Medicare supplement plans and Medicare Advantage plans are options for people with Medicare. They may offer some additional benefits. But the two types of plans work very differently, and they don’t work at the same time.
Medicare Supplement plans, also called Medigap, can only be used if a person sign-up in Original Medicare, which is Part A (hospitalization) and Part B (outpatient care and doctor). This program is not run by the government but by private insurance companies. People can buy traditional Medicare to cover some of their out-of-pocket expenses.
What are Medicare Supplement Plans?
Medicare Supplement is also known as Medigap. It covers the part which Original Medicare does not cover. For example, these plans don’t cover the portion such as hearing, at-home care, vision and long-term care. However, they are helpful for certain types of coverage, for example, health insurance during travel or frequent emergency care.
Medicare Supplement plans cover Part B’s 20% coinsurance that a person would pay for clinic visits and other outpatient services. In addition, they cover daily coinsurance of $389 for 61 to 90 days in the hospital for every benefit period, $778 for up to 60 lifetime reserve days, and the cost of the hospital up to 365 lifetime days after the use of Medicare benefits.
Most Medigap plans have a Medicare part A hospital deductible, which is $1,556 per benefit period in 2022. Some plans cover the cost of an emergency during the travel, coinsurance for skilled nursing facilities and hospice care
Medigap does not cover a prescription drug, and this supplement is not combined with Medical Advantage. Although, these plans are a way to cover Medicare in a specific situation while covering more significant expenses.
What is Medicare Advantage?
Medicare Advantages are provided by private health insurance. It often includes Medicare Part D or prescription drug coverage. In addition, they cover dental, home health, disability service, vision, and other health care needs.
The medical Advantage plan provides the convenience by offering all of these services in one plan. However, the coverage details and costs rely on the plan of the insurance company and the state you live in.
There are a few most common Medicare Advantages plans.
- PPOs ( preferred Provider organizations)
- private fee-for-service (PFFS) plans
- HMOs ( Health Maintenance organizations)
- Medical savings Account (MSA) plans
- Special needs Plans (SNPs)
Patients of Medicare Advantage don’t need any referrals to meet a specialist; providers have a few conditions or limitations.
Which one is better?
Medicare Advantage plans (part C) are an alternative to original Medicare plans (Part A and B). On the other hand, Medicare Supplement plans help fill the gaps in Original Medicare.
Private insurance companies provide Medicare Advantage and Medicare Supplement plans (Medigap). Remember one thing; a person can’t purchase both a Medigap plan and an Advantage plan at the same time. However, some terms may be helpful to understand while choosing the best plan:
- Deductible: It is a yearly amount that a person can spend out of savings within a specific time before the insurance starts to fund his treatment.
- Copayment: It is a fixed amount that an insured pays while getting specific treatments. Medicare generally applies to prescription drugs.
- Coinsurance: A total cost percentage that an insurer will need to self-fund. This comes to 20% for Medicare Part B.
Some benefits of Medicare Advantage Include:
- It includes more benefits and coverage, and it provides services such as disability equipment, long-term care and gym membership
- All plans include one which covers Medicare Part A, B and D
- Lower premiums
Some benefits of Medigap plans include:
- Less out-of-pocket expenses
- Available to all providers that accept Medicare
- Coverage while travelling abroad
How do you select which one is right for you?
In the case of catastrophic disease and injuries, ensure that you have sufficient coverage to limit financial liability. The costly plans have better outcomes and benefits. High-cost plans save people in terms of out-of-pocket fees in the long run.
What are the costs of the Medicare Advantage plan?
A person who buys a Medicare Advantage plan has to pay the monthly premium of the plan and part B of the Medicare premium, which is $144.60
One can check their plan to find out the monthly premium and how much they will pay for coinsurance, deductible and Copays.
The cost of Medigap plans
Medigap premiums are paid to the insurance company which provides the plan, but an individual will also pay the premiums for the original Medicare. Private insurance companies can set the amount so that premiums are different. However, there are three limits on how the price is determined that affect the cost of the premium as long as an individual has the plan.
The limits are:
- An individual will pay extra as they get older according to an attained age-related policy
- When one gets a policy based on the limit belonging to the community, the premium is unchanged, and a person can’t change it and is not affected by age of a person. However, due to inflation or similar reasons, it is the only time when a premium can change.
- The cost of an issue-age-related plan is based on the age of the person who buys the plan and can’t be increased with the person’s age.
Some insurance companies may offer discounts for online payments or healthful living. The company which offers the policy determines all such policy details.
Wrap up
When considering purchasing a Medigap policy or enrolling in a Medicare Advantage plan, the important decision is whether you want to get coverage from the federal government through a private insurance company or Original Medicare, which offers a Medicare Advantage plan. If you select Medicare advantage, the monthly Part B premiums can be plus or minus.
But the additional expenses you pay from your savings will probably be different, especially when using more medical services. When choosing original Medicare, people can use any facility that Medicare accepts. One condition is that people have to purchase separate Medigap and Part D drug coverage to fill the gap.
.
