When you’re Medicare eligible, you’re likely deciding how to best supplement your coverage. Should you choose a Medicare Supplement or a Medicare Advantage plan?
A good argument can be made for both, but for the purposes of this article we’ll explain why many of our clients choose a traditional Medicare supplement plan. Also referred to as Medigap policies, these plans (like F, G, & N) work with Original Medicare as oppose to replacing it.
1) No Network Restrictions With Supplements
The primary reason many of our clients enroll in a Medicare supplement is to avoid the hassle of network restrictions. When you choose a supplement, you can see any doctor or hospital that accepts Medicare. Your supplement will not in any way determine who you can see – or where you can receive care.
Medicare Advantage plans work differently. Most of these policies are HMOs and PPOs. In other words, they have networks you need to use in order to keep your medical costs down. If you go out of network, you’ll pay more. And in some cases, out of network care may not be covered at all. Additionally, some Advantage plans require a referral from your Primary Care Physician to see a specialist.
Since Medicare Supplements have no networks to worry about (they simply start paying after Medicare stops), they’re convenient for those who travel frequently within the U.S. They can also be more suitable for those who have second homes in other states. With a supplement, you never need preapproval to go see any doctor or hospital that accepts Original Medicare.
2) You Have Limited Out Of Pocket Exposure
The other nice feature Medicare supplements provide is predictability. With almost all of these plans, you’ll know exactly what your out-of-pocket exposure is for the year. The most commonly purchased policies (like Plans G, N and F) only have a couple of hundred dollars that you are responsible for each year – if that. Then your supplement covers the rest of any Medicare approved expenses you might encounter.
Medicare Advantage plans have much higher out-of-pocket exposure for the insured. It’s not uncommon to see yearly out-of-pocket maximums in the $5,000 – $10,000 range. Your exposure will depend on what plan you choose (HMO, PPO, or PFFS) and whether you are in (or out of) network for your care. It’s much harder to predict, but the cost-sharing is much higher with most Advantage plans.
3) You’re Tailoring Your Coverage To Fit Your Needs
You’ll here many insurance companies refer to Medicare Advantage plans as, “All in One” policies. That’s because they privately insure you for what Medicare Parts A and B cover – while also filling in some of the gaps in A and B. On top of that, many of the policies include Part D drug coverage and some dental and vision insurance.
But some of our clients like to tailor their Medicare insurance coverage to their needs. This means selecting the Medicare Supplement that’s best for them, choosing a separate Part D drug plan that best covers their specific prescriptions, then choosing a comprehensive dental and vision plan that their providers accept.
Sometimes an Advantage plan can work well for some of these part, but not all of them. Maybe they don’t have a favorable copay on a particular prescription – or one of your doctors is not in the plan’s network. While you usually pay more when purchasing each piece separately, you have the peace of mind knowing that all parts should be a better fit overall.
Contact Us To Compare All Of Your Medicare Options
Still not sure? Read our article on the top three reasons to select a Medicare Advantage plan and then contact us with questions. Hyers and Associates is an independent insurance brokerage specializing in Supplements, Advantage, and Part D Drug plans.
We can help you compare all of your options so you can find the insurance coverage that best suits your needs and budget!