Medicare Supplement vs. Medicare Advantage
It can be difficult enough just signing up for Medicare, understanding how it works and how do I cover the 20% Medicare doesn’t cover to the hospitals and physician services?
That’s where I step in to educate someone new to Medicare on the pros and cons of both.
Medicare Supplements are intended to cover the “gap” of what Medicare doesn’t cover. When you are new to Medicare you receive a card with both Part A (Hospital Coverage) and Part B (Medical Coverage). The government only covers 80% of these costs. As of 2020 the Federal Government charges each individual with a premium for the Part B of Medicare. Currently the premium is $144.60. Part A is the one we all have been paying into since the time we began working. So, Part A has already been covered (as long as you or your spouse have worked at least 40 quarters in the United States).
I represent many insurance companies, so during my consultation I recommend Medicare/Medigap Supplement insurance to those who frequent the doctor and specialist, have underlying health conditions or for those who can easily afford the premiums. In addition to the supplement, you have to purchase a “Stand Alone” prescription drug plan (Part D) to complete your health care coverage. All of these come with additional premiums. Besides a small deductible and the level of supplement you choose, this is full coverage health insurance.
Medicare Advantage Plans
In 2003 the Medicare Modernization Act went into force primarily because the “now” 65 year-old is more like the “55” year-old in health and physical being. This new option to Medicare was designed similar to an employer plan, HMO (Health Maintenance Organization) or PPO (Preferred Provider Organization) and introduced a few years later. This gave the “New to Medicare” another option when finding additional coverage to Medicare alone. So came the birth of the Medicare Advantage Plan or also referred to as Part C. The MA plans combine Part A, Part B and Part D (for the most part) for a Complete Medicare Plan. Most plans charge no premium or a low premium with co-pays, out-of-pocket maximum limits and drug deductibles on name brand medication. Some MA plans have embedded dental, vision and hearing aid coverage generally not found in the Medicare/Medigap Supplement Coverage.
So Medicare Supplements vs. Medicare Advantage?
Premiums or No Premiums?
Full Coverage or Pay As You Go?
Not So Healthy or For The Most Part Healthy?
When I meet with those new to Medicare, I sit down with them and share a Medicare 101 or a Medicare Supplement vs. Medicare Advantage chart and explanation just as I have done here and have them tell me which one of these options we will be proceeding with.
Also, the choices made are always reviewed and can be changed annually during October 15th through December 7th- Medicare Annual Enrollment Period.