Understanding Medicare its rules, plans, and guidelines can become challenging. For example, what is a better option Medigap or Medicare Advantage?
Learning as much as possible about Medicare makes it easier to find the best coverage for your needs. Medical care and insurance coverage are not one size fits all. Fortunately, when it comes to Medicare, you have options.
Many people question what is Medigap and what is Medicare Advantage? Well, this article details these two types of plans and how they differ.
What is Medicare Advantage?
Medicare Advantage is an alternative to original Medicare. Before understanding what Medicare Advantage involves, it is helpful to learn a bit about Medicare in general.
Medicare is a federally funded health insurance plan for adults over the age of 65 and individuals younger with qualifying disabilities. Original Medicare Parts A and B cover inpatient medical care and outpatient services, such as doctor’s visits and certain diagnostic and preventative procedures.
Once someone becomes eligible for Medicare, they can enroll in Medicare coverage or opt for a Medicare Advantage plan.
A Medicare Advantage plan, also known as Medicare Part C, replaces original Medicare. Private health insurance companies sell Medicare Advantage plans. But the federal government sets rules for companies, and Advantage plans must follow. For instance, Medicare Advantage plans must cover at least what original Medicare Parts A and B cover. This coverage includes certain medical tests, doctor’s office visits, hospital stays, and home health services.
Different types of Medicare Advantage plans are available that also offer additional coverage, such as medications and vision services. Medicare Advantage plans differ in the following ways:
What is Medigap?
Medigap, also called Medicare Supplemental plans, is an optional plan purchased om a private insurance company. The Medigap coverage pays for the costs that original Medicare Parts A and B do not cover.
To purchase a plan, you must have Medicare Part A, and B. Individuals that buy Medigap pay a monthly premium along with whatever costs they pay for Medicare Parts A and B.
Plans may cover copayments, deductibles, and coinsurance that Medicare Part A or B does not cover. Individuals that buy Medigap pay a monthly premium along with whatever costs that pay for Medicare Parts A and B.
Medigap is not federally funded or run. But there are federal rules that insurance companies must follow. Medigap insurance companies can offer up to 10 different Medicare Supplemental plans. But each insurer does not have to offer all 10 plans. Some only offer a few Medigap plans.
The Medigap plans are labeled with a letter. Each plan offers different coverage. But due to Medicare regulations, every insurance company must include the same benefits in each individually lettered plan.
Examples of out-of-pocket costs Medigap plans may cover include:
- Foreign travel emergencies
How do Medigap and Medicare Advantage differ?
Medicare Advantage plans and Medigap plans are sold by private insurance companies. Both types of plans also help pay for medical costs. But Medicare and Medigap plans are not the same.
Medigap plans cover some of the costs that original Medicare does not pay. It is a supplemental type of plan used along with Medicare Parts A and B. Medicare Advantage replaces original Medicare Parts A and B.
Medigap is only usable when someone has original Medicare. Subscribers cannot use Medigap with a Medicare Advantage plan.
Which plan is right for you?
When trying to decide between a Medicare Advantage plan and a Medigap plan, there are several things to consider. The first step is to decide if you want to go with original Medicare or an Advantage plan.
Consider factors such as the following:
Who you want to get your main plan from: If you want your main medical coverage to be from the federal government, you may want to go with original Medicare and a Medigap plan to help with costs not covered by Part A and B. If you prefer a private insurer, you might opt for a Medicare Advantage plan.
Provider flexibility: Medicare Advantage plans typically require you to see an in-network provider. This may limit which doctors you can choose. If you select original Medicare with a Medigap plan, you can usually pick any doctor that accepts Medicare.
Travel: If you travel a lot, Medicare Advantage plans usually only cover costs outside your network in an emergency. Medicare Parts A and B cover costs from providers nationwide that accept Medicare.
Can you cover unexpected medical costs: Remember, with a Medicare Advantage plan you cannot also buy a Medigap plan. This means you will need to cover costs that your Medicare Advantage plan may not cover completely.