The Differences Between Medicare Supplements and Medicare Advantage

Turning 65 is all about making choices. In many cases, those choices are going to be fun ones. Do you want to take your spring vacation in Maui or Madrid? Do you want to use your retirement to learn woodworking, or to finally take that bike trip you’ve been planning?

But of course, this milestone birthday also comes with some tougher choices, too, like making the decision between different types of Medicare coverage, including Medicare Supplement and Medicare Advantage plans.

Original Medicare Can Leave Expensive Coverage Gaps

If you’re feeling a bit apprehensive about starting with Medicare, you’re certainly not alone. According to a recent study, more than a quarter of people expecting to start Medicare say that they feel “nervous” about enrolling. Another 14 percent describe themselves as “overwhelmed.” And as a result of their nerves about Medicare, nearly half of those with Medicare plans say that they “never shopped around to find the best coverage.”

Medicare can be daunting—but it doesn’t have to be. For starters, it’s important to realize that there are many different options out there, which can help you:

  • Save money
  • Make the most of your time
  • Get the health services you need
  • Live the lifestyle you’ve been planning for in retirement

For most of us, the choice is going to come down to Medicare Supplement plans (also called Medigap), and Medicare Advantage plans.

At their core, both of these plan options are about helping you save on your healthcare costs—especially the expensive “gaps” left over by original Medicare.

As millions of Americans have discovered, even with an original Medicare policy in place, you can easily spend thousands of dollars each year for out-of-pocket medical expenses, including deductibles, copays, and coinsurance. These costs can really add up over time, particularly if you face an unexpected illness or accident. And with original Medicare, there is no annual limit on your out-of-pocket expenses—which means your costs could skyrocket if you fall seriously ill. At the same time, Medicare Part D comes with a coverage gap that we call the “donut hole,” meaning that you may face a period that forces you to pay all of your prescription drug costs out of your own pocket, once you’ve spent a certain dollar amount.

Medicare Supplements Vs. Medicare Advantage Plans

Medicare Supplement and Medicare Advantage plans are two different paths to managing your Medicare expenses. These two solutions work in different ways, and offer different pluses and minuses, depending on your unique needs. Here’s how they break down, in a nutshell:

  • Medicare Advantage is a private alternative to original Medicare. When you enroll in an Advantage plan (sometimes called Medicare Part C), your chosen coverage must provide benefits equivalent to Medicare Parts A and B, at a minimum. At the same time, Advantage plans may offer extra benefits above what traditional Medicare offers, including prescription drug and vision coverage.
  • Medicare Supplements are private insurance plans designed to work with original Medicare to extend your coverage options and lower your out-of-pocket costs. There are ten different standardized types of Medicare Supplement insurance plans (also known as Medigap plans), offering different benefits. Each type of plan helps you manage your out-of-pocket expenses, including copayments, coinsurance, and deductibles.

Finding What Works for You

So, which type of Medicare plan is best? At the end of the day, it’s more about determining whether Medicare Advantage or Medigap will be best for you. Ultimately, making the right choice will come down to personal factors, all unique to you. As you consider between Medicare Supplements and Medicare Advantage, it’s worth asking questions like:

  • “How much do I want to pay over time?”
  • “What level of healthcare and treatment will I need?”
  • “Do I want to keep my current doctor?”
  • “How much am I going to travel?”
  • “How ‘hands-on’ or ‘hands-off’ do I want to be with paperwork?”

Let’s dive into each of those considerations in some more depth, and highlight some of the most important differences between Medicare Supplements and Medicare Advantage plans:

Overall Costs

With Medicare Advantage plans, you may be able to save money on your monthly premium. However, Medicare Supplement plans can often allow you to dramatically save on out-of-pocket costs, which can allow you keep your overall expenses much lower over time. Keep in mind that with both Medicare Supplement and Medicare Advantage plans, costs and coverage offerings will vary from plan to plan. It’s important to comparison shop and see what options are available to you.

Level of Care

Are you someone who frequently goes to the doctor—or do you expect to require more consistent care over time? Medicare Supplement plans can help you dramatically cut down on your out-of-pocket costs, and simplify the payment process, compared to Medicare Advantage plans, making them a more appealing option if you require frequent care.

Healthcare Network

Many Medicare Advantage plans operate under HMO or PPO formats, meaning that your choice of network may be restricted. You may need to switch medical providers, or attain a referral in order to see a specialist. Medigap plans are usually more flexible, since any provider that accepts original Medicare will also accept Medicare Supplement insurance.

Your Lifestyle

Turning 65 often means getting to go out and live life to the fullest. You may be traveling frequently, to take in all of the advantages afforded by retirement. Many other families choose to become “snowbirds,” living in different spots throughout the year. Medicare Supplement plans are often more flexible, allowing you to see providers all over the country (and sometimes internationally), due to their unrestricted networks. Medicare Advantage plans are often much more locally focused.

We’re Here to Make Finding Your Medicare Coverage Easy

With the right Medicare coverage in place, you could save thousands of dollars every year, which you could put toward the important things, like:

  • Keeping your lifestyle intact
  • Enjoying your major life goals in retirement
  • Safeguarding your financial legacy for your family

Interested in Medigap? Curious about the costs of Medicare Advantage? You don’t have to look for these important answers all on your own. Led by our founder and principal consultant Matt Peebles, the Enrollment Specialists can help you get to the bottom of your most pressing Medicare questions, and find the coverage that works best for your lifestyle—and all at absolutely no cost to you.

When you work with Matt, he’ll sit down with you and really get to know your unique circumstances, and then weigh in the many factors that go into choosing a Medicare plan, including costs, provider networks, and the levels of coverage your health needs require.          He’ll talk you through all of it and make sure all of your questions are answered, at every step of the way.

From there, Matt can help you choose the option that’s right for you, making sure your costs are minimized while your coverage is always at its peak. And even after you’ve enrolled, for the entire life of your policy, Matt will be your go-to guy whenever you have questions. With Matt on your side, you won’t ever need to bother with the hassles of call centers, online chat rooms, or canned responses. You’ll always be able to get a hold of this health insurance superhero, and get solutions from a person you know and trust.

Want to fill in the gaps in your coverage? Ready to say, “I Got A Guy” for all things Medicare? Don’t hesitate to drop us a line today to start understanding all of your options.

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