Medicare Advantage vs. Medicare Supplement

Once you’re enrolled in Original Medicare (Parts A and B), you may choose a Medicare Advantage or a Medicare Supplement Insurance plan. These two options are not the same thing, and you cannot have both. But either option can provide you with additional healthcare coverage — giving you more benefits and lowering your out-of-pocket expenses — because Original Medicare is often not enough for most people.

What Are Medicare Advantage Plans?

Medicare Advantage (Part C) Plans are a type of Medicare health plan sold by a private company that contracts with Medicare. They provide all of your Part A (hospital) and Part B (medical) benefits. 

Medicare Advantage Plans include:

  • Health Maintenance Organizations (HMOs)
  • Preferred Provider Organizations (PPOs)
  • Private Fee-for-Service Plans (PFFS)
  • Special Needs Plans (SNP)
  • Medicare Medical Savings Account Plans (MSAs)

If you’ve joined a Medicare Advantage Plan:

  • Most Medicare services are covered through the plan
  • Medicare services aren’t paid for by the government
  • Services are typically provided within a preselected network of doctors and hospitals

Most Medicare Advantage Plans include prescription drug coverage.

What Are Medicare Supplement Plans?

Medicare Supplements are supplementary coverage options for those enrolled in Original Medicare who want to lower their out-of-pocket costs when they go to the doctor. They’re also called Medigap policies and are identified by plan letters A through N. Be careful not to confuse these plan letters for the Parts of Medicare.

With a Medicare Supplement insurance plan, you keep Original Medicare and your policy covers many, if not all, of the costs that the government doesn’t pay, such as:

  • Deductibles
  • Coinsurance
  • Excess charges  

Depending on which plan you choose, it may also provide emergency coverage if you’re traveling outside of the United States.

Medicare Supplements do not cover prescription drugs. You can join a stand-alone Part D plan after buying your supplement to get prescription drug coverage.

Medicare Advantage vs. Medigap Comparison
Which Option Is Right for You?

Your budget, lifestyle, and health are key considerations in which route you take. You’ve worked hard to get to Medicare and now you deserve to enjoy retirement and not worry about health insurance. You can always talk to a licensed professional like the ones at Southeast Insurance Group.

If your health is good, your annual expenses will be less than if you have a chronic condition or if you’re planning new knees or hips in the coming year.

Some plans have lower premiums but higher out-of-pocket costs (Medicare Advantage) while others have higher premiums but little to no out-of-pocket costs (Medicare Supplements). The lowest premium plan may not necessarily be the cheapest option for you over time.

The Bottom Line

A Medicare Supplement plan will likely give you more freedom of choice than Medicare Advantage, assuming your physician or facility accepts Medicare. Medigap is a better option for snowbirds and others who travel often or have homes in multiple locations.

Friendly Reminder

You can make changes to your Medicare Advantage plan every year. You may also switch to a different supplement insurance plan if you think you’re paying too much. Since your lifestyle or health can change, it’s important to review your coverage annually to make sure it’s still your best option. There could be a better plan in your area that offers fewer restrictions, more benefits, or both.

Before You Enroll

Before you enroll in a plan, always ask how much it will pay for each of the following:

  • Inpatient hospital care
  • Doctor and specialist office visits
  • Outpatient services and surgeries
  • Durable medical equipment
  • Medications
  • Medical coverage while away from home

Enrolling in the right Medicare plan is an important decision for you to make. Make time for FREE advice from an independently licensed professional and be rest assured that you’re well on your way to a great Medicare experience — and a happy retirement!