Difference between Medigap Plans and Medicare Advantage

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When it comes to insurance, it would be fair to say you either pay now or pay later. If you pay now, you are choosing to pay a higher premium with the expectation your insurance plan will pay more when you file a claim. The pay later option means a lower monthly premium and leaves the Medicare Beneficiary with a greater out of pocket expense when seeking medical treatment. Difference between Medigap Plans and Medicare Advantage

There are several reasons to choose a Medigap Plan over Medicare Advantage Plans. The comprehensive benefits provided by a Medigap, as known as Supplement Plans can limit or eliminate out of pocket costs. Individuals covered by a Medigap Plan avoid network restrictions and have coverage worldwide. Most importantly, Medicare Supplement Plansallow the insured to budget the cost of their coverage and reduce unexpected expenses.

Medicare Part A

For 2018, the Medicare Part A deductible is $1340, then the plan pays 100% of hospital expenses for that benefit period. The benefit period lasts 60 days from the start of the hospital visit. If your hospital stay lasts longer than 60 days, you will incur a per day coinsurance.

The Medicare Beneficiary is responsible for that daily coinsurance. After 60 days, or in the event of an unrelated condition, if the Medicare Beneficiary is admitted to the hospital, a new benefit period starts, and the $1340 deductible is applicable, again. This can continue throughout the policy year.

Medicare Part B

Medicare Part B covers preventive services and medically necessary services such as doctor visits, durable medical equipment, diabetic supplies, and drugs administered in a doctor’s office.

The Medicare Part B deductible is $183 for the 2018 year, after the deductible is satisfied, Medicare pays 80%.

Gaps in Coverage

As you can tell, Original Medicare leaves gaps in coverage. There are gaps in Part A and gaps in Part B. Original Medicare does not have any out of pocket maximums or provide any caps to minimize the loss incurred by the Medicare Beneficiary. Your exposure to loss is undefined; there is nothing to protect the Insured person from financial losses.

Take into account that it cost about $5,000 to go to the emergency room. That’s without being admitted and without a gamut of tests. The gaps in coverage left by Original Medicare can be filled quickly and affordably by enrolling in a plan offered by any reputable insurance provider.

Medigap Plans Protect

Medigap plans do have a premium that is in addition to your Medicare Part A and Part B. The premium amount for your Medigap Plan is paid by the Medicare Beneficiary directly to the Insurance Company.

With a Medigap plan, you choose the amount of risk you are willing to take, the premium is reflected in the amount of benefits you elect. Regardless of the underwriting company (the name on the card you carry), the benefits are the same and are differentiated by letters.

Most people choose Plan G. Medigap Plan G, covers everything not covered by Medicare except for the $183 Part B deductible. The Plan F, provides the most protection to the Medicare Beneficiary, and minimizes the medical costs that could be incurred.

Of course, you can save on premium dollars if you are willing to consider some of the other plans. This is where your licensed insurance agent can help, by shedding some light on the various options that will provide the most coverage and still keep the premium within your budget.

Medigap Offers Freedom

You’re free to choose your doctors and hospitals. These plans allow Medicare Beneficiaries to select doctor’s based on their personal preference, in addition to choosing the hospitals they utilize. The only requirement, is that the provider accept Medicare.

The freedom offered by being insured can be liberating. Just ask someone who has been limited to a list of doctor’s or had a claim from a specialty hospital denied. Treatment of medical conditions/ diseases can be determined by the patient and doctor.

The Disadvantages of a Medicare Advantage Plan

Medicare Advantage Plans require the Medicare Beneficiary to use network doctors and hospitals. With most advantage plans, going out of network isn’t an option as there are no out of network benefits. Most have network restrictions and seeing a specialist will require a visit to your primary doctor to obtain a referral.

There are only specific periods during the year when you can enroll or switch to another Medicare Advantage Plan. Otherwise, you can’t change your Plans during the year.

The premium on a Medicare Advantage Plan can be low or even zero. However, the Medicare Beneficiary will incur expenses over the course of the policy year, including deductibles, copayments and coinsurance. Typically, Medicare Advantage Plans have an out of pocket maximum of at least $6,000.

You Get What You Pay For

Medigap Policies are the best choice for securing the most comprehensive coverage. You keep your Original Medicare Parts A and B. Then choose the Medigap Plan that best fits your needs and fills the gaps in coverage left by Medicare. A qualified licensed insurance agent can help you compare the costs and benefits of your options. When comparing your choices, it will become apparent which option will best suit your needs and budget.

Medicare Beneficiaries choose supplement plans for several reasons. Most people buy a Supplement Plan because they want to protect their assets. After more than 40 years in the workforce, it’s prudent to protect that which you have worked so hard to earn.

Others select a Medigap Plan for the freedom to choose their caregivers, hospital and doctors. Medigap Policies provide coverage at any doctor or facility that accepts Medicare. In addition, these Supplement Plans provide coverage when you travel outside the United States.

When choosing a plan to fill the gaps left by Medicare, Medicare Beneficiaries are electing to purchase one of the Medigap Plan options. These plans offer a set monthly premium amount that Medicare Beneficiaries can work into their fixed income.

A set monthly premium works best for Medicare Beneficiaries as the unexpected out of pocket costs associated with a Medicare Advantage Plans leaves the insured person financially vulnerable.

There are several options available and the best way to shop around for the plan that meets your needs is to contact a qualified licensed agent. Your agent will ask you some questions to better understand your concerns and budget.

Once your agent understands your specific needs, he/ she will be able to check with the carriers in your region to advise which companies offer the best premium amounts for the coverage you’ve elected.

Enrollment into a supplement plan is best when you are first eligible for Medicare Part B. However, if you have delayed enrolling in Part B, because of coverage through your (or your spouse’s) group health insurance plan with an employer, you may be able to enroll in Part B and your Medigap Plan when that coverage ends. You will want to take action prior to the group plans termination day. It’s a good idea to contact your insurance agent as soon as you suspect any changes to your coverage.

Difference between Medigap Plans and Medicare Advantage

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About the Author

Jagger Esch

Jagger Esch is the President & CEO of Elite Insurance Partners and MedicareFAQ, a senior healthcare learning resource center. As a young entrepreneur and seasoned insurance expert, he has a passion for helping people. Since the inception of his first company in 2012, he has been dedicated to helping those eligible for Medicare by providing them with resources to educate themselves on all their Medicare options. Jagger lives in the Florida sunshine state and loves boating with his family on the weekends.

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Jagger Esch
Medicare Expert

Jagger Esch is the President & CEO of Elite Insurance Partners and MedicareFAQ, a senior healthcare learning resource center. As a young entrepreneur and seasoned insurance expert, he has a passion for helping people. Since the inception of his first company in 2012, he has been dedicated to helping those eligible for Medicare by providing them with resources to educate themselves on all their Medicare options. Jagger lives in the Florida sunshine state and loves boating with his family on the weekends.

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