The Battle Between Medicare Supplement vs Medicare Advantage: A Senior's Simplified Guide to Medicare Advantage and Medicare Supplement Plans

February 2nd, 2024

Medicare has evolved significantly since its inception in 1965. Rising healthcare costs have made the limitations of Original Medicare more apparent. As a result, many seniors opt for additional coverage through either Medicare Supplement or Medicare Advantage plans. Here's an easy-to-understand breakdown of these two options:

Medicare Supplement (Medigap) Plans

Works with Original Medicare: It's a secondary insurance to cover costs not paid by Original Medicare.Regulated by State Departments of Insurance: Different rules compared to Medicare Advantage.

Advantages:

• Provider Flexibility: No network restrictions.
• Is accepted anywhere Medicare is accepted.
• Predictable Costs: Fixed monthly premiums.
• Low Out-of-Pocket Risk: Supplements cover most remaining costs.
• Less Regulation: Fewer sales restrictions.

Disadvantages:

• Premium Cost: Can be expensive.
• Lack of Extra Benefits: No dental, vision, or other supplemental benefits.
• Annual Premium Increases: Costs can rise over time.
• Underwriting Requirements: Medical assessment needed unless new to Medicare.
• No Prescription Coverage: Separate plan needed for medications.
• You will have to purchase a separate policy in addition to your Medicare Part B premiums and Medicare Supplement plans.

Medicare Advantage Plans

A Private Alternative: Replaces Original Medicare with a single policy.

Advantages:

• Low or No Premiums: Often very affordable.
• Must cover the same standard or above where Medicare covers.
• Additional Benefits: Includes dental, vision, and other extras.
• Prescription Coverage Included: No need for a separate plan.
• No Medical Underwriting: Easier to qualify.

Disadvantages::

• Higher Out-of-Pocket Risk: More cost-sharing compared to Medigap.
• Most come with a MOOP (Max-out-of-pocket/ CAP)
• Network Restrictions: Must use in-network providers to avoid extra costs.
• Enrollment Periods: Limited times to enroll.
• Typically during Annual Enrollment Period (AEP) between Oct. 15th- Dec. 7th, although there are some situations that may trigger a Special Election Period (SEP).
• More Regulations: Includes Scope of Appointment and contact permissions.

Key Considerations

• Costs: Medicare Supplements can be more expensive but offer predictable expenses. Medicare Advantage often has lower premiums but higher out-of-pocket costs.
• Flexibility vs. Benefits: Medigap offers more flexibility in choosing providers, while Medicare Advantage provides additional benefits.
• Eligibility and Enrollment: Medigap requires medical underwriting after the initial enrollment period, whereas Medicare Advantage has open enrollment periods and no medical underwriting.

Conclusion

Seniors should consider their healthcare needs, budget, and preferences when choosing between Medicare Supplement and Medicare Advantage plans. Each option has its benefits and limitations.
Next steps, reach out to one of our Medicare Experts @ Kim & Co. Agency and book an appointment now by clicking here.

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Credible Sources

- [Medicare.gov]

- [National Council on Aging - Medicare]

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