How Does Medigap Insurance Compare To Medicare Advantage Plans?

When you're ready to retire, you're most likely not expecting to have to run the Medicare gauntlet, but that's what Medicare's choices can begin to feel like. With 10 types of Medicare Supplement Insurance and an unspecified number of Medicare Advantage Plans, comparing the benefits and cost can discourage even hardened bargain seekers. For the novice, just figuring out what traditional Medicare covers is time consuming and confusing. Before you throw up hands and surrender, here are a few tips to help make sense of the Medicare system.

Medicare Supplement Insurance Adds To Medicare Benefits

Medigap plans were created to fill in the gaps of the Original Medicare. Ten different Medigap policies let you pick and choose which Medicare out-of-pocket costs you want help with, such as co-payments, co-insurance and the Part A and Part B deductibles. When you have Medicare Part B, it pays 80 percent of a pre-approved amount for doctor services, supplies and procedures. Certain of the Medicare Supplement Insurance plans take care of the 20 percent that you're responsible for and some Medigap options can do even more.

You're probably aware that not all doctors accept Medicare's payment rates. You can use Medicare Supplement Plans to take care of what's known in the industry as excess charges. That's when a doctor charges you $1,000 for something and Medicare will only pay for 80 percent of $800 on that particular bill. The most comprehensive Medigap policies, like Medigap Plan F, can cover both the 20 percent and the excess so you have no out-of-pocket costs.

Regardless of which Medigap plan you prefer, they are all standardized to ensure the same benefits are available through every plan with the same letter designation. That key because it allows you to buy a Medigap Plan G, for example, from which ever insurer offers it at the lowest rate. In addition to insurance companies charging different rates for the same plan, the plans themselves are divided into more and less comprehensive (expensive) options.

There are 10 options (Plans A-N) and, as you'd expect, Medigap Plan A is just the beginning. It offers limited basic benefits, and Plans F and G provide the most comprehensive coverage. With any of these Medicare Supplemental Insurance plans, you can seek health care from any physician that accepts Medicare.

Medicare Advantage Plans Replace Medicare With Coverage From Private Insurers

Medicare Advantage Plans are sometimes called MA Plans or even Medicare Part C. Unlike Medigap Insurance, MA Plans replace all of your Original Medicare coverage with similar benefits through private insurance companies. Certain Medicare Advantage Plans augment Original Medicare with additional coverage to get glasses or hearing aids. These plans also provide coverage for prescription drugs, but in a limited form. You can't assume that your specific medicine is covered because each plan has different rules about drug coverage.

A downside to Medicare Advantage Plans is that they have limited provider networks. If you need a specialist that your plan doesn't cover, you won't have Original Medicare to fall back on for even partial benefits. However, there's also an upside. In some parts of the country, Medicare Advantage Plans are surprisingly inexpensive.

The "best" Medicare Supplement plan is the one that has coverage for the health care you're likely to need while still charging a low rate. Before you try to compare your options, take a look at what kinds of medical care you've needed the past couple of years. Has your health changed recently or can you expect to require about the same level of care? Once you are clear on what you need, it's time to start investigating your choices.

One thing to keep in mind is that your best chance to get the lowest rates on Medigap Plans is during the first six months after you turn 65, as long as you're enrolled in Medicare Part B. At that time, insurance companies won't question your medical records so they can't up your rate in response to any prior health problems.


------

By Wiley Long - President, MedigapAdvisors.com - The nation's leading independent agency specializing in Medigap Plans. Let our MediGap advisors show you how you can save money and get the best Medicare Supplement Insurance plan for your needs.