In our Free guide of the top 5 mistakes people make on Medicare, the #3 biggest mistake people make on Medicare is not knowing the difference between Medicare Advantage and Medicare Supplement plans.
We wanted to take some time to expand on this topic since this is an important time of the year: the Medicare Advantage Dis-enrollment Period from January 1 thru February 14. This is an opportunity for people to switch from a Medicare Advantage Plan to a Medicare Supplement.
What are the differences?
There are significant differences between Medicare Advantage Plans and Medicare Supplements.
Relationship to Medicare Parts A & B
Medicare Advantage replaces Part A & Part B of Medicare. The individual on Medicare Advantage is still responsible for the Part B premium to the government, but the Part A and Part B benefits are no longer provided by the government with a Medicare Advantage Plan. With original Medicare + Medigap Plan, the Medigap Plan is just supplementing original Medicare; so Part A & B are still being provided by the government.
Private Network Required?
Medicare Advantage Plans are HMO plans that require an individual to use a private network of doctors/hospitals. Original Medicare does not require a private network - you can go to any doctor/hospital in the country that accepts Medicare (about 90% of doctors and 98% of hospitals).
With most Medicare Advantage plans, referrals are required to see specialists (e.g. Chiropractor, Podiastrist, etc.) . Original Medicare does not require referrals. You can just call up a specialist and schedule an appointment.
Part D included?
With most Medicare Advantage plans, the Part D drug coverage is included in the plan. A Medicare supplement does not include a Part D drug card. An individual can shop for the best Part D drug card (generally 20-30 available in each state).
In most cases, Medicare Advantage plans have lower monthly premiums when compared to Medicare Supplements, but...
...Maximum Out-of-Pocket Costs
Medicare Advantage plans have maximum out-of-pocket expenses up to $6,700/year. Medicare Supplements limit medical out-of-pocket expenses significantly. Plan G is our most popular Supplement right now, which only has about $166 annual out of pocket expense for medical expenses.
Medicare Advantage plans change every year and have to be reviewed during open enrollment each year (October 15 - December 7). Medicare Supplements are federally regulated coverage that will never change, and they are guaranteed renewable for life.
Good Morning America - Medicare Advantage Clip
I recommend watching this 7-minute video to gain a sense of some of the experiences individuals could have with Medicare Advantage Plans.
Call us Now (1-908-272-1970) if you have any Medicare questions or if you want to get latest quotes on Supplements to see if you can save some money!
See bio here