Medicare Advantage (part C) vs. Medicare Supplement (Medigap)
Local Health Insurance Agent Shelly Rogers with Nevada Insurance Enrollment has been flooded with questions from her customers about the differences between Medicare Advantage and Medicare Supplement plans.
She explains that during The Medicare Annual Election Period (AEP), which is from October 15th through December 7th each year, many people may ask the question, “Do I want a Medicare Advantage Plan or a Medicare Supplement Plan (Medigap)?”. To help someone answer that question, they have to know the differences between these two programs to make a good decision.
Medicare Advantage Plan (Part C)
Most (not all) Medicare Advantage plans have “Part D” which is prescription drug coverage built into the plan. A person’s prescriptions can be covered with these type of plans called Medicare Advantage Prescription Drug (MAPD). It’s important that you verify with your health insurance broker whether your very specific medications that are prescribed to you are covered under the health insurance plans’ “formulary” (this is a list of covered medications each insurance company will cover under their plans). You’ll pay different amounts with different plans. You’ll need a very knowledgeable broker to help you research this. Don’t just enroll into a plan without looking at ALL your plan options in Nevada. For example, one company prescription costs to you could be a couple hundred dollars compared to another company costs being $0.
Many Medicare Advantage (“MAPD”) plans have a $0 premium and some have a small premium. Medicare beneficiaries with these MAPD plans could still have out of pocket expenses like “co-pays“, “deductibles“ and “out of pocket maximums” too. Some MAPD plans are HMO while others are PPO. They generally will have a “Network” of doctors and hospitals. With HMO plans you’ll need to pick a primary doctor, called a PCP, and you’ll need a referral from your PCP to see specialists. With the PPO plans you are not required to pick a primary. You can see anyone you’d like to, provided they’ll bill the insurance plan, and when you see providers inside their network, you’ll pay less. Your out-of-pocket expenses are more on the PPO plans. It’s very important to compare these two types of plans. Also, if in one year you decide you want to try the HMO, you can switch during open enrollment. Or vice versa, if you have a PPO and want to cut your expenses and try an HMO, you can always switch during open enrollment.
If someone has Medicare Part A and Part B, you cannot be turned down for a Medicare Advantage plan. You must live inside the insurance plan’s “service area”. Most HMO plans will require their members to select a primary doctor, who is responsible to oversee care for that individual.
If a person enrolls into a MAPD plan, their claims are paid by a private insurance company instead of original Medicare. They’ll use their private insurance company’s health card, not their Medicare card when they see their doctors.
Each year the health insurance company offering the Medicare Advantage plan can renew their plans or can terminate their plans. It is a year-to-year contract. Medicare Advantage (MA) is a type of health insurance offered by private insurance companies that have been approved by Medicare and are referred to as “Medicare Part C”. These plans are required to offer the same basic benefits as Medicare or better and can offer additional benefits too such as Dental, Vision, and more.
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What is a Prescription Drug Deductible?
In the world of health insurance, “deductible” is a common word. It refers to an amount of money that you pay out of your pocket before the insurance company begins to pay. A prescription deductible is the portion you’d pay first, then after you’ve paid the deductible, you may only have to pay a co-pay when you pick up your medication.
If you are single, you would only have to meet your prescription deductible. If you have two or more people in your family, each member may have to meet their own prescription deductible which could be up to 2 deductibles in the family. A prescription deductible is different and separate from the medical deductible, unless otherwise stated. One deductible is for medical, ie: hospitalization, doctors, etc., and the other deductible is for filling your prescriptions.
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Medicare Supplement (Medigap)
Medicare Supplement (Medigap) is private health insurance. It sits on top of Medicare to supplement it. It fills in the “Gaps” of original Medicare. Medicare Supplement plans have a premium associated with them. A person can choose their own doctors and hospitals that accept Medicare, without having to worry about “Networks” or “Referrals”. They can travel anywhere in the country and be covered by seeing any doctor that accepts Medicare.
With a Medicare Supplement Plan G, a person will currently (year 2022) have a $233 deductible each year (changes yearly) and once their deductible is met, they won’t have further medical costs (this does not include prescriptions, prescriptions are a totally separate issue). Of course, you’ll continue to pay for Medicare Part B along with your Medicare Supplement plan. You don’t want to cancel Medicare Part B, unless you have special circumstances, but get their advice before making any decisions. Medicare beneficiaries will only have their Medicare Supplement premium to worry about each month, and the small Medicare Plan G deductible, their medical expenses are covered after that point. No surprises with medical expenses. Remember, your prescription costs are a totally separate issue, and you’ll need to get a separate drug plan, or you’ll end up with lifelong penalties. Speak with your Broker.
You can purchase a Medicare Supplement plan (Medigap) any time of the year. You will, however, after having Medicare Part B for 6 months, need to go through some “Underwriting” questions to see if you can be approved. The first 6 months they’ve had Medicare Part B, a person cannot be turned down.
Insurance companies can charge different rates for the exact same Medicare Supplement Plan G (or any other Medigap plan), so it makes sense to shop prices. A Medicare Supplement Plan G with insurance company “A” will have the exact same benefits for a Supplement Plan G with insurance company “B”. So, shop around and get the best price.
Medicare Supplement plans generally require a separately purchased prescription drug plan. This is important. You’ll pay a life-long penalty if you go without having a qualified “credible” drug plan. Having a trusted knowledgeable licensed broker/agent appointed by MULTIPLE insurance companies to give you lots of options and to help you avoid these penalties is so important!
Please Note: It’s important to understand that a person cannot have a Medicare Advantage plan and a Medicare Supplement plan at the same time.
Let’s Compare: Keeping in mind that Medicare Advantage (Part C) and Medicare Supplement plans are NOT the same thing. They are very different, and you cannot have both. You must choose.
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Medicare Advantage
Many people love the idea of having a Medicare Advantage (Part C) plan because it has a minimal monthly premium. The MAPD plans have prescription coverage built into the plan, so you don’t have to buy a separate drug plan. Most MAPD plans also have added benefits like dental and vision coverage, transportation, gym memberships, etc. So many of these plans you’ll not need a separate dental or vision plan. They do, however, have “networks” of doctors and hospitals. You need to consider the potential costs of your yearly medical expenses. What is the plan’s “out of pocket maximum’s”? You can’t always calculate or predict these expenses. Also look at your co-pays, especially daily co-pays for hospital admissions. Generally, the costs to you are very low, but please make sure to look at this.
Medicare Supplement
With a Medicare Supplement Plan G, you would pay your monthly premium and your very small Part B deductible, and that’s it. No costs for the most part after that small deductible. You just pay your monthly premium and see any doctor in the country that takes Medicare. Your monthly costs are always the same, and that can really be a benefit knowing what your expenses will be. Although the monthly expenses are a consideration that you’ll pay on top of Medicare. So monthly expenses are a consideration. You’ll also need to buy a prescription drug plan that is purchased separately. Without a drug plan you’ll have lifelong penalties. Don’t forget the drug plan!
Getting Help with Nevada Insurance Enrollment
It is hard to determine what route to take when it comes to health insurance. At Nevada Insurance Enrollment, our health insurance agents can help you review the different programs to ensure you are enrolled in the best plan possible for all your needs.
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