The purpose of this post is to make some sense of selecting your health coverage. It’s not meant to be an all-inclusive discussion with countless facts and figures. Links to resources are provided, so be sure to check them out as well.
Medicare Advantage vs. Medicare Supplement
Medicare Advantage and Medicare Supplement (Medigap) plans have different program designs. When you buy a Medicare Supplement plan, you are still enrolled in Original Medicare. Medicare pays the majority of your healthcare bills while the private insurance simply covers the extra copayments and deductibles.
When you enroll in a Medicare Advantage plan, you move completely into a private health insurance plan. That means your insurance company covers all your healthcare bills. Insurance companies must provide the same level of coverage as Original Medicare with their Medicare Advantage plans, with the exception of hospice care. The end result of the two programs is about the same; they just go through a different setup.CONSUMER REPORTS has compiled a very simple but thorough, side-by-side comparison of MA and Medigap.
In regard to out-of-pocket expenses, some plans may charge yearly deductibles while others may not, many plans do charge copayments for certain benefits and services, and Medicare Advantage plans have the right to set their own coinsurance percentages and terms.
Medicare Advantage Coverage
To be eligible to enroll in a Medicare Advantage plan, you must be enrolled in both Medicare Part A and Part B. In addition to paying your Part B premium, you may also be responsible for paying a Medicare Advantage premium. Some MA plans have $0 premiums while others may have high monthly premiums, so it is best to compare available plans in your area to find one with the monthly premium to fit your budget.
Medicare Supplement (Medigap) Coverage
Medicare Supplement plans each offer different levels of coverage, but each lettered plan must include the same standardized benefits regardless of carrier and location. So, a Plan F offered by Humana provides the same coverage as a Plan F offered by Mutual of Omaha. APPLES-TO-APPLES. Claims are handled the same way by all carriers. The only difference will be the monthly premium.
Medicare Supplement plans do not cover vision, dental, long-term care, or hearing aids, but all plans do provide basic benefits.
Medicare Supplement (Medigap) Plan Enrollment and EligibilityTo be eligible to enroll in a Medicare Supplement plan, you must be enrolled in both Medicare Part A and Part B. The best time to enroll in a plan is during the Medigap Open Enrollment Period, which begins on the first day of the month that you are both age 65 or older and enrolled in Part B, and lasts for six months. During this period, you have the guaranteed issue right to join any plan of your choice, meaning that you may not be denied coverage based on any pre-existing conditions. If you miss this enrollment period and attempt to enroll in the future, you may be denied coverage based on your medical history.
The Medicare website is still a good resource to get answers.
5 Good Reasons to Have A Medicare Supplement (Medigap) Plan:
Low Out-of-Pocket Costs - A Plan F will provide “first dollar” coverage. When you shop for a plan, compare the coverage and premiums of a Plan F with a Plan G and N. These 3 plans are the most comprehensive and most popular.
Choose Your Doctors and Hospitals - An MA plan doesn’t always give you the freedom to do so.
Coverage Is Guaranteed Renewable - A Medigap plan can’t be cancelled. An MA plan may change or not be renewed which means you are forced to find other coverage.
Providers Accept Patients with Medigap Insurance - There is no in network or out of network unlike an MA plan. Talk with your doctors about their relation with a health plan before joining.
Your Coverage Goes With You - Do you like to travel? A Medigap plan provides the same coverage wherever you may be.
Shopping A Plan - Don't Guess
It can be time-consuming to compare all plans available to you in your area. Many people try to do their homework, get frustrated, and then "give up and guess". Choosing your health insurance coverage is no longer a one-time decision for most Medicare beneficiaries. Think about your health insurance needs:
Has your health changed in the last year?
Is your current plan still meeting all of your health coverage needs?
How much have you paid in out-of-pocket costs in the last year - and for what? Is your plan changing and how will that affect out-of-pocket costs?
You should shop for a new Medigap plan every year. Don’t wait for the “magic” annual enrollment period of October 15 to December 7. That only applies to MA plans. If you’ve seen your premiums increase recently, get a quote on a new Medigap coverage plan. You may be able to save money, or get better coverage, than you have now. Ask about the difference in coverage and premium between a Plan F and Plan G. Also ask if you also qualify for a discount.
