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Medicare Advantage vs. Medigap: Choosing What Is Best For You

medicare advantage vs medigap concept image of medical insurance

Many features separate Medicare Advantage from Medigap (Medicare Supplement plans). The key is to determine which plan will best suit your needs. Both plans utilize the structure of original Medicare (Parts A & B) to create a more cost-effective way to receive the treatment for either yourself or your loved one(s).

Explaining Original Medicare

The Medicare program was signed into law in 1965 and began offering coverage in 1966 to those who qualified. For instance, to qualify for original Medicare, individuals must be 65 years of age or older, diagnosed with a disability, or have End-Stage Renal Disease (permanent kidney failure requiring dialysis or transplant).

Original Medicare has two parts: Part A (Hospital Insurance) and Part B (Medical Insurance). In short, Medicare Part A covers inpatient care in a hospital, skilled nursing care, inpatient care in a nursing facility, hospice care, and home health care. Medicare Part B covers doctor’s services, physical therapists, occupational therapists, and outpatient care. However, although Medicare includes coverage for these expenses, other expenses such as coinsurance payments, copayments, and deductibles are not. 

Medigap (Medicare Supplemental Plans)

Medigap provides supplemental funds from private insurers to cover out-of-pocket costs. Likewise, Medicare Supplement Plans strive to meet individual needs regarding out-of-pocket costs associated with Medicare. Also, Medicare Supplement Plans help reduce the costs of deductibles and coinsurance that come from medical payments that are not fully covered by Medicare. 

Which Plan Is Best for Me?

Finding the best Medigap plan for you is heavily dependent on your condition and the medical services you require. Licensed agents consider the health and needs of the Medicare recipient to provide adequate and cost-effective plan recommendations.

If you require Hospice, Skilled Nursing Care, or Foreign Travel, some plans will cover those expenses. Insurance companies offer Medigap plans as plans A through N. Each plan offers different coverage for out-of-pocket costs relative to original Medicare (Parts A & B). Also, medicare supplemental plans utilize the structure of original Medicare while providing coverage for any out-of-pocket costs related to coinsurance, copayments, deductibles and many more.

Medicare Advantage (Part C)

Medicare Advantage merges the forms of Medicare part A (Hospital Insurance) and Medicare part B (Medical Insurance). Also known as Part C of Medicare, Medicare Advantage plans utilize companies that are approved by Medicare to offer supplemental services. Medicare Advantage provides prescription drug coverage as well as coverage for vision, dental, and hearing. 

How Does It Work?

Medicare Advantage plans pay a predetermined and fixed amount each month that varies based on the individual and the service area. Companies approved for Medicare Advantage receive direct compensation from Medicare. Medicare Advantage Plans lack some benefits of Medigap and can often be more expensive. Unfortunately, each Medicare Advantage plan will charge the individual different out-of-pocket costs, depending on the plan.

Is Medicare Advantage Worth It?

There are different Medicare Advantage plans available, depending on your service area. Medicare Advantage typically requires the use of physicians, doctors, and therapists that are approved through Medicare and thus could affect your preferences when selecting a medical care professional. In addition, the requirements of Medicare Advantage plans include referrals to specific medical professionals in the network, which hospital you can go to, which facility you can utilize, and which suppliers you can use that offer emergency care.

Choosing A Plan

There are many benefits to both Medigap and Medicare Advantage plans. However, the reason for either plan is to eliminate out-of-pocket costs. Medicare Advantage includes out-of-pocket costs as it pertains to the advantages offered. With Medicare Advantage, preferences are irrelevant. Medicare Part C operates similarly to a PPO or HMO plan in which the individual may only use medical professionals in their network.

Medigap services all individual needs, as people can choose the plans offered according to their individual needs. Medigap is cost-effective and eliminates out-of-pocket costs. If you’d like to learn more about Medigap vs. Medicare Advantage, contact Begus Insurance Group today for a consultation!