Medicare Advantage Vs Medicare Supplements

There are two main types of insurance for people on Medicare; Medicare Supplements & Medicare Advantage. If you are reading this, you may be curious or thinking seriously about changing from a Medicare Supplement to Medicare Advantage. Who can blame you. Medicare Advantage is widely promoted and becoming more popular. The reality, however, is often different than what’s advertised. It’s not that Medicare Advantage plans can’t be a good option. It’s more a matter of knowing the facts, weighing the pros & cons, and deciding what’s right for you. With that in mind, let’s dive a little deeper into those issues.

Between Medicare Supplements and Medicare Advantage, you can only have one or the other

What Is Medicare Advantage?

Medicare Advantage is when you receive all of your Medicare benefits through a private insurance carrier. Medicare Advantage plans do not supplement Medicare, they replace it and include all of your benefits in one plan. Medicare Advantage include doctor & hospital coverage, and will typically include extra benefits. These extra benefits can include; Prescription, dental, vision, hearing aids, and others. In many cases you can get these extra benefits for little or no extra monthly cost to what you pay for Medicare A & B. This is the main appeal of Medicare Advantage. Let’s take a closer look by examining the pros & cons.

Pros

  • You get medical coverage plus extra health benefits like prescription, dental, vision, hearing aid, and health club.
  • You can typically get your plan for just the cost of Medicare A & B with little or no extra premium.
  • All benefits are provided in one plan through a private insurance carrier.

Cons

  • For more expensive types of medical care like hospital stays or extensive treatment, you could end up paying more out of pocket.
  • Plans usually have doctor & hospital networks and some plans may require referrals to see specialist doctors. You will want to verify whether your doctors / providers are in the plans you are considering.

What Are Medicare Supplements?

Medicare Supplements are insurance policies that are secondary to Traditional Medicare A & B and are provided by private insurers. Medicare Supplements enhance your coverage by helping you pay for medical deductibles and coinsurance, which helps keep your out of pocket costs very low each year. Even if you aren’t using medical care very often right now, it can benefit you with the peace of mind knowing that if something happens, your costs will be very low. Let’s take a look at the pros & cons of Medicare Supplements.

Pros

  • For the most popular plans you have very low (sometimes none) out of pocket medical cost liability. The most popular plans include F, G, and N.
  • There are no networks of doctors & hospitals or referrals required. You can choose to see any medical provider without the concern of in or out of network.

Cons

  • You pay a monthly cost that is in addition to what you pay for Medicare A & B, which some people cannot or do not want to pay. The monthly cost is most often more than Medicare Advantage.
  • Medicare Supplements generally only provide medical coverage. So, for pharmacy, dental, vision, and others; You need to buy separate plans.

Medicare Supplement & Medicare Advantage Comparison Snapshot

Here is a side by side comparison of the general features & benefits of these two main types of coverage.

Medicare Supplement & Medicare Advantage General Features Comparison
Medicare SupplementsMedicare Advantage
Medical CoverageFor the most popular plans you have very low, or no, out of pocket costs annually for medical care.You typically have copays for medical care. The basic stuff has lower copays, however, things like hospital stays or certain treatment may cost you more.
Monthly CostYou pay an additional monthly premium over and above what you pay for Medicare A & B. Premiums vary based on the plan and other attributes but are generally over $100 a month.You pay $0 or little extra than what you pay monthly for Medicare A & B. Medicare Advantage are typically less expensive monthly than Medicare Supplements.
Doctor & Hospital Choice
There are no networks. You can see any doctor or hospital who accepts Traditional Medicare.There are doctor & hospital networks. You will just need to verify your doctors & hospitals are covered or be flexible. Many doctors & hospitals accept Medicare Advantage.
Prescription Pharmacy BenefitsYou need to buy a separate plan for pharmacy benefits.Pharmacy benefits are often included.
Dental, Vision, Hearing Aid, & Gym BenefitsNot included with Medicare Supplements. Some or all of these benefits may be purchased through a separate policy.Some or all of these benefits are often included with Medicare Advantage. The levels of coverage and benefits vary based on individual plans and your service area.
Best ForThose who want the most medical coverage and freedoms and are willing to pay extra for it.Those who want more coverage and benefits while paying little or no extra for them. Willing to pay copays for healthcare when they come and use doctors & hospitals under the plan.

*This chart is best viewed on a computer or tablet device.

Conclusion & Important Considerations

  • Both Medicare Supplements & Medicare Advantage can be good coverage. It’s a matter of what’s suitable to your wants, needs, and monthly budget.
  • If you are curious or thinking about changing to Medicare Advantage, learn the pros & cons and compare your options with the Medicare Supplement package you currently have. Get recommendations and guidance from your Agent.
  • Medicare Supplements do not have an annual open enrollment period. If you change to an Advantage plan and want to change back, you will more than likely need to answer health questions on the application. If you don’t have or haven’t had any serious medical conditions recently, it could be fine. However, if you have, you will most likely not be able to change back.
  • If your biggest concern with your Medicare Supplement is the monthly cost, yet, you still like the coverage. If you’re eligible, you may want to consider replacing your current policy with another Medicare Supplement. This option could save you money on your monthly costs while allowing you to keep the same type of insurance.

Medicare Supplements do not have an annual open enrollment period. If you change from a Medicare Supplement to an Advantage Plan, you will more than likely need to answer health questions on the application. This can be fine as long as you don’t have or didn’t recently have a serious condition, however, it may also prevent you from changing back.