Medicare Advantage and Supplemental Plans – The Difference

Under Medicare, you have options for your health care coverage. Most states provide only two options: “Medicare Advantage Plans” and “Medicare Supplemental (Medigap) Plans.” These plans are not the same. Medicare Advantage plans are sometimes called “replacement” plans. The Medigap plans “supplement” your Original Medicare. You should study each plan and select the one that’s right for you. Below is a chart of the main features of each plan.

Medicare Supplemental (Medigap) Plans

Medicare Supplemental or Medigap plans are insurance policies that work with Medicare. You purchase these policies from private insurance companies. Original Medicare acts as your primary coverage, followed by a Medigap plan, and then you pay the rest.

For example, when you incur medical expenses, Medicare reviews the bill and pays its part of the coverage charged by the medical provider.

Next, the remaining bill is sent to your Medigap plan which pays another part of the medical expense (depending on which supplemental plan you select).

Finally, if there are any remaining fees you pay them.

All Medigap plan benefits were standardized by the federal government, which means no matter what insurance company you choose, the plan benefits will be the same. When selecting a private insurance company, compare the premium rates and check the ratings and reputation of the insurance company.

One-time Only Enrollment Period

One-time Only Enrollment Period

You have one opportunity to sign up for Medicare Supplemental Plans with no medical questions, guaranteed acceptance, and the choice between all ten plan options. This is your “personal enrollment window” and it only happens once.

The enrollment window begins the month you are 65 and enrolled in Medicare Part B and extends for six months. During the six month enrollment period, you will not have to answer any medical questions, you are guaranteed acceptance, AND you may enroll in any of the ten supplemental plans (as long as they are sold in your state).

If you don’t enroll during this time you might have to go through medical underwriting to be approved on a Medicare Supplement plan.

Guaranteed Issue Rights Enrollment Exceptions

Here are a few situations when you may enroll in Medigap Plans, other than your personal enrollment window at age 65. During these exceptions you may enroll for some of the Medigap Plans. These are called Guaranteed Issue Rights situations. These situations usually result from a change in your insurance coverage.

  • If you have Medicare Advantage and the provider leaves the Medicare Advantage program or stops offering care in your area, or if you move out of the area
  • Your employer plan (including retiree or COBRA coverage), or union coverage that pays after Medicare pays, is ending
  • You have Original Medicare and Medicare Select plan, and you move out of the Medicare Select plan coverage area
  • You joined a Medicare Advantage Plan or PACE* when eligible and you decide to switch to Original Medicare. (*Programs of All-inclusive Care for the Elderly)
  • You dropped a Medigap plan to join a Medicare Advantage plan for the first time , and now you want to switch back to your original Medigap plan
  • Your Medigap insurance ends through no fault of your own, i.e. your Medigap insurer goes out of business
  • You drop a Medicare Advantage or Medicare Supplement plan due to their negligence in administering the plan

Summary

To summarize, Medicare Advantage is a “replacement” plan which provides the same benefits as Medicare, but it is administered by a private insurance company. Medicare supplemental plans are “supplements” to Original Medicare and there are a variety of plans to choose from. Both options have some prescription drug coverage.

Medical Supplemental (Medigap)

  • You keep Original Medicare Part A and Part B and ADD supplemental insurance
  • Covers some or all of the costs not covered by Part A and Part B
  • Private insurance you purchase from private insurance companies
  • Medigap does not cover: long-term care, vision, dental, hearing aids, glasses, or private-duty nursing
  • You must purchase Medicare Plan D prescription drug coverage
  • Acceptance is guaranteed if you enroll at age 65. No medical questions are asked
  • Choose any doctor, hospital, or other service provider who accepts Medicare

Medicare Advantage (Replacement)

  • Enroll in Medicare Advantage Part C – this is a manage care option
  • Combines Part A and Part B
  • Government program provided by private insurance companies
  • Additional benefits available: vision, hearing, dental, health, and wellness
  • Most plans cover prescription drugs
  • Open enrollment opportunity each year between October 15th and December 7th
  • Medicare Advantage pays doctors, hospitals, etc. For best coverage, select doctors, hospitals, or other service providers within the plan’s network

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