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 |
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
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?
There are two types of Medicare Advantage plans:
- 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.
