difference between medicare advantage and medigap

Medical insurance can be a confusing topic, especially with understanding the difference between Medicare Advantage and Medigap.

While both insurance forms offer protection against health care costs, their coverage and eligibility requirements are different.

Let’s look at how each program works and the factors to consider when choosing one.

What Is Medicare Advantage?

Medicare Advantage is a health insurance plan offered by private companies. Medicare approves them to cover all of your medical expenses. It includes everything Part A, B & D would cover except hospice care.

But did you know most people have this kind of coverage through their employer or spouse’s job? People who don’t qualify without employment decide to enroll in Medicare Advantage, depending on their income level.

These plans are available in four different types:

HMOs: It requires you to use providers within the network.

PPOs: They’re more traditional insurance plans that allow you to see the provider of your choice. Yet, they have different co-pays depending on whether they’re in or out of network.

POS: This is similar to a PPO where you can go outside of the network. However, it attracts higher co-pays and deductibles.

Private Fee for Service Plans: It allows you to see any provider without restrictions.

What Is Medigap?

Medigap does not need you to use specific providers. This type of coverage is standardized. You can’t choose between various levels or types as with Medicare Advantage.

There are 10 companies currently offering this type of coverage, with 10 different plans ranging from A-J. Every company offers specific options since they’re standardized.

However, each company offers different amounts of coverage for the premium you pay.

In order to qualify for a Medigap plan, you must be enrolled in both Medicare Parts A & B. However, if you sign up for a Medicare advantage plan first, you might have to switch to another kind of insurance.

Medicare Advantage Benefits

Medicare Advantage plan covers the difference between what your co-pay would be on Medicare when you’re hospitalized. It caters to whatever your deductible may be on Medicare or your Medicare Supplement plan.

There are also no deductibles with this type of insurance. This makes financial sense depending on how much you use on other types of health care.

While using this plan, companies don’t’ need a referral from your primary care physician to see a specialist. Yet, with Medigap, there’s no guarantee you won’t need one.

But since Medicare Advantage insurance comes through private companies, there are fewer hoops to jump through regarding approval. If you’re in good health, then this type of insurance makes the most sense financially.

Benefits of Medigap

It’s important to enroll with the coverage as soon as you become eligible. If you fail to at this stage, your rates will go up by 10% every year until age 65. However, this doesn’t occur with Medicare supplement plans.

It covers all services, including dental and vision. Remember, many Medicare Advantage Plans don’t provide these services without an additional charge.

Medigap vs Medicare Advantage; Which Is Better?

This question can be answered depending on what factors are most important for you. If neither has a deductible and you don’t need any referrals, then Medicare Advantage is the way to go.

If you’re looking for comprehensive coverage without extra charges or restrictions, then Medigap is your best bet.

What to Consider in Making Your Choice

If you’re considering your Medicare options, you may have heard about the various plans. This can be overwhelming when trying to choose between Medigap and Medicare Advantage (MA) plans. Below are some things to keep in mind when making your decision.

Health Status

MA/AARP vs Medigap coverage for pre-existing conditions may vary by the insurance company. If you have an underlying medical condition, it’s essential to check with each carrier before choosing an insurance plan.

Comfort Level With Managed Care

Are you comfortable visiting the selected health facilities and recommended doctors? If so, then an MA plan may be right for you.

If having complete control over where you go is important, then Medigap coverage is ideal for you.

Doctor’s Location

This plan is ideal where your doctor doesn’t accept Medicare Advantage plans. More so, if they find the plan’s reimbursement rates are lower than what you typically pay out of pocket.

Medigap gives you flexibility in choosing your doctors than staying with a single network of doctors under an MA plan.

Prescription Drug Coverage

Medications are critical to maintaining good health status. Yet, costs can be restrictive on your wallet due to co-pays, deductibles, or formulary restrictions.

Therefore, a plan that covers medications without cost-sharing from you is an essential thing to consider. This is something to take into account with MA plans.

If you’re confident in managing your prescription drugs and can afford them on your own, go for Medigap coverage.

Premium and Deductible Amount

Premiums can vary significantly between both types of plans. Thus, it’ll depend on what best fits the budget and level of health care coverage needed.

Switching from Medicare Advantage to Medigap Insurance plan?
The first step is to choose a new policy. Also, learn how much you’ll pay after any available subsidies and discounts.

Contact your current Medicare Advantage plan and inform them of the desire to switch plans. In most cases, you can cancel your current plan with no penalties.

If the new policy doesn’t start for three months or more from when you cancel your Medicare Advantage plan, you may have to pay a late cancellation fee.

Before switching to Medicare Supplement Insurance, you must observe some steps. For instance, there may be one or more life changes that cause your Medigap plan premiums to change.

These can include an increase in income and modifications to dependents on the insurance policy. If any of these events happen during the year, you may have to pay higher premiums.

Making the transition from a Medicare Advantage plan to Medigap is relatively straightforward. However, you must follow these tips and make necessary changes accordingly.

Now that You Know the Difference Between Medicare Advantage and Medigap, What Next?

Do you live in South Florida and don’t know where to get the best health cover or which suits you?

Here at South Florida Medicare Specialists, we’ll walk you through the difference between Medicare Advantage and Medigap.

For a free consultation or more info about our services, call us today.