Choosing the best type of plan for yourself can be stressful. It’s especially difficult because you only have a limited initial enrollment window and many beneficiaries are concerned about choosing the wrong plan for them.
The type of plan you initially choose can make or break your future with Medicare. With that said, you’ll want to learn the characteristics of each type of plan. That way you’ll know you’re making the best choice for yourself and your individual needs.
Structure of Medicare Supplements vs Medicare Advantage Plans
While both plan types provide additional coverage to help you pay for the gaps in Medicare, each plan type is structured differently.
Networks vs No-Networks
One of the biggest differences between Medicare Supplements vs Medicare Advantage plans are that Advantage plans have networks. If you enroll in a Part C Advantage plan, you’ll want to check the network directory ahead of time to make sure it includes your favorite doctors and hospitals. Treating outside the network is not allowed on some Advantage plans unless there is a medical emergency.
In addition to having to stay within network with Medicare Advantage plans, some HMO-style Medicare Advantage plans require you to get a referral to see a specialist. These two characteristics may not bother you, but for someone that is used to being able to choose which doctor they see and when they see them, it can be a deal breaker.
People who enjoy more freedom of access can opt for a Medicare Supplement. These plans lets you treat with any Medicare provider nationwide, and there are no referrals required.
How Each Plan Works with Original Medicare
Another big difference between Medicare Supplements vs Medicare Advantage plans is how each one works with Original Medicare.
When you choose a Medicare Advantage plan, you agree to let your private insurance carrier take over your Original Medicare coverage. This means the insurance company will pay for your medical care instead of Original Medicare itself.
However, Medicare Advantage plans must at a minimum have at least equal coverage to Original Medicare. They can add benefits, but they can’t take benefits away.
For example, with Original Medicare, if you were to be admitted into the hospital for one day, you’d have to pay the Part A deductible which in 2019 will be $1,364. If you had a Medicare Advantage plan, you could potentially not have a deductible and only have to pay a copay. Each Medicare Advantage plan determines what to charge for various medical services. You can find these copays listed in the plan’s Summary of Benefits.
Medicare Supplement plans on the other hand work alongside your Original Medicare benefits. They help you pay for cost-sharing items such as deductibles, copays, and coinsurances. For example, if you were to enroll in Medicare Supplement Plan G, the plan would pay for all of your cost-sharing except the Part B deductible.
Medicare pays first, then the Supplement pays its share next.
Premiums for Medicare Supplements vs Medicare Advantage Plans
Let’s talk money. Of course, nothing is free in this world; somebody has to pay for it. When you enroll in a Medicare Advantage plan, Medicare gives the carrier an agreed amount of money to cover your health care each month.
Because of this, some Medicare Advantage plans offer a $0/month premium to you. Still, it isn’t free. Medicare paid the plan to deliver your care, and you’ll eventually pay copays and coinsurances for health services as you go along.
Alternatively, Medicare Supplement plans always have a monthly premium you must pay upfront for the coverage. However, there are less copays on the back end.
No matter which type of plan you choose, you still have to pay your Part B monthly premium in addition to your plan’s premium.
Another cost that you need to keep in mind is your Part D plan’s premium. With Medicare Advantage plans, you usually forgo paying a Part D monthly premium because most plans have a Part D plan included.
If you choose to go with a Medicare Supplement plan, you’ll need to enroll in a separate Part D plan. Medicare Supplement plans do not cover outpatient prescription drugs.
Enrollment into Medicare Supplements vs Medicare Advantage Plans
When you first enroll in Medicare Parts A and B, you have a one-time window to choose any Medicare Supplement you want. There is no health questions during this window and the carrier must issue the coverage.
If you miss this window, then in most states you’ll need to apply for coverage, answer health questions and go through medical underwriting. The carrier can decline you for coverage if they feel your medical history indicates too much of a health risk.
The fortunate thing about Medicare Advantage plans is that there is only one health question you must answer when applying. If you can answer no to “Do you have End Stage Renal Disease?” then you’re eligible. You can enroll in a Medicare Advantage plan during your Initial Enrollment Period for Medicare. If you miss that window, then there is an annual election period once per year thereafter during which you can enroll.
How to Choose A Plan
Once you have chosen the type of plan you want, Medicare Supplement vs Medicare Advantage, you have one more decision to make. You’ll need to decide which plan/carrier you want.
Luckily, Medicare Supplement plans don’t change from carrier to carrier. This means that no matter which carrier you sign with, Plan G is Plan G – coverage doesn’t change. The things you’ll want to review before choosing a carrier is the premium and the carrier’s rate increase history.
Medicare Advantage plans have a few more things that you’ll need to consider before making your final choice. You’ll need to review the plan’s specifications such as copays, deductibles, and drug formulary. You’ll also want to verify your doctors are in the network.
In the end, if you want a Medicare Supplement plan but can’t afford it, you should at least get a Medicare Advantage plan. We say this because Medicare Advantage plans have an out-of-pocket spending cap to protect you whereas Original Medicare does not. This way you will be better protected from spending an absurd amount of money if you have a year in the future with a lot of medical usage.
Speak with one of our experts here today to learn more about the plan options in your area.