With Medicare’s Annual Enrollment Period in full swing, it is more important than ever to understand your options. Read on to learn about Medicare Advantage versus Medigap and how to choose the best option for you.
Medicare Advantage Plan Definition
Also known as Medicare Part C, Medicare Advantage (MA) is the comprehensive alternative to Original Medicare. Medicare-approved insurance companies sell these plans to Medicare-eligible patients. These plans may have monthly premiums or may require you to cover copays and coinsurance fees.
What is Original Medicare?
Unlike MA plans, Original Medicare (OM) plans are facilitated by the federal government, not private insurance companies. OM plans cover both Medicare Part A and Part B, which covers hospital and medical costs like hospital visits, hospice care, certain doctors’ visits and more.
What does Medicare Advantage cover?
MA plans cover many services. These “bundled” plans include both Medicare Part A (hospital care) and Medicare Part B (outpatient care). More often than not, these plans also include prescription drug coverage. MA plans may also cover:
- Adult day care
- Home health aides
- Home safety equipment
- Increased telehealth access
- Meal delivery
- Ride-share coverage
- Respite care for caregivers
What is a Medicare Replacement Plan?
Medicare replacement plans are the same as MA plans. However, it is important to note that Medicare replacement plans do not replace Medicare. It is simply another way of referring to plans like MA, which are offered through private/independent insurance companies to cover additional benefits.
How Does a Medicare Advantage Plan Work?
Medicare Advantage vs. Medicare
MA plans are offered and sold by private insurance companies, while Medicare is federal health insurance that is offered by the government for those 65 or older.* By law, Medicare Advantage plans must cover everything that Medicare covers. However, Medicare Advantage can offer additional benefits, such as SilverSneakers. At Iora, we offer SilverSneakers classes as well as other classes on fitness or health related topics. If you’re interested in receiving a class calendar, find a practice closest to you and we’ll be happy to send you one!
*Certain people with disabilities and people with ESRD may also qualify.
Medicare Advantage vs. Medigap
Medigap plans are offered by private insurance companies and can help with some costs that Original Medicare doesn’t cover. These plans are often referred to as Plan F, Plan G, or another letter. Unlike MA plans, Medigap plans help pay for some costs and benefits that OM cannot cover. However, MA plans cover a much wider range of medical services. Medigap policies have varying degrees of coverage depending on which of the numerous plans you choose.
What are the Advantages and Disadvantages of Medicare Advantage?
Medicare Advantage has several advantages from low-cost plans to prescription drug coverage. They also can have copays (also called a copayment) that is a flat fee for a healthcare service or prescription drug that is predetermined by a member’s health insurance plan, but these generally tend to be lower total out of pocket cost than a monthly premium for a supplement or Medigap plan. Coinsurance fees are similar, but the main difference is that coinsurance is a percentage of the health service or drug cost paid by a member after reaching their deductible.
Like anything however, MA plans also have disadvantages that may impact what is right for you.
MA plans cover a large amount of benefits including Medicare Parts A and B and additional benefits like home health aides and rides to doctor’s appointments. Below are some pros and cons of MA plans:
|MA Plan PROS||
MA Plan CONS
|Out-of-pocket maximum is $6700 a year.||Requires you to pay copays and coinsurance fees.|
|Many plans cost $0 a month||Plans are difficult to compare since no two are alike.|
|Usually include prescription drug coverage.||MA plans cannot be used in different states.|
|Most include hearing and dental coverage.||Mostly HMO plans that require referrals to see specialists.|
|May include gym discounts.||Can change drug and medical coverage every year.|
|Can switch to another MA plan during open enrollment.||Harder to switch certain plans like Medigap.|
When considering an MA plan versus a Medigap plan, you should think about your current lifestyle and health goals.
When Do I Sign Up For Medicare Advantage?
If you have already signed up for and have Medicare coverage, you can then sign up for a Medicare Advantage plan during the Annual Enrollment Period. Medicare’s Annual Enrollment period begins October 15 and runs through December 7 every year, with coverage for your selected plan beginning on January 1. For more information on Medicare, Medicare Advantage and Annual Enrollment, check out our Medicare & Health Insurance resource page.
Annual Enrollment period can be a confusing time. There are many different plans to choose from, which is why we recommend sitting down with an insurance representative or agent to help choose the plan that best suits your lifestyle. At Iora, we can recommend agents that our patients know and trust. We would be happy to refer you to someone if you have insurance questions, and if you are interested in learning more or attending an educational seminar, reach out and we’ll give you a call.