How to decide between medigap and medicare advantage?

Are you one of the lucky ones who is turning 65 soon? If so, congratulations! Now that the big day is approaching, it’s time to start thinking about your health insurance. Luckily for you (or maybe not so luckily?), there are two main options to choose from: Medigap and Medicare Advantage plans.

But how do you know which one is right for you? Well, pull up a chair and let me break it down for you.

What are Medigap and Medicare Advantage?

First things first – let’s define each option so we’re on the same page here.

Medigap

Also known as Medicare Supplement Insurance, Medigap policies help cover some of the out-of-pocket costs that come with Original Medicare (Part A & B). This can include copayments, coinsurance, and deductibles.

Fun Fact: There are 10 standardized Medigap plans available in most states lettered from Plan A – N.

Medicare Advantage

Medicare Advantage, also known as Part C, provides an alternative way to get your Original Medicare benefits through private insurance companies approved by/contracted by Centers for Medicaid Services (CMS). These plans offer more comprehensive benefits than traditional original medicare such as dental/vision/hearing coverage etc.

Fun Fact: More than 24 million Americans have enrolled in a Medicare Advantage plan as per https://www.cms.gov/newsroom/fact-sheets/2021-medicare-advantage-part-c-enrollment-data-virus-state “21 percent increase since last year.”

Now that we’ve got the basics covered…

Let’s compare them!

Okay folks put on your reading glasses because things might get nerdy from here.

There are many factors involved when considering which program would suit your needs better like Healthcare Provider network(s), Copays or Deductibles, Prescriptions Drug Coverage (if any), etc. Here are few of them:

Factor Medigap Medicare Advantage
Network Enrolled in Original Medicare Part A/B Plan Private network
Along with additional coverage

[[https://www.cms.gov/newsroom/fact-sheets/2021-medicare-advantage-part-c-enrollment-data-virus-state]]

Network

One of the key differences between these two plans is their provider networks.

Medigap: If you want to keep seeing your same doctor or health care providers that accept Original Medicare, then a Medigap policy might be right for you as they allow you to go out-of-network without referral whereas “Advantage” Plans keeps all services In-Network except emergency and some End Stage Renal Disease treatments.

Fun Fact: Kinda ironic but people call it an “Advantage” plan when it actually restricts choices! ¯\(ツ)

Cost Sharing

Cost sharing refers to the amount beneficiaries must pay for health care before receiving insurance benefits. This can include deductibles, copayments , coinsurance and out-of-pocket expenses

Medicare Advantage: These programs typically have lower monthly premiums than Medigap policies do (but at cost of restrictions ); however, they often require larger copays/deductibles/out-of-pocket maximums/moneybags# compared traditional medicare (what happens when Uncle Scrooge buys health insurance).

“One should consider depleting life savings while considering Medicare Advantage plans” [Just Kidding :P]

Medigap: Although Medigap plan premiums are higher than Medicare Advantage plans’ it offers less cost-sharing, deductibles & predictable healthcare costs over a year for those who utilize their benefits extensively or has frequent hospitalization across the coverage lifetime.

Prescription drug coverage

Original Medicare doesn’t include prescription drug (Part D) coverage, so beneficiaries can add either a Medicare prescription drug plan or a standalone Part D prescription drug plan offered by Private carriers.

Fun fact: “Wow, didn’t know I’ll have to fork out another premium/step-child college fund money every month for my pill bottle?”

On the other hand, most Medicare Advantage Plans are an all in one package that includes dental/vision/hearing/PART-D Rx benefits blended with medical and hospital insurance beyond Original medicare basically! Also some part C plans even offer wellness programs too!

Now let’s dive into..

How to decide between them?

In order to determine which type of policy is best suited for you we recommend considering below aspects while putting on your thinking hats.

Existing Medications

A key thing to keep in mind when comparing Medigap policies and Advantage Plans is existing medications – whether they’re being taken today or may be needed down the road. People who suffer from chronic illnesses like Parkinson’s disease/Kidney dialysis etc., may incur huge medical bills not covered under DMA Plan(s).

If so , it might make sense to prioritize Prescription Drug Coverage provided by comprehensive Network during selecting advantage plan rather than subscribing Medigap policy along with pricey [Stand-alone prescription(Medicare Part-D) ]Plan option.

Maximum Out-of-Pocket Costs

Like traditional Direct-To-Medicare-Plans Current MEDICARE ADVANTAGE PLANS also will have annual out-of-pocket limit that centers for Medicaid and Medicare services require plans❁ to meet. Whereas, MEDIGAP policies do not have MOOPs or limits on out-of-pocket spending.

❁[[https://www.medicareresources.org/faqs/max-out-of-pocket-limits-on-medicare-advantage-plans/]]

Budgetary Constraints

When weighing the pros and cons of each, it is also important keep budget in mind when considering Medigap vs. Medicare Advantage plans, especially if you’re living on fixed income (like social security). Most of medicare advantage options can put a dent into your monthly savings🤑 .

So before signing up ‘check whether premium/copays/deductibles’ does fit into allocated monthly deficit(even weekends at times!) but don’t forget that in some cases Medigap supplement might end up being more costly than a Advantage Plan providing identical feature-set!

Some final advice

Ultimately, deciding which coverage option suits best will depend entirely upon an individual’s health needs and preferences (and probably luck too!).

Fun Fact: Although there may be no one-size-fits-all answer to this question but we hope going through above pointers along with comparing cost implications & analyzing Maximum Out Of Pockets(MOOP) will give you enough confidence😏to determine between EDNA/UNITED/OPTUM/Etc Insurance providers!

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