Medicare Advantage plans vs. Medicare Supplement insurance

Medicare Advantage plans (Medicare Part C) and Medicare Supplement insurance (Medigap) are two private insurance options to consider when evaluating your Medicare coverage.

However, they work in two very different ways.

A doctor speaks with a couple about coverage options

How are Medicare Advantage plans and Medigap different?

Medicare Advantage plans are an alternative way to get your Original Medicare Part A and Part B benefits, plus some plans may include additional benefits such as dental, vision, and prescription drug coverage.

Medicare Supplement insurance is a type of insurance coverage that helps you pay for your Medicare Part A and Part B copayments, deductibles, and other out-of-pocket costs.

Both types of health plans are sold by private companies and require you to be enrolled in Medicare Part A and Part B to be eligible for coverage.

Medicare Advantage plans and Medicare Supplement plans are not the same thing. You cannot have a Medicare Advantage plan and a Medicare Supplement Insurance policy at the same time.

Medicare Advantage plans can offer additional benefits

When you enroll in a Medicare Advantage plan, you get the same coverage as Medicare Part A and Part B, plus any additional benefits that come with your specific Medicare Advantage plan.

Some of the additional benefits that some Medicare Advantage plans may offer include:

  • Prescription drug coverage
  • Dental and vision coverage
  • Hearing care and allowances for hearing aids
  • Gym memberships and/or wellness programs
  • Non-emergency medical transportation
  • Home health aides
  • Home modifications to assist with aging in place like bathroom grab bars or wheelchair ramps

Medicare Advantage plans provide at least the same benefits as Medicare Part A and Part B. However, they may come with different out-of-pocket costs and network restrictions, depending on the specific plan you enroll in.

The first time that you may be able to enroll in a Medicare Advantage plan is during your Initial Enrollment Period (IEP).

Medicare IEP graphic

This seven-month period begins three months before you turn 65 years old, includes the month of your birthday and continues for another three months thereafter.

After your IEP ends, you may be eligible to enroll in a Medicare Advantage plan during other times of the year, such as:

  • Annual Enrollment Period (AEP)
    The Annual Enrollment Period (also called Medicare Open Enrollment Period for Medicare Advantage) takes place from October 15 to December 7 each year.

  • Special Enrollment Period (SEP)
    A Special Enrollment Period may be granted at any time throughout the year, depending on your situation. Circumstances such as moving to a new area or losing employer coverage are just a few of the types of situations that may qualify you for a Medicare SEP.

Call to speak with a licensed insurance agent who can help you determine your Medicare Advantage plan eligibility. 

 

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Medicare Supplement plans can help cover out-of-pocket costs

If you do not enroll in a Medicare Advantage plan, you can buy a Medicare Supplement insurance policy to help pay for Medicare Part A and Part B deductibles, copayments, coinsurance, and other costs.

Medicare Supplement insurance plan options are regulated by the federal government, but policies are sold by private insurance companies.

There are 10 standardized plan options to choose from in most states. Each of these types of plans offers a different combination of 9 specific benefits.

You can use the plan comparison chart below to compare Medigap plans and the types of costs they cover.

Medicare Supplement Insurance Plans 2019
Medicare Supplement Benefits A B C D F1 G K2 L3 M N4
Part A co-insurance and hospital costs
Part B co-insurance or co-payment 50% 75%
First 3 pints of blood 50% 75%
Part A hospice care co-insurance or co-payment 50% 75%
Co-insurance for skilled nursing facility     50% 75%
Medicare Part A deductible   50% 75% 50%
Medicare Part B deductible                
Medicare Part B excess charges                
Foreign travel emergency     80% 80% 80% 80%     80% 80%
1. Plan F offers a high-deductible plan. This plan requires you to pay a $2,300 deductible in 2019 before it covers anything.
2. Plan K has an out-of-pocket yearly limit of $5,560 in 2019. After you pay the out-of-pocket yearly limit and yearly Part B deductible, it pays 100% of covered services for the rest of the calendar year.
3. Plan L has an out-of-pocket yearly limit of $2,780 in 2019. After you pay the out-of-pocket yearly limit and yearly Part B deductible, it pays 100% of covered services for the rest of the calendar year.
4. Plan N pays 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to a $50 copayment for emergency room visits that don’t result in an inpatient admission.
View an image version of this table.

The best time to buy a Medicare Supplement insurance policy is during your Medicare Supplement insurance open enrollment period, which is a 6-month period that begins the same month you are both 65 years old and enrolled in Medicare Part B.

It’s wise to enroll in a Medigap plan during your open enrollment period because you have guaranteed issue rights at this time. That means insurance companies are not allowed to use medical underwriting to determine your plan premium costs.

Should you wait until after your enrollment period has ended, you can still sign up for a Medigap plan at any time. You could be charged more for your plan, however, due to your health. You could even be denied coverage altogether

How much do Medigap plans and Medicare Advantage plans cost?

Because Medicare Advantage plans and Medicare Supplement Insurance plans are sold by private insurance companies, the cost of these plans can vary from one location, carrier or plan to the next. 

  • The average premium paid for a Medicare Advantage plan in 2018 was approximately $35 per month.1 Some Medicare Advantage plans even offer $0 premiums.

  • The average premium paid for a Medicare Supplement Insurance plan in 2018 was around $126 per month.2

It’s important to remember when comparing these costs though that these types of Medicare plans are quite different in what they cover and how they operate, so a cost comparison between the two is not going to be apples to apples.

It’s also important to note that if you are enrolled in a Medicare Advantage plan, you typically must continue to pay your Medicare Part B premium.  

What are Medicare plan trial rights?

If you are unhappy with your Medicare Advantage plan or Medicare Supplement insurance policy and have had it for less than a year, you may be able to try out the other option.

For example, you can buy a Medicare Supplement Insurance policy if you try out a Medicare Advantage policy and decide you don't want it.

Can I switch from Medicare Advantage plan to Medicare Supplement Insurance?

If you joined a Medicare Advantage plan when you were first eligible for Medicare when you turned 65 and you want to change within the first year, you can switch back to Medicare Part A and Part B and enroll in a Medicare Supplement insurance policy.

If you qualify for this trial right, you can choose any Medigap policy provided in your state and you will not have to undergo medical underwriting.

Can I switch from a Medigap plan to a Medicare Advantage plan?

If you cancelled a Medicare Supplement insurance policy to join a Medicare Advantage plan for the first time, but you are unhappy with the plan, you may be able to switch back to a Medicare Supplement insurance policy if it is within the first year.

To do this, you must disenroll from your Medicare Advantage plan, re-enroll in Original Medicare, and buy a Medicare Supplement insurance policy.

If you qualify for this trial right and apply within 63 days after leaving your Medicare Advantage plan, you will be able to make this transition without medical underwriting.

You also will have the right to buy the same Medicare Supplement insurance policy you had before you switched to a Medicare Advantage plan as long as your previous insurance company still sells it.

If not, you can enroll in Medicare Supplement insurance Plan A, B, C, F, K, or L that is available in your state.

Copyright © 2019 TZ Insurance Solutions LLC. All rights reserved.

1 MedicareAdvantage.com's internal analysis of CMS Medicare Advantage landscape source files, May 2018. Data retrieved from www.cms.gov/Medicare/Prescription-Drug-Coverage/PrescriptionDrugCovGenIn.

2 TZ Insurance Solutions LLC internal sales data, 2019. This data is based on the Medicare Supplement Insurance policies TZ Insurance Solutions LLC has sold. It is not a comprehensive national average of all available Medicare Supplement Insurance plan premiums.

The purpose of this communication is the solicitation of insurance. Contact will be made by an insurance agent/producer or insurance company.

This information is not a complete description of benefits. Contact the plan for more information. Limitations, copayments and restrictions may apply. Benefits, premiums and/or member cost-share may change on January 1 of each year.

MedicareAdvantage.com is a website owned and operated by TZ Insurance Solutions LLC. TZ Insurance Solutions LLC is a licensed and certified representative of A Medicare Advantage HMO, PPO and PFFS organization and a stand-alone prescription drug plan with a Medicare contract. Enrollment in any plan depends on contract renewal.

TZ Insurance Solutions LLC and the licensed sales agents that may call you are not connected with or endorsed by the U.S. Government or the federal Medicare program. This website does not contain a complete listing of plans available in your service area. For a complete listing please contact 1-800-MEDICARE (TTY users should call (877) 486-2048), 24 hours a day / 7 days a week or consult www.medicare.gov.

Not all plans or products are available in all markets. Additional plans may be available in your service area. For a complete listing please contact 1-800-MEDICARE (TTY users should call 1-877-486-2048), 24 hours a day/7 days a week or consult www.medicare.gov.

Medicare Supplement insurance is available to those age 65 and older enrolled in Medicare Parts A and B and in some states to those under age 65 eligible for Medicare due to disability or End Stage Renal disease.

Medicare Supplement insurance plans are not connected with or endorsed by the U.S. government or the federal Medicare program.

Last Updated: 09/12/2017 Accepted

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