As a Medicare beneficiary, you have four essential options for your health insurance coverage:
In this article, we compare Medicare Supplement Insurance and the Medicare Advantage program to help you better understand the difference between each type of insurance and to help you decide which option makes the most sense for your health insurance considerations.
In order to understand the differences between Medicare Advantage and Medicare Supplement Insurance, it may help to familiarize yourself with the basics of each type of coverage.
So what’s the key difference between these two types of insurance?
In short, if you’re satisfied with the benefits offered by Original Medicare but want some help paying for your out-of-pocket Medicare costs, a Medicare Supplement Insurance plan might be something for you to consider. If you aren’t completely satisfied with your Original Medicare coverage and would like to find a health insurance plan with some additional coverage, you may want to consider a Medicare Advantage plan.
It’s important to note that you cannot enroll in both a Medigap plan and a Medicare Advantage plan simultaneously.
Now that we’ve highlighted some of the main differences between these types of insurance, let’s compare five additional features of each type of plan: cost, availability, eligibility, enrollment opportunities and popularity.
Because Medicare Advantage plans and Medigap plans are sold by private insurance companies — and because some plans offer more benefits than others — plan costs can vary greatly from one plan and one service area to another.
The average cost of a Medicare Advantage plan that offers prescription drug coverage in 2019 will be $40 per month.1 Some Medicare Advantage plans offer a $0 monthly premium. $0 payment premium plans may not be available in all areas.
To compare Medicare Advantage plan costs in your area, you can request a quote comparison with no obligation to enroll, or you can call a licensed insurance agent at TTY Users: 711, 24 hours a day, 7 days a week.
When comparing Medicare Advantage and Medicare Supplement Insurance, you may want to consider the availability of each type of plan where you live.
In 2019, there will be a total of 2,734 different Medicare Advantage plans available nationwide.1 The Medicare Advantage plans available to you will depend on where you live, so be sure to check with a licensed insurance agent to learn more about your options.
In contrast, there are 10 standardized Medicare Supplement Insurance plans to choose from in most states, though not all 10 are made available in every state.
In terms of eligibility, anyone who is over the age of 65 and who is eligible for and enrolled in Original Medicare is also qualified to apply for either a Medicare Advantage or Medicare Supplement Insurance plan.
One key difference is for people under the age of 65. If you are under 65 but qualify for Medicare because of a disability, you may still qualify for a Medicare Advantage plan. (The primary exception is End-Stage Renal Disease, which usually requires enrollment in a special type of Medicare Advantage plan called a Special Needs Plan.)
Federal law does not require insurance companies to provide Medigap plans for people under 65, and only 30 states have laws that mandate this extension of coverage availability. Your ability to apply for Medicare Supplement Insurance under the age of 65 will depend largely on where you live.
Medicare Advantage plans and Medicare Supplement Insurance plans also have different respective enrollment opportunities. Here are some of the enrollment periods you should be aware of:
Medicare Advantage plans are guaranteed issue, which means there is no medical underwriting involved. Having a pre-existing condition will not affect your ability to enroll in a Medicare Advantage plan or lead to higher plan premiums (unless you have End Stage Renal Disease, in which case you will want to consider finding a Medicare Advantage plan that is designed specifically for that condition).
As of December 2016, 13.1 million Medicare beneficiaries are enrolled in a Medigap plan.2
In 2018, the number of Medicare beneficiaries enrolled in a Medicare Advantage plan rose to more than 20 million people, which is approximately 34 percent of all Medicare beneficiaries.1
Use the chart below to quickly and easily compare some of the key features that can differentiate Medicare Supplement Insurance plans vs. Medicare Advantage plans.
|Medicare Advantage||Medicare Supplement Insurance|
|Availability||2,734 different plans available nationwide in 20171||10 standardized plans available in most states, though all 10 may not be available to you in every state|
|Eligibility||Available to beneficiaries enrolled in Original Medicare who live in the plan’s service area||More widely available to people over age 65 in some states, though younger people can be eligible to apply for a plan depending on where they live|
|Enrollment||Initial Enrollment Period, Medicare Annual Election Period and Special Enrollment Periods. No medical underwriting required||
Enrollment is year-round, but enrolling during your Medigap Open Enrollment Period or during a period when you qualify for a guaranteed issue right can be beneficial
Medical underwriting may be utilized if not applying for a policy during your Medigap Open Enrollment period or when you have a guaranteed issue right
|Popularity||Over 20 million Medicare beneficiaries (34%) in 20181||13.1 million Medicare beneficiaries in December 20162|
|Coverage of Medicare out-of-pocket costs||No coverage of Original Medicare out-of-pocket costs, but MA plan out-of-pocket costs may be more affordable than what Original Medicare includes||Coverage for Medicare Part A and B deductibles, copayments and coinsurance (depending on the plan)|
|Additional health benefits not found in Original Medicare||Can offer additional benefits, such as dental, vision, hearing and prescription drug coverage, among other benefits||No additional benefits to what Medicare offers, except for qualified emergency care received outside of the U.S.|
To learn more about Medicare Advantage plans and to find out about the plan options where you live, callTTY Users: 711 24 hours a day, 7 days a week, to speak to a licensed insurance agent.
1 Kaiser Family Foundation. Medicare Advantage 2019 Spotlight: First Look. (Oct. 16, 2018.) Retrieved from www.kff.org/report-section/medicare-advantage-2019-spotlight-first-look-data-note.
2 AHIP Center for Policy and Research. State of Medigap 2018: Trends in Enrollment and Demographics. (June 2018). Retrieved from www.ahip.org/wp-content/uploads/2018/06/State_of_Medigap18_FINAL.pdf.
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MedicareAdvantage.com is a website owned and operated by TZ Insurance Solutions LLC. TZ Insurance Solutions LLC and TruBridge, Inc. represent Medicare Advantage Organizations and Prescription Drug Plans having Medicare contracts; enrollment in any plan depends upon contract renewal.
Plan availability varies by region and state. For a complete list of available plans, 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 has neither reviewed nor endorsed this information.