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Medicare Advantage vs. Supplement Plans
Medicare Supplement Insurance policies complement your original Medicare plan and will pay some, if not all, of the expenses that Part A and B do not cover. These expenses could be co-pays, coinsurance, deductibles and other excess charges. There are many different types of Supplement policies available today and they are offered by many different carriers. However, these policies have all been standardized by the federal government, meaning that the benefits for these policies, known as Plan A through N, are all the same regardless of the carrier; the only difference is in the premium. Premiums vary depending on how the carrier prices the policy, which is dependent on different factors such as age or geographical location. You can get the exact same plan for a lot less through a different carrier. Also, as the rules and regulations for healthcare are constantly changing, it’s important to note that plans E, H, I, and J are no longer for sale, but you can keep these plans if you already have one. Ultimately, the best supplement plan is one that is purchased from a quality carrier, has a low premium and leaves you with the least or no out of pocket expenses.
Medicare Advantage Plans are “IN PLACE OF” and are an ALTERNATIVE to Medicare. Although they are offered and serviced by many different private carriers, these carriers have all been contracted by the federal government to administer the plans. These plans have low premiums and provide the same types of benefits that Medicare provides, in addition to extra benefits. Types of Medicare Advantage Plans include Health Maintenance Organizations (HMOs), Preferred Provider Organization (PPOs), and Private Fee-for- Service Plan (PFFS).
Here are the pros and cons of each plan.
Medicare Advantage Pros:
• No or low premiums. Because your Part B premium, along with your original
entitled coverage (additional funds from the government) is applied to the
Medicare Advantage plan, the premium can be as low as $0.00 to $50 per
month on average.
• Depending on how often you need certain services such as doctors' visits and
outpatient hospital care, an Advantage plan could save you more money than a
Supplement plan because the premiums are much lower.
• Easy enrollment process as the carrier will only be interested in knowing if you
have End Stage Renal Disease.
• Medicare Advantage Prescription Drug (MAPD) plans include prescription
• Some Medicare Advantage plans include Vision, Dental and Hearing coverage
Medicare Advantage Cons:
• Too many choices. Unlike Supplement plans that are standardized, there are
literally hundreds of different types of Medicare Advantage plans offering
different coverages. It’s hard to know if you getting the best plan without
reading and comparing each MA plan.
• Under the current rules and guidelines, Medicare Advantage plans can be
changed or discontinued on a yearly basis, leaving you to start the process
over or be stuck with different coverage than you originally agreed to.
• Always subject to decrease in benefits do to current economic conditions and
• Not all doctors accept Medicare Advantage coverage; even those who accept
Medicare may not accept your MA plan.
• Medicare Advantage has co pays and deductibles, in which the exact amount
may not be known until months later when all the paperwork has been
completed and processed.
• Not all plans are offered in all states, so if you move you may be forced to start
the process over and get a new MA plan for that particular area.
• Out of pocket maximums could go as high as $5,000 which may not be hard to
reach if you become seriously ill or have many illnesses in any given year.
Medicare Supplement Pros:
• Because Medicare Supplement plans work with Medicare, any doctor who
takes Medicare, will also accept Medicare Supplement insurance.
• Unlike the HMO’s or PPO’s of the Medicare Advantage plan, you do not need
to stay within your network or need a referral to be covered for services.
• There is less paperwork, as medical bills are submitted to Medicare directly
and then automatically submitted to a secondary payer (your Medicare
Supplement carrier) to pay the balance.
• While the premiums may vary with Medicare Supplement plans, there are much
fewer types of coverage (only Plans A through N) unlike the hundreds of
Medicare Advantage plans available. This makes is much easier to compare
plans as you are only really comparing premiums. Coverage stays the same
for each type of Medicare Supplement plan, regardless of geographical area,
age of insured, or carrier of plan.
• With some Medicare Supplement plans (like Plan F) there are no out-of-pocket
expenses at all; with other Medicare Supplement plans, there are much lower
out-of-pocket expenses when compared to Medicare Advantage. Under the
current rules and guidelines.
Medicare Supplement Plans must be renewed annually, as long as you make
you premium payments on time.
• If you move to another city or state, your Medicare Supplement policy moves
Medicare Supplement Cons:
• While premiums do vary, expect to pay around $150 a month on average for
Medicare Supplement insurance. As with regular insurance policies, you may
qualify for discounts for being in good health, being a non-smoker, being
married, etc. IHS Group can help you find a carrier that offers these discounts.
• Like regular insurance plans, enrollment is not guaranteed and is subject to
preexisting health conditions.
• Medicare Supplement policies usually do not include Prescription coverage.
You need to get a separate Medicare Part-D plan to cover your prescriptions.