find the plan that fits your needs.
