Medicare, a US-based health insurance program, aims to lower health bills by providing fee-for-service health insurance to people aged 65 and above. This extensive health insurance program consists of Medicare Original, Medicare Advantage, and Medicare Supplement.
Original Medicare comprises two parts, called Part A and Part B. These Medicare Parts cover inpatient and outpatient care, respectively. But Medicare Original doesn’t cover all health expenses.
Therefore, in some cases, you may have to purchase Medicare Supplement or Medicare Advantage from a private insurance company for additional benefits such as coverage for dental care and prescription drugs.
But before choosing the right Medicare plan, let us look into the primary differences between Medicare Advantage and Medicare Supplement.
Original Medicare | Medicare Part A and Part B
Before you choose a Medicare plan, it’s wise to decide what may work best for you. Original Medicare, consisting of Part A and Part B, covers hospital insurance.
Part A covers billing for private rooms, medications, drugs, and nursing facilities, while Part B provides healthcare insurance for outpatient care, home health services, preventive care services, access to medical equipment, etc.
Original Medicare is beneficial to people looking for flexibility of choice when it comes to picking a doctor or a hospital because Medicare private plans such as Part C only allow you to pick a hospital and a doctor within the plan’s network.
Medicare Advantage Plans | Medicare Part C
Besides Original Medicare, Medicare Advantage plans, also known as Part C, are private healthcare plans that cover Part A and Part B, along with Part D, which provide insurance for prescription drugs.
Medicare Advantage plans are offered by private health insurance companies that collaborate with Medicare but process your plans privately. Under this plan, you can choose a doctor and a hospital within the network of your choice.
Medicare Advantage Plan, which works as an all-in-one solution, offers numerous benefits, such as vision, hearing, and dental coverage.
This comprehensive healthcare insurance is suitable for older adults looking for bundled coverage for prescription medicines, hospital visits, medical billing, wellness programs, dental checkups, etc.
Plus, you’d be glad to know that Medicare Advantage plans 2024 often require no additional premium, making them a complete healthcare insurance solution.
Types of Medicare Advantage Plans
There are several types of Medicare Advantage plans, which allow seniors to easily choose a plan that suits them best. Here is a list of the most suitable programs the Medicare Advantage plan offers.
- Health Maintenance Organizations (HMOs)
- Preferred Provider Organizations (PPOs)
- Special Needs Plans (SNPs)
- Private Fee-For-Service Plans (PFFS)
- Medical Savings Accounts (MSAs)
Medicare Advantage Plan Cost
Medicare premium is the monthly cost of a Medicare Advantage plan. These plans have an estimated monthly cost of $18.5. However, the cost may fluctuate according to the plan you choose and the coverage it provides. Some additional services may cost up to $505.
To avoid higher costs, you should be well-informed about your enrollments. Since Medicare has a limited enrollment time, you should look into the enrollment period for an affordable plan of your choice.
Before you can access the Medicare Advantage plan, you should already be enrolled in Medicare Part B. Therefore, the premium that you pay for Medicare Advantage includes the cost of Part B, which is $174.70 per month, exclusive of your Advantage Plan.
Medicare Supplement | Medigap
Medicare supplement insurance, also called Medigap, is a secondary coverage plan offered by private companies. Its primary purpose is to provide additional health insurance for out-of-pocket costs that aren’t covered by Parts A and B. This means that Medigap only covers what isn’t covered by Part A and Part B.
For example, if you choose the Medicare Advantage plan, it works as an alternative to Part A and Part B with additional coverage for hearing, vision, and dental care.
But if you enroll in Medigap, you’ll only have insurance for what’s not covered by Original Medicare. Thus, it’s vital to have an Original Medicare plan with supplemental Medicare, as it is not a standalone insurance policy.
What Do Medicare Supplement Plans Cover?
Since Part A and Part B provide limited coverage, these plans cover the cost of out-of-pocket expenses. These include copayments, coinsurance, and deductibles.
Deductibles are expenses that you cover before Medicare provides coverage for health services. Thus, deductibles apply to all Medicare Parts.
A copayment is a fixed payment for a doctor’s visit or a prescription drug. This amount is paid only after you pay your deductibles, thus covering certain benefits.
Coinsurance is a cost-sharing method where you have to pay a percentage of the total amount for specific services after paying your deductibles. The rest of the cost is covered by your insurance plan.
Medicare Supplement Insurance Cost
Medicare supplement insurance plans have variable costs, as they depend on the carrier. Since these are secondary coverage plans, the policy prices are set individually by the insurance companies and significantly vary from carrier to carrier.
However, some factors influencing the cost of your supplemental plan are your location, marital status, lifestyle, and gender.
You can choose a Medigap policy from any private health insurance company that possesses a license in your state. However, individual policies and prices differ from state to state.
Choosing Between Medicare Advantage and Medicare Supplement
Choosing the right Medicare plan may seem daunting. However, considering a few vital factors can help you make an informed decision.
For example, before choosing a Medicare plan, you must evaluate your preferences, such as personal healthcare needs and budget.
While Medicare Advantage plans offer bundled coverage with Parts A and B, Medigap can help cover additional expenses, resulting in low upfront costs, border drug coverage, and low out-of-pocket spending.
Below is the comprehensive comparison to provide a high-level overview of the differences between Medicare (Part C) and Medicare Supplement (Medigap).
| Features | Medicare Advantage (Part C) | Medicare Supplement (Medigap) |
|---|---|---|
| Description | Bundled Medicare Part A and B are provided through private insurance companies. | Supplementary insurance that covers gaps in Original Medicare. |
| Premiums (cost) | Often includes premiums (some plans may have a $0 premium), deductibles, copays, and coinsurance. | Only monthly premiums, deductibles for Medicare Part B, copays, and coinsurance. |
| Coverage | Covers all Part A and Part B services. May include extra benefits like vision, dental, and prescription drugs. | Covers co-payments, coinsurance, and deductibles not covered by Original Medicare. |
| Prescription Drugs | Often included in the plan. | Prescription drug coverage must be obtained separately through Medicare Part D. |
| Enrollment Period | Can join or switch plans during specific times of the year. | Can be purchased any time after enrolling in Medicare Part B. |
| Eligibility | Must have Medicare Parts A and B. You cannot have both a Medicare Advantage plan and a Medigap policy. | Must have Medicare Parts A and B. Cannot be used with Medicare Advantage. |
Key Takeaway: Seek Better Insights With Silveredge
If you’re looking for an all-in-one substitute for original Medicare, this plan is an excellent choice.
Meanwhile, supplemental Medicare insurance policies can help fill the coverage gap. However, this standardized coverage has variable pricing with plans. For example, if you have a Medicare plan, you’d require Part D (drug coverage) separately.
In this situation, you must consult a licensed agent with industry expertise to guide you through the various types of Medicare plans.
With Silveredge specialized guidance, you or your loved ones can pick the best healthcare insurance policy for lower prices and more benefits. Engaging with our licensed agents can not only solve your health insurance queries but also enable you to make cost-efficient decisions!
