As Medicare recipients, we spend most of our time feeling confused. Confused while on the phone with Medicare, confused when submitted claims take forever to process, and confused when the whole system seems to have racked up a hefty chunk of change on your behalf. For all these reasons and more, sorting through your coverage options can feel downright daunting. It’s your first day on Medicare and there you are, fending off Special Enrollment Periods, considering early enrollment, and weighing Medicare supplement (Medigap) plans—which provide extra coverage from private insurance companies in addition to Original Medicare coverage—against Medicare Advantage plans—which also provide extra coverage and often drug coverage with a local health maintenance organization (HMO), preferred provider organization (PPO), and sometimes a private fee-for-service (PFFS) provider network as well. Choosing is hard enough, but confusion arises when sorting through what may be available in your location. Medicare Advantage (MA) plans kicked off in the mid ‘70s and have only grown in popularity in recent years, both through their own allure and recognition for the superior coverage Medigap plans are known to offer. As of 2019, 34.4 percent of those with Medicare said they chose an MA plan, and for good reason.

Supplemental coverage for Medicare: Medicare supplement plans (Medigap) are private insurance plans that cover the areas of Original Medicare (Parts A and B) that aren’t covered. These plans are standardized and regulated at the federal level and include a total of 10 standardized plans marked from A through N.
Things to know about Medicare supplement plans:

Coverage: Medicare supplement plans help pay the deductibles, copays, and coinsurance that Original Medicare does not otherwise cover. Plans offer coverage for various out-of-pocket expenses, which vary by plan and include Part A deductible; Part B deductible; Part B coinsurance; Part B excess charges; Skilled nursing facility coinsurance; Foreign travel emergency care.
Network restrictions: Many Medicare Advantage plans operate within provider networks, which means that to receive full benefits you might have to use doctors, hospitals, or other healthcare providers within the plan’s network. Some plans provide out-of-network coverage but ask you to pay more.

Cost-sharing: Some Medicare Advantage plans have lower premiums than Medicare supplement plans, but significant differences persist at the point of care: Medicare Advantage plans will likely involve copayments, coinsurance and/or deductibles for health care services, whereas Original Medicare does not. These costs can vary depending on the structure of your plan and the health care services you use.

Opting for Medicare Supplement vs Medicare Advantage: One of the most pressing choices you need to make concerns the types of Medicare plans that you should opt for: Medicare supplement or Medicare advantage. Here are a few things you need to consider when making this decision:

Your Current and Future Health Status: Review your current health status and anticipated health needs to decide which plan best fits your circumstance. If you expect to need frequent doctor visits or want to have easy access to specialists — or both — you will likely want to choose a Medicare supplement plan with broad provider choice, so you can go to any provider you want without any hassle. On the other hand, those who are looking for the convenience of prescription drug coverage all in one place and other added benefits like dental and vision care may gravitate toward a Medicare Advantage plan.

Budget: If your budget is a consideration, compare the monthly premium for both the Medicare supplement and the Medicare Advantage plans, along with the deductibles, copayments and coinsurance. Medicare supplements may cost more per month than Medicare Advantage plans, but they are usually predictable expenses with minimal out-of-pocket costs. Medicare Advantage plans may have lower monthly premiums but may add cost-sharing for health services.

Provider preferences: Consider whether you already have established relationships with health providers. Consider further if you would prefer to have the freedom of going to any doctor or specialist, with no limitations involving in-network providers. If the choice of the provider is very important, a Medicare supplement plan may be more preferable. However, if a person is comfortable with in-network providers and deems it convenient to have all their coverage under one plan, then Medicare Advantage is preferable.

Conclusion: In summary, both Medicare Supplement and Medicare Advantage plans have valid benefits and valid alternatives for their holder’s coverage. The decision to take either type of plan really becomes a personal choice relating to budget and individual healthcare needs or preference. Take time to compare features, costs, and coverage that may best meet your needs for comprehensive health care coverage during retirement. In addition, you should consider contracting with a duly licensed insurance agent or Medicare advisor who could give you individual advice and help steer through the intricacies of Medicare enrollment. Consider carefully and choose the plan that an informed decision would best support your health and financial well-being.


Tim Elenz