Medicare Advantage vs. Medicare Supplement Insurance Plans

The federal government’s Original Medicare program helps with the cost of health care for most Americans over the age of 65. Inpatient stays in a hospital, physician services, ambulance transportation, medical tests, and preventive screenings are typically covered by Original Medicare Part A (hospital insurance) and Part B (medical insurance).

There are additional out-of-pocket health carecosts not covered by Original Medicare, including:

• Part B premiums
• Deductibles
• Copayment or coinsurance
• Prescription drugs
• Vision exams and eyeglasses
• Dental care
• Hearing aids
• Emergency care outside of the country

Medicare beneficiaries have two options to help make up for some of these gaps in coverage: They can enroll in a Medicare Advantage Plan (Part C) or a Medicare Supplement Plan (Medigap).

Medicare Advantage vs Medigap:

• Medicare Advantage is offered through private insurance companies to give consumers a choice in how they receive Original Medicare. These plans cover everything included in Original Medicare Parts A and B, and some may cover additional benefits, such as dental and vision care.
• Medicare Supplement Insurance, also called Medigap, is an add-on to Original Medicare. It covers Part A and B deductibles, copayments, and coinsurance.

Because you can’t be enrolled in a Medicare Advantage Plan and Medigap at the same time, it’s important to understand the differences between these two options when choosing your Medicare coverage.

When you choose a Medicare Advantage Plan, you’re enrolling in a plan delivered by a private insurance company to receive your Medicare benefits as an alternative to the federal government’s Original Medicare program. The Medicare Advantage insurance companies are contracted by Medicare to deliver these plans that must meet guidelines established by the government. You must be enrolled in Medicare Parts A and B to join a Medicare Advantage Plan.

All Medicare Advantage plans must provide the same coverage as Original Medicare Parts A and B.

Medicare Advantage plans may also provide additional coverage, such as:

• Prescription drugs
• Dental cleanings
• Vision and hearing tests
• Eyeglasses
• Hearing aids
• Transportation to medical appointments
• Acupuncture
• Chiropractic care
• Fitness benefits like gym memberships

Benefits, deductibles, coinsurance, and cost-sharing vary, depending on the plan.

If you decide to keep Original Medicare instead of opting for a Medicare Advantage Plan, you can buy a Medigap policy. Medigap plans are sold by private insurance companies and help pay for out-of-pocket costs related to Original Medicare Part A and Part B deductibles, copayments, and coinsurance. Some Medicare supplement plans may also provide emergency medical care coverage when you travel outside of the country.

Here’s a quick comparison of the differences between Medicare Advantage and Medigap. Because plans vary in costs and benefits, be sure to review the details of any plan before you choose the right plan for you.

Once you’ve decided whether Medicare Advantage or Medigap is right for you, you must select the specific plan you wish to purchase.

There are various types of Medicare Advantage Plans, including:

• Health maintenance organization (HMO) plans
• Preferred provider organization (PPO) plans
• Private Fee-for-Service (PFFS) plans
• Special Needs Plans (SNPs)

You can compare Medicare Advantage Plans using Medicare’s online tool.

There are 10 categories of Medigap plans (A, B, C, D, F, G, K, L, M, and N). Each plan within a letter category offers the same basic benefits, regardless of the insurance company selling the policy. You can choose the letter plan that works best for you and compare Medicare Supplement plans according to price and additional benefits.

For example, Medigap A plans cover Part A coinsurance and hospital costs, Part B coinsurance, Part A hospice care coinsurance, and the first three pints of blood. Plans within Medigap Plan B cover the above plus the Part A deductible.

This applies in all states except Massachusetts, Minnesota, and Wisconsin, which standardize their Medigap plans differently.

Most Americans qualify for Medicare at age 65. Individuals younger than age 65 who have received certain disability benefits for at least two years or have end-stage renal disease (ESRD) or amyotrophic lateral sclerosis (ALS or Lou Gehrig’s disease), may also be eligible. You can confirm your eligibility using the Medicare online eligibility tool.

Medicare enrollment is handled by Social Security:

• If you receive Social Security benefits for at least four months before you turn 65, you’re enrolled automatically in Part A and Part B. Your Medicare card should be mailed to you three months before your birthday.
• If you aren’t receiving Social Security benefits for at least four months before you turn 65, you can call Social Security at (800) 772-1213, visit a Social Security office, or enroll online during a designated enrollment period.
• If you’ve received disability benefits from Social Security or the Railroad Retirement Board for at least two years, you’re automatically enrolled in Part A and B and should receive your Medicare card in the mail.