How Do I Choose Between a Medigap Plan and a Medicare Advantage Plan?

Medicare Open Enrollment Gives You Several Options to Consider.

Couple Shopping on MedicareMall.comThree of those options are:

  1. Switching from Original Medicare (Medicare Parts A and B) to a Medicare Advantage plan
  2. Switching from a Medicare Advantage plan back to Original Medicare
  3. Switching from one Medicare Advantage plan to another

On the surface, the middle option may seem less desirable than the other two. Medicare Advantage, after all, is generally considered a vast improvement over Original Medicare. Many Medicare Advantage plans are premium-free, though they require continued payment of the Medicare Part B premium. Since Medicare Advantage offers fuller coverage than Original Medicare, this means—as many of the 13 million Americans currently enrolled in Medicare Advantage have discovered—that Medicare Advantage often provides the option of far superior coverage for essentially the cost of Original Medicare.

So doesn’t that mean it would be foolish to switch from Medicare Advantage back to Original Medicare?

Not at all. For many people, switching back to Original Medicare is the better choice … assuming they don’t intend to roll the dice with Original Medicare alone.

“Should I Return to Original Medicare?”

Returning to Original Medicare opens up the option of enrolling in a Medigap plan, which is designed to fill the gaps in Original Medicare while making it easy to budget healthcare costs. Like Medicare Advantage, Medigap goes far beyond what Original Medicare provides.

But which is better … or which is better for you?

Here is some information that may help you to make an informed choice between Medigap and Medicare Advantage during Open Enrollment or any other time you’re evaluating your Medicare options.

Medigap Plans

Medigap insurance, also known as Medicare supplement insurance, is designed to supplement Original Medicare coverage.

There are 10 supplement plans on the market, from Medigap Plan A to Medigap Plan N. Each plan has fixed monthly premiums and its own degree of coverage. Monthly premiums often run from $100-$200 for a nonsmoking 65-year-old.

Medigap is noted for the flexibility it offers, as supplement plans allow you to see a wide range of healthcare providers. You are not limited to a network of providers. If you are a frequent traveler, this is an important consideration.

Because Medigap does not cover prescription drugs, supplement plans are best combined with Medicare Part D prescription drug plans, which cost about $30 to $40 a month but can generally be counted on to save you a great deal more.

The most popular, and most comprehensive, Medicare supplement plan is Plan F, which is designed to fill all the high-risk gaps in basic Medicare coverage. With Plan F you won’t have to worry about paying one penny out of pocket for any Medicare-approved hospital or medical costs including deductibles, co-payments, and coinsurance charges. Plan F covers all Medicare-approved costs not covered by Medicare Part A and Medicare Part B.

Medicare Advantage Plans

While Medigap supplements Medicare Part A and Part B coverage, Medicare Advantage plans replace Original Medicare coverage. Most Medicare Advantage plans include prescription drug coverage, and Medicare Advantage can also provide additional coverage in other areas of health including dental, vision, and hearing.

When you are enrolled in Medicare Advantage, Medicare pays a fixed amount for your healthcare every month to the company providing your Medicare Advantage plan.

Instead of requiring you to pay the substantial deductible and coinsurance costs associated with Original Medicare, Medicare Advantage plans often require only modest co-payments.

Copay requirements vary widely from plan to plan, however, with some companies using copay formulas that may result in higher-than-expected costs for specialist or emergency care, or hidden costs that may be difficult to budget for.

Most Medicare Advantage plans require you to see doctors and receive health services within your plan’s network. In some cases, you are allowed to go outside the network at a higher cost, but Medicare Advantage is probably better designed for you if are willing to stay within your plan’s network and do not expect to travel a lot during the life of your policy.

Ability to see doctors outside the network varies from plan to plan. Medicare Advantage HMO (Health Maintenance Organization) plans, for example, normally require you to use hospitals and specialists within the plan’s network. PPO (Preferred Provider Organization) plans allow you, at additional cost, to use doctors, providers, and hospitals outside the network. Medicare Advantage PFFS (Medicare Private Fee-for-Service) plans, meanwhile, usually allow you to visit any doctor or hospital that agrees to treat you.

Most Medicare Advantage plans, however, do not offer that degree of flexibility. Medicare supplement plans do, so if you’re looking for a plan that can travel with you—even outside the United States, in some cases—you’ll probably lean more toward Medigap. But if you think your needs can be met within a network, Medicare Advantage may be right for you.

Medicare Advantage premiums are low, but the hidden costs can hit you if you’re not careful. Medigap costs are more consistent, and generally easier to budget for.

Compare Medigap and Medicare Advantage plans available in your area by consulting MedicareMall’s handy quotefinder. Then, to make sure you’re on your way to making the choice that best suits your circumstances, talk your options over with a licensed, bonded MedicareMall Medicare plans representative.

We’d like to hear where you stand in the Medigap vs. Medicare Advantage debate. Which do you lean toward?

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