Medicare beneficiaries often find themselves burdened with medical expenses that aren’t covered. With Original Medicare only covering about 80% of Part B costs, the remaining 20% remains out-of-pocket expenses in the form of deductibles, copays or coinsurance. To reduce these coverage gaps seniors have a few choices. Most opt to enroll in an Advantage Plan or a Medigap policy to supplement or replace Original Medicare.

Medicare Advantage Plans are steadily growing in popularity with seniors, with nearly 40% of Medicare beneficiaries choosing one of these plans over original Medicare. Alternatively, only 21% choose a Medigap policy. So which is right for you? 

Like most healthcare decisions, the right choice for you depends on a variety of personal factors that you’ll have to weigh carefully. 

What is a Medicare Advantage Plan?

Also called Part C coverage, Advantage Plans are offered by private insurers who partner with Medicare and cover the same services as Original Medicare. These often include prescription drug benefits that Parts A and B leave out. If you choose an Advantage Plan, this will be your primary insurance. But you’ll still have to pay a Part B premium on Original Medicare. Even so, many of these plans are cheaper than Original Medicare. And many even offer zero-premium options. 

Pros and cons of Advantage Plans

As with all plans, Advantage Plans have both pros and cons. Here are some of the reasons you might want to choose (or not choose!) an Advantage Plan.

Pros of Advantage Plans:

• Usually cheaper than choosing Original Medicare plus a Medigap policy.
• Typically more comprehensive than Medigap with 89% of plans including prescription drug benefits.
• Often includes benefits like vision and dental, but you’ll likely pay extra for these.
• Most seniors will have more Advantage Plan options than Medigap. The average senior can choose from 33 Advantage plans in 2021.

Cons of Advantage Plans:

• Your provider selection is limited and Advantage Plans charge for using out-of-network providers. 
• Most HMO models require prior authorization to see specialists.
• Many Advantage Plans provide inconsistent coverage if you move from state to state.

If you have questions after reviewing the pros and cons of Advantage Plans, get in touch with us here. We’re happy to help!

What is a Medigap policy?

Medigap is secondary insurance offered to seniors by private companies to help with copays, coinsurance or deductibles that Original Medicare doesn’t cover. Currently, 81% of Original Medicare beneficiaries supplement their coverage with Medigap, Medicaid or an employer-sponsored plan. Though private companies sell Medigap, they’re limited to offering standardized plans (called A, B, C, D, F, G, K, L, M and N) that each have different levels of coverage. This makes comparing pricing easy for seniors. 

A few of the pros and cons of Medigap policies are:

Pros of Medigap policies:

• Medicare and Medigap plans offer nationwide coverage and the majority of doctors accept these plans.
• With Medicare and Medigap you never need prior authorization to see a specialist.
• Comparing plans and pricing is easy. 

Cons of Medigap policies:

• You can’t use Medigap to pay your Part B deductible (Note: if you became eligible before January 1, 2020, you could still qualify for a plan that would pay the deductible).
• Medigap policies are usually more expensive than Advantage Plans.
• You won’t necessarily cover all of your additional expenses even with Medigap.

If you have questions after reviewing the pros and cons of Advantage Plans, get in touch with us here. We’re happy to help!

Factors to consider when choosing Medicare Advantage vs. Medigap:

You’ll have many factors to consider when deciding on health insurance. And consulting with a qualified Medicare broker in your area can help clarify your options. But before you decide, make sure to consider these factors:

• Total costs: Even a premium-free Advantage Plan doesn’t mean your total costs will be lower. Look at and compare co-pays, deductibles, out-of-pocket maxes and prescription drug benefits to get an idea of your overall spending.
• Existing conditions: If you know you need certain services or procedures based on existing diagnoses, confirm the supplemental plan covers this.
• Preferred doctors: If you choose an Advantage Plan with an HMO, make sure your preferred doctors are in-network. Alternatively, a PPO may give you more choices for in-network coverage.
• Location: You’ll have more Advantage Plan options if you live in a populated, urban area, but not all plans will provide the same coverage all across the country. If you are going to move or enjoy traveling frequently, take this into consideration.

You’ll find more information on Advantage Plans here and on Medigap policies here. If you need help determining the best-fit plan for you, we can help walk you through all your Medicare insurance options to find a plan that meets your needs and your budget!

 

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