What’s the Difference Between Medicare Advantage and Medigap?

For individuals approaching or at 65, whether regular Medicare is enough or if supplemental insurance is needed may arise. Medicare Parts A & B, known as Original Medicare, provide basic health coverage but do not cover everything. About 81% of traditional Medicare enrollees have supplemental coverage because Medicare only pays for part of healthcare costs, leaving individuals responsible for deductibles, coinsurance, and copayments. Medicare also does not cover dental, vision, and long-term care unless medically necessary.

Medicare Advantage and Medigap are two options to bridge the coverage gaps and control costs.

Medigap supplements Original Medicare by covering out-of-pocket costs (or OOP). Federal rules standardize Medigap policies and cover OOP expenses like deductibles and copayments. At the same time, Medicare Advantage is a private insurance alternative that widens the coverage of your Original Medicare.

Choosing between Medigap and Medicare Advantage depends on personal preferences and needs.

Medicare is a federal health insurance program in the United States that offers coverage for individuals aged 65 and above and those below 65 with specific disabilities. It is composed of two parts: Part A and Part B.

Medicare Part A covers inpatient hospital care, home health care services, and nursing facility care. Medicare Part B covers outpatient services such as doctor visits, preventive services, and medical equipment. Original Medicare allows beneficiaries to see any doctor or healthcare provider who accepts Medicare, providing them with flexibility and choice. It’s essential to give older adults and individuals with disabilities access to vital healthcare services.

When you look at Original Medicare, it may look much. But there are things in between that Medicare doesn’t fully cover. For example, you must pay OOP costs that Original Medicare doesn’t typically cover. Or, in case you need to cover your dental or vision, Original Medicare doesn’t cover that either.

Because of this, you have several options in addition to your Original Medicare. One is to enroll in either Medigap or Medicare Advantage.

The information below will help you understand what these two options would do to you.

Medigap, also known as Medicare Supplement Insurance, was created to fill the gaps left by Original Medicare. These plans cover the out-of-pocket costs that Medicare does not pay for, including deductibles, copayments, and coinsurance. Each Medigap plan offers varying degrees of coverage, represented by letters such as A, B, C, D, F, G, K, L, M, and N. Medicare beneficiaries can select the plan that best suits their needs and budget. By reducing out-of-pocket expenses and providing comprehensive coverage, Medigap plans add a cushion to your costs to those relying on Medicare for their healthcare needs.

Sometimes, out-of-pocket costs aren’t cheap, even if Medicare covers most of your medical bills. Medigap will cover it for you so that your expenses will be significantly lower (or, for most plans, your OOP will be free). Having this option will dramatically help you have peace of mind.

Medicare Part C, or Medicare Advantage Plan, provides an alternative to Original Medicare. Individuals can access additional benefits and coverage beyond what Original Medicare offers by opting for a Medicare Advantage plan. These extra benefits may include dental, prescription drug, vision, or hearing coverage. Private insurance companies offer Medicare Advantage Plans, but they must provide at least the same level of coverage as Original Medicare. This means that beneficiaries can enjoy the convenience of receiving their healthcare services from a network of preferred providers while still having access to essential medical services. Medicare Advantage plans offer a comprehensive approach to healthcare by combining the coverage of Original Medicare with additional benefits that can help individuals better manage and address their health needs.

In other words, Advantage plans widen the coverage that Original Medicare offers. However, you’ll still pay deductibles, copays, or out-of-pocket costs throughout your coverage.

Having discussed Original Medicare, we now understand that Medicare Part C and Medigap plans allow beneficiaries to widen their healthcare benefits and minimize financial burdens.

Choosing between Part C and Medigap is like choosing two different things. These options, taken during or after Medicare enrollment, can’t be combined. Medicare regulations prohibit you from having both options because some benefits might overlap.

For instance, both health plan options have a way to have prescription drug coverage. Some Medigap plans may provide coverage for prescription drugs, and Part C may include prescription drug coverage as part of their benefits package (or what they called Medicare Part D). Second, both health options cover a range of preventive services like wellness visits, vaccinations, and screenings. Because of this reason, one may have to be dropped in favor of the other plan.

Another apparent reason that Medigap and Part C are different is their primary purpose. As stated, Medigap covers out-of-pocket costs like copays or deductibles, while Medicare Part C extends the health coverage of your Original Medicare. Although both options offer different functions, you cannot have both simultaneously.

It is essential to know that you must go through Original Medicare before availing of both options. You can’t enroll in these options independently, so study the coverage options. Understand the coverage provided by Medigap and Medicare Part C. Medigap plans offer supplemental coverage that works alongside Original Medicare. At the same time, Medicare Part C widens Original Medicare coverage with a private insurance plan that must provide additional benefits.

We at Simpson Benefits value your choices and offer the optimum insurance that works for you. Because of this, we offer some tips to help you decide what option you would like to have along with your Original Medicare.

• Investigate network restrictions: Medicare Part C plans often have network restrictions, meaning you may have to choose healthcare providers from a specific group of providers. Medigap plans allow you to see any doctor or specialist who accepts Medicare patients.
• Measure your healthcare needs: Assess your healthcare needs and consider whether you require frequent specialist visits or access to specific doctors. Medigap plans generally provide more flexibility in choosing healthcare providers, while Medicare Part C plans may require referrals for specialist visits.
• Probe the costs involved: Compare the costs of both plans, including monthly premiums, deductibles, copayments, and coinsurance. Medigap plans often have higher premiums but lower out-of-pocket costs, whereas Medicare Part C plans may have lower upfront costs but involve cost-sharing through copayments and coinsurance.
• Seek prescription drug coverage: If you require prescription drugs, evaluate the availability and coverage of prescription drugs under each option. Medigap plans do not directly provide prescription drug coverage, but you can enroll in a separate Medicare Part D plan for drug coverage. Medicare Part C plans may include prescription drug coverage as part of their benefits package.
• Outline other additional benefits: Consider any benefits the plans offer, such as dental or vision coverage, fitness programs, or hearing aids. Medicare Part C plans often provide additional benefits beyond what Original Medicare and Medigap plans cover.
• Narrow down based on personal preference: Ultimately, choose the option that aligns with your healthcare needs, budget, and preferences. Consider factors such as provider choices, out-of-pocket costs, and coverage limitations.

Remember, it’s always recommended to thoroughly research, compare plans, and seek guidance from reputable resources or insurance professionals, like Simpson Benefits, to ensure you make the best decision based on your circumstances and priorities.