Southern Senior Care Blog

There are many things to consider when deciding whether to go with a traditional Medicare Supplement (Medigap) Plan or a Medicare Advantage plan. I was not sure I wanted to try and create this comparison document, but I believe the infomation below will help you get an overview of these two Healthcare Options. Again, I want to stress that deciding between these two options is a very important decision. You should meet with an experience Medicare Supplement Agent to discuss your specific circumstances. So, on to the comparison…

Medicare Supplement Insurance

Overview:

Most people who have Medicare, have Medicare Supplement Insurance to cover the “Gaps” in what Medicare pays. This is why these plans are also refered to as ”Medigap” plans. These plans are offered through dozens of Insurance Companies around the country. Medicare Supplement Insurance pays “AFTER” Medicare pays.

Medigap Pros:

• If a doctor, hospital or medical facility accepts Medicare, then they accept all Medicare Supplement Plans. (i.e. there are no networks, Medicare Supplements are not HMO’s or PPOs) You do not ever need a referal to see a doctor or specialist. The doctors generally don’t deal with the Medicare Supplement Company anyway. They submit their claims to Medicare, Medicare pays their part, then Medicare sends the balance to the Medicare Supplement Company to “Pay the Rest.”
• Medicare Supplement Insurance pays “after” Medicare pays.
• There are generally no co-pays when services are rendered.
• Medigap plans are standardized (A-K) so you can compare prices from one company to another and always know you are comparing the same exact coverage. (Plan F with one company is “IDENTICAL” to Plan F with every other company)
• Generally there are no additional out of pocket costs throughout the year other than the premiums.
• Medigap Policies are “Guaranteed Renewable”. You can never loose the coverage as long as you continue to make the premium payments.
• If you move to another city or state, your Medigap policy moves with you.

Medigap Cons:

1. The average monthly Medigap policy premium is around $150.00. Some Medicare Supplement companies offer BIG discounts for things such as No tobacco use, married, spousal discounts, female discounts and others. If you work through an independent broker, he/she will likely be able to help you locate a Medicare Supplement that does offer these types of discounts.
2. You pay the monthly premium even if you never visit a doctor or hospital during the year.
3. Since 2006, no Medigap policy includes Prescription coverage. You need to get a separate Medicare Part-D plan to cover your prescriptions.

Representative List of Medigap Providers

• AARP
• Bankers Life 
• Blue Cross Blue Shield
• Continental General Insurance 
• Lincoln Heritage 
• Mutual of Omaha
• Royal Neighbors
• Sterling Investors Life Insurance
• United American
• United World Life (a Mutual of Omaha company)

Medicare Advantage Plans

Overview

Also called Medicare Health Plans, MA or MAPD plans. They are relatively new (within last 2 years). Most of them are provided by companies that also provide individual and group major medical plans. Some Medicare Supplement Companies also have a Medicare Advantage Plans. Medicare Advantage Plans pay “INSTEAD” of Medicare. There are several types of Medicare Advantage Plans. The most common are HMO, PPO or PFFS. Check out this Medicare Glossary for differences.

Medicare Advantage Pros:

• Low monthly premiums (Average is about $50/month) some as low as $0.00
• They can be offered with No Monthy Premium to you, because Medicare takes your $96.40 monthly Medicare Part B premium and gives it to the Medicare Advantage Provider. Medicare also pays Medicare Advantage companies additional funds to help cover your medicare expenses (the money that was deducted from your pay check throughout your working career).
• If you don’t go to the doctor much, then a Medicare Advantage plan could save you more money over the course of a year than a Medicare Supplement, since the monthly premiums are generally much lower.
• Some Medicare Advantage plans include prescription coverage. These are called MAPD plans.
• Some include additional benefits such as coverage for dental (routine cleanings) and vision (routine checkup) healthclub memberships.

Medicare Advantage Cons:

• They are NOT standardized. There are hundreds of different varieties of MA plans. Consumers really need to read the fine print to make sure they know what they are getting.
• MA plans are NOT guaranteed renewable. The company can discontinue the plan at the end of any year. You would then need to get another plan for the following year.
• Doctors can choose to NOT accept any or all of the MA plans. Even if they accept Medicare, they do not have to accept MA plans. In fact they may accept your plan today and not accept it next month.
• Your primary care physician may accept the plan but a specialist that you are referred to may not.
• Most MA plans have co-pays for almost every visit to a doctor or hospital. For example many will have something like: $10 for doctor visit. $25 for specialist, $250/day for first 5 days of hospital stay.
• There is generally more paperwork for the consumer. Many co-pays are a percentage of the Medicare approved amount, which is not known until after the bill has been submitted to the Medicare Advantage provider, so you will be billed for your co-pay at a later date, sometime several months later.
• If you move to another county or state, the plan you have may not be available in that area and you will need to get another plan.
• If you have a particularly unhealthy year, your out of pocket costs could reach your “Out of Pocket Maximum” which could be $4,000-$5,000 ore more.

Representative list of Medicare Advantage Plans

• Advantra Freedom (Coventry)
• Blue Cross Blue Shield
• Humana
• Today’s Option (Pyramid)
• Wellcare

Special Needs Plans

Overview

Special Needs plans are a type of MA plan. They work very much like other Medicare Advantage Plans but are only available to people with the qualifying conditions such as Diabetes, COPD, or Chronic Heart Failure.

Representative list of Special Needs Plans

• Care Improvement Plus 
• Evercare