Medicare Advantage vs Medicare Supplement Program Designs
Medicare Advantage and Medicare Supplement Plans have different program designs. When you buy a Medicare Supplement Plan, you are still enrolled in Original Medicare. Medicare pays the majority of your healthcare bills while private insurance simply covers the extra co-payments and deductibles.
When you enroll in a Medicare Advantage Plan, you move completely into a private health insurance plan. That means your insurance company covers all your healthcare bills. Insurance companies must provide the same level of coverage as Original Medicare with their Medicare Advantage plans, with the exception of hospice care. The end result of the two programs is about the same; they just go through a different setup.
Medicare Supplement Plans
As you shop for a Medigap policy, be sure you’re comparing the same Medigap policy (for example, compare Plan A from one company with Plan A from another company).
In some states, you may be able to buy another type of Medigap policy called Medicare SELECT (a Medigap policy that requires you to use specific hospitals and, in some cases, specific doctors to get full coverage). If you buy a Medicare SELECT policy, you also have rights to change your mind within 12 months and switch to a standard Medigap policy.
While the costs for each Medigap plan will differ among insurance companies, the coverage of each plan will remain the same.
We know that Original Medicare covers many healthcare services, but it doesn’t cover everything. That’s why we recommend a Medigap policy—a type of Medicare Supplement Insurance sold by private companies. A Medigap plan helps cover those out-of-pocket costs like copayments, coinsurance, and deductibles that Original Medicare leaves behind. Some policies even extend benefits to services that Medicare doesn’t cover, such as medical care when you travel outside the U.S.
With a Medigap policy, after Medicare pays its share of approved costs, the plan steps in to cover the rest. Keep in mind, however, that while Medigap helps fill those financial gaps, you’re responsible for its premium. All Medigap policies are standardized and regulated by federal and state laws, ensuring that you receive consistent and reliable benefits. This way, you can choose the plan that best fits your needs and helps safeguard your financial well-being.
More About Medigap Policies
You must have Part A and Part B.
You pay a monthly premium for your Medigap policy in addition to your monthly Part B premium.
A Medigap policy only covers one person. Spouses must buy separate policies.
The best time to buy a Medigap policy is during the 6-month period that begins on the first day of the month in which you’re 65 or older and enrolled in Part B. (Some states have additional open enrollment periods.) After this enrollment period, your option to buy a Medigap policy may be limited and it may cost more. For example, if you turn 65 and are enrolled in Part B in June, the best time for you to buy a Medigap policy is from June to November.
It’s important to compare Medigap policies since the costs can vary and may go up as you get older. Some states limit Medigap costs.
If you’re under 65, you won’t have this open enrollment period until you turn 65, but state law might give you a right to buy a policy before then.
If you have a Medigap policy and join a Medicare Advantage Plan (like an HMO or PPO), you may want to drop your Medigap policy. Your Medigap policy can’t be used to pay your Medicare Advantage Plan copayments, deductibles, and premiums. If you want to cancel your Medigap policy, contact your insurance company. If you drop your policy to join a Medicare Advantage Plan, in most cases you won’t be able to get it back.
If you have a Medicare Advantage Plan, it’s illegal for anyone to sell you a Medigap policy unless you’re switching back to Original Medicare. Contact your State Insurance Department if this happens to you.
Information provided by: