Medigap vs. Medicare Advantage is the choice most people have when turning 65 or going on Medicare. This is intended to be a summary of the plan differences. Different plans are “right” in different situations, but first and foremost, you should understand what each plan covers, how it works and if/how it limits your options in the future.
Medicare Supplement (also known as Medigap)
These plans pay AFTER Medicare.
Considerations:
- Have few out of pocket costs at the doctor/hospital
- Can go to any doctor/hospital that takes Medicare, nationwide. There are no networks so no matter where you are in the country you are covered the exact same way.
- If Medicare approves a claim, the Medigap plan does as well.
- There is no involvement in the claims process on the part of the insured. Everything is automatic through Medicare’s “crossover” system.
- Premiums are typically higher than Advantage plans.
- Does not cover prescription drugs
Medicare Advantage
These plans pay INSTEAD of Medicare. All coverage is through the private insurance company.
Considerations:
- Lower premiums than Medigap for most plans
- Many plans have coverage for prescription drugs
- May have coverage of some things that Medicare doesn’t cover (i.e. routine dental, hearing)
- Most plans are HMOs or PPOs and have networks
- Plans renew annually and can be discontinued from year to year
- If you take a Medicare Advantage at the beginning, you have to qualify medically to go to a Medicare Supplement at a later time (unless your Advantage plan is ending). This causes many people to unwillingly/unknowingly get “stuck” in the Advantage programs.
