Medicare - What Is The Difference Between Medicare Supplement And Medicare Advantage Plans

One type of plan doesn’t fit everybody’s needs. A Medicare Supplement plan may be good for one person, but on the other hand a Medicare Advantage plan may fit better for somebody else. However you are not allowed have both a Medicare Supplement and Medicare Advantage plans at the same time.

Below I list some of the main differences between a Medicare Supplement versus a Medicare Advantage plan:

Medicare Supplement (Also known as Medigap):

  • With a Medicare Supplement plan, private insurance companies can cover all or part of your Medicare "out of pocket expenses," depending on which Medicare Supplement plan you choose.
  • If you choose a Medicare Supplement plan you will still be covered by Original Medicare. Medicare Supplement plans just compliment Original Medicare. So if Original Medicare doesn’t cover a procedure, neither will your Medicare Supplement plan.
  • New Medicare Supplement plans do not cover prescription drugs. (If you want prescription drug coverage, you will need to purchase an additional separate plan, known as Part D.)
  • You can go to any doctor in the U.S. as long as they take Medicare. (No Networks)
  • Along with that extra flexibility, there is generally more cost. Premiums can be much higher for a Medicare Supplement versus a Medicare Advantage plan and as I mentioned above if you want prescription drug coverage you will still need to purchase a Part D plan in addition to the Medicare Supplement premium.
  • Even within the Medicare Supplement plans, there are many Plans to choose from, identified by Letters. (These Medicare Supplement “Plan” letters are different from the Medicare “Part" Letters, such as Part A, B,C, and D.) So don’t get confused.
  • In Florida (and most states except Mass., Minn. and Wisc.) each Medicare Supplement plan letter has to be standardized from one insurance company to another. (For example, when shopping one insurance company plan against another, Medicare requires the plans to be standardized. So really the only main differences from one insurance company’s Medicare Supplement to another (with the same plan letter) will be the premium amount, and possibly any additional benefits on top of the standardized benefits. Also when comparing Medicare Supplement companies, keep in mind the percentage of their previous annual increases from one company to another, to get an approximate idea of possible future increase percentages. Also ask how is their customer service and ability to pay claims on time.

Medicare Advantage Plans (Also known as Part C):

  • Medicare Advantage comprises a variety of private health plans. Instead of still having Original Medicare, like with a Medicare Supplement, Medicare Advantage plans are administered thru private insurance companies. However every Medicare Advantage plan must cover all the same benefits, or more, than Original Medicare covers.
  • Medicare Advantage plans can be more restrictive than Medicare Supplement plans, but they generally have very low premiums and many even have zero premiums. 
  • Many Medicare Advantage plans can also include prescription drug coverage all in the same plan, at no additional premium cost.
  • Unlike Medicare Supplement Plans, most (but not all) Medicare Advantage plans have a network. 
  • With Medicare Advantage HMO plans you need to go to providers in-network or you are not covered, unless a true emergency. Also with many HMO plans you need to get a referral from your primary care physician to go to a specialist.
  • With Medicare Advantage PPO plans you have a little bit more flexibility and can go out of their network, but it will cost you more for the privilege.
  • With both Medicare Advantage HMO & PPO plans you can have copays, coinsurance, and deductibles that you may be responsible for. Be sure you understand each plan that you review carefully before choosing to enroll in one. 
  • Many (but not all) Medicare Advantage HMO & PPO plans include prescription drug coverage in the same plan at no additional premium. However there is a formulary (drug list) for each plan. If your prescription drug is not in the formulary, it is not covered.
  • Medicare Advantage HMO & PPO plans have an annual out-of-pocket maximum. This is kind of a safety net, so your medical expenses don’t exceed that amount in one year. It resets every year though. (Keep in mind that your prescription drug copays, coinsurance, and deductible are not included in that annual out-of-pocket maximum amount. Only your medical expenses are included.)
  • Medicare Advantage plans can also have additional benefits that Original Medicare does not. Each plan can be different, but some could include vision or dental benefits, etc.

Note: All this Medicare information can be overwhelming and confusing to many people. As an independent licensed agent I can explain all this to you in simple terms so you feel comfortable making a decision. Then I can help you choose and enroll in a plan that you feel fits your needs.

By the way, it doesn’t cost you any more if you enroll through me as an independent agent versus directly with an insurance company either over the phone or via the Internet. Since I get paid by the insurance companies for your enrollment. Plus you will have personalized service by a local agent. If you would like my assistance, please call me at 941-404-5334.

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