Medigap vs. Medicare Advantage — Which One Is Best For You?

Hi everyone, Evan here — your health insurance guru. Okay, okay — I’m not a guru, but I do know a thing or two about health coverage and this week I wanted to talk about a specific topic I get asked about fairly frequently —  Medicare Supplemental Plans.

Many of my clients who qualify for Medicare find themselves looking to fill in the gaps of their coverage with supplemental plans. However, it’s often frustrating navigating the insurance maze; which supplement plan should you choose? Which one will pay the most of your out of pocket expenses with the lowest monthly premium?

Medigap vs. Medicare Advantage

There are two main options when looking into supplemental plans for Medicare: Medigap Supplemental Insurance with a Standalone Part D Plan and Medicare Advantage (MA-PD). While MA-PD supplemental plans look inviting, with premiums as low as $0 or a “pay as you go”, there is a yearly maximum out-of pocket cost, plans can change from year to year, and you will have co-pays for hospital stay, tests, labs, x-rays, etc. Most Medicare Advantage plans have Part D plans embedded in them, meaning they come with drug coverage, but they aren’t exactly tailored to your own health needs and you’d have to stay in network (if you have an HMO). Essentially, MA-PD may be a better option if you can’t afford a monthly premium and don’t have any specific medical issues needing attention.

Medigap plans also come with some very attractive features like no networks, low deductibles, and the freedom to access any provider that accepts Medicare. No referrals, no paperwork from one provider to the next. They offer predictable and comprehensive coverage. Another major difference between MA-PD and Medigap plans is Medigap plans don’t change year to year and there are no yearly maximum out of pocket costs for the health portion. Pretty good, right?  Medigap plans are also guaranteed renewable — which means the insurance company cannot raise your rates or drop your coverage should any health conditions develop.These plans are perfect for those who travel frequently or embrace the  “Snowbird” lifestyle. It’s also well suited for those who have serious health conditions or those who have a lot of medical usage. Based on these benefits, Medigap sounds like the way to go, right?

Ready to Jump In?

Well, before you take the dive into Medigap coverage, there are also some things to consider:

One of the down sides of having such great coverage with a Medigap plan is that you’ll pay more for it. Premiums are usually much higher than Medicare Advantage plans because of its extensive coverage. Medigap plans also don’t come with drug coverage (Part D); they are purchased separately, called a “standalone Part D plan”. They go alongside your medical plan, and gives you an opportunity to best select your plan based on your medication needs. However, If you like the convenience of presenting only one card at your pharmacy, then Medicare Advantage plans may be best for you.

Every year Medicare raises the deductibles and co-pays for which you are responsible for (yippee). Your medical plan helps to pay for these things for you, and the cost of healthcare also experiences inflation like everything else, so it’s customary for Meidgap plans to experience rate increases from year to year. With most carriers, this rate will occur once a year on your policy anniversary, and depending on when it happens is where I come in or one of our expert agents. We will comparison shop your policy to see if other carriers offer the same plan for less.

We’re Here For You

Take a deep breath — I know this is a lot of information and a lot to consider when choosing what’s best for your health. But don’t worry, that’s what we’re here for! Let us help you figure out exactly what you need. Do you have questions? Feel free to send me a message and I’ll be happy to help you.