Medicare Advantage vs. Medicare Supplement
Medicare Supplement plans cover all or most of the Part A and B out-of-pocket costs that Original Medicare does not cover. Supplement plans:
- Are offered by private insurance carriers.
- Do not cover most prescription drug costs. You must enroll in a separate Part D. prescription drug plan to avoid penalties.
- Provide access to any doctor who accepts Medicare.
Medicare Advantage plans provide Part A and B benefits in place of Original Medicare. Medicare Advantage plans:
- Are offered by private insurance carriers and are sometimes called "Part C".
- Include Part D prescription drug coverage in most cases.
- Have a network of doctors and hospitals that you use to receive care. It’s important to make sure your doctor participates in the plan’s network before joining a plan.
Both Medigap and Medicare Advantage help cover additional costs that are not covered by Original Medicare, but there are key differences to consider. If you are trying to decide between a Medicare Supplement (Medigap) plan and Medicare Advantage plan (Part C), you should consider these questions:
- Would you like to have added benefits such as routine vision, dental, and hearing at no extra cost?
- Would you rather buy a separate prescription drug plan or get drug coverage included in your plan?
- Would you rather pay more in monthly premiums and have lower out-of-pocket costs for services you receive or pay a low or $0 monthly premium and copays for services as you use them?
When deciding between a Medicare Advantage plan and a Supplement plan, there are many factors to consider. Think about the cost of your monthly premium, what services or benefits are covered, and your health needs to decide what will work best for you.
| Medicare Advantage plan | Supplement Plan |
|---|---|
| 1 card: Your Medicare Advantage plan card. You can keep your red, white, and blue Medicare card in a safe place. |
3 cards: Red, white, and blue Medicare card Supplement card Part D (prescription drug) card |
| Medicare Advantage plan | Supplement plan |
|---|---|
| Medicare Advantage plans usually have lower monthly premiums. Costs for doctor visits and other covered medical services can vary widely from plan to plan. Many plans offer an affordable alternative to Supplement plans. |
These plans typically have higher monthly premiums but lower costs for doctor visits and other covered medical services. |
| Medicare Advantage Plan | Supplement Plan |
|---|---|
| No additional benefits and coverage |
Choosing between Medicare Advantage and Medicare Supplement depends on what works best for your budget and health care needs. The right plan is different for everyone. Take time to think about your health needs, budget, and lifestyle. Here are some questions to ask yourself when choosing a plan:
- How often do I go to the doctor or need care?
- Do I want lower monthly costs, or lower or no copays when I need care?
- Do I travel a lot and need coverage when away from home?
- Do I need coverage for things like dental, vision, or hearing? Do I want prescription coverage in the same plan, or do I want to purchase it separately?
When choosing a Medicare plan, it’s important to understand how costs can add up. Different plans have different rules for what you pay each month and when you receive care. Here are what some of the most common costs mean:
- Premium — This is what you pay every month to have the plan.
- Copay — This is a set amount you pay when you visit a doctor or fill a prescription.
- Deductible — This is a set amount you pay for covered services first before your plan begins to pay.
- Out-of-pocket costs — What you spend on your own during the year up to a set limit.
Here are some costs you can expect:
- Medicare Advantage:
- Lower monthly premiums (some plans are $0)
- Copays for doctor visits, hospital stays, or
- Yearly limit on how much you spend out- of- pocket
- Often have built in Part D prescription drug coverage
- Medicare Supplement:
- Higher monthly premiums (range from $100-$300 per month)
- Helps pay out-of-pocket costs like copay, coinsurance, and deductibles
- Does not have a cap on yearly out-of-pocket costs
- Does not have Part D coverage, so you will need to buy a separate Part D plan
- Health maintenance organization (HMO)
HMO plans have a set network of participating doctors that you must use for your care. If you see a provider that is not in-network, you will pay the full cost for your care. The only exceptions to this are for urgent care, emergency care, and kidney dialysis. - Preferred provider organization (PPO)
PPO plans give you coverage to see doctors in- and out-of-network. You may pay more when using out-of-network providers. - Private fee-for-service (PFFS)
PFFS plans allow you to see any provider that accepts Medicare and may or may not include a network of providers. Prescription drug coverage can be included, but not always. - Special Needs Plans (SNP)
Special Needs Plans are designed for people with specific diseases or chronic illnesses, nursing care facility needs, or dual eligibility for Medicare and Medicaid. Drug coverage must be included and often have a network of providers that specialize in the member’s specific condition. - Medical Savings Account (MSA)
MSA plans combine a high-deductible plan with a medical savings account that Medicare deposits money into. You are able to use the money in the account to pay for health care costs before your deductible is met. Prescription drug coverage is not included, so you would need a separate Part D plan.
Yes. You can switch Medicare plans during specific enrollment periods unless you qualify for a Special Enrollment Period (SEP).
- Annual Enrollment Period (Oct. 15 – Dec. 7): You can join, change, or leave a Medicare Advantage plan, or change to Original Medicare.
- Medicare Advantage Open Enrollment Period (Jan. 1 – March 31): If you’re already on a Medicare Advantage plan, you can make one change to your coverage. You can add or drop Part D prescription drug coverage, change to a different Medicare Advantage plan, or change to Original Medicare.
Medicare Supplement plans work nationwide with any provider that accepts Medicare. This means you can see any doctor or hospital anywhere in the U.S. that participates in Medicare.
Medicare Advantage plans generally cover care within a specific service area and often have a network of doctors and hospitals. Some plans offer nationwide access, or access to care in specific states, but coverage rules and costs may vary if you go outside your plan’s service area.
Medicare Supplement plans typically have more predictable costs because they pay many of the out-of-pocket costs left after Original Medicare, such as deductibles and coinsurance. You typically pay consistent monthly premiums, which can make budgeting easier for services covered under Medicare Parts A and Part B.
However, Medicare Supplement plans do not include Part D prescription drug coverage and do not cover routine dental, vision, or hearing services. To get this coverage, you will need to purchase separate plans or pay out-of-pocket, adding to your overall health care costs.
Medicare Advantage plans often have lower monthly premiums and often include prescription drug coverage along with additional benefits like dental, vision, and hearing services. While costs can vary depending on how often you use care and whether you stay in the plan’s network, these combined benefits and an annual maximum out-of-pocket can help some members better manage their total health care spending.
