Medicare Supplement and Medicare Advantage plans are 2 options that offer Medicare beneficiaries choice of health care coverage.
Let’s take a look at the 3 key areas to compare plans: Coverage, Cost and Changes.
1. Coverage
Original Medicare (Parts A & B) helps pay for doctor visits and hospital stays, but it doesn’t cover everything. Beneficiaries often choose either a Medicare Supplement or a Medicare Advantage plan for additional coverage. Medicare Supplement plans have no networks, no referrals needed and no plan-required prior authorizations. Insured members can see any provider who accepts Original Medicare including while they travel anywhere in the United States. Medicare Supplements are secondary insurance to Original Medicare, a Medicare Supplement plan “fills in the gaps” of Medicare coverage. With Medicare Advantage plans, there is typically a network from which to choose providers. Coverage outside the plan’s network depends on the type of plan and the services received. Some plans allow members to see out of network providers, but usually at a higher cost. Depending on the plan, referrals may be needed to see specialists. Medicare Advantage plans (known as Part C) combine Part A & B Medicare coverage and often include Part D prescription drug coverage with additional benefits such as dental, vision and hearing care, all under one convenient plan. Both types of plans provide coverage that can offer more than Medicare alone. Medicare Supplements may appeal to those who value greater flexibility while Medicare Advantage may suit those who are comfortable using plan-specific provider networks.
2. Cost
Cost is another important factor when choosing between a Medicare Supplement or a Medicare Advantage plan. Medicare Supplement member pays a monthly plan premium rate and, with most plans, the Medicare Part B deductible. They also pay the Medicare Part B premium. Then, Medicare Supplement insurance works with Original Medicare to cover some or all out of pocket costs, such as deductibles, coinsurance and co-payments for Medicare-eligible expenses. A good way to think about it is that a Medicare Supplement insurance is a “pay upfront” plan. Paying premiums may seem like a high cost now however, beneficiaries can plan for that monthly cost. They will have the peace of mind of knowing that the plan will pay some or all out-of-pocket costs if they have medical services during the year. Medicare Advantage beneficiaries typically pay a low or $0 monthly premium, as well as the Medicare Part B premium. Beneficiaries would then pay any applicable co-pays, coinsurance or deductibles when they receive any medical services, up to the plan’s out of pocket maximum. Total costs may vary depending on the service and whether services are received by in-network or out-of-network providers. While Medicare Advantage plans generally have a low or no monthly premium, members will pay medical expenses throughout the year as they use the plan, depending on the services received. Depending on the plan these expenses can exceed $9200.00 in a year.
3. Changes
A third consideration when comparing Medicare Supplement and Medicare Advantage plans is how comfortable a beneficiary is with potential changes to coverage and benefits over time. Medicare Supplement plans offer lifetime coverage. Medicare Advantage provider networks and benefits in Medicare Advantage plans will change from year to year, beneficiaries will have the opportunity to review their coverage annually and decide whether it continues to meet their needs, lifestyle and budget. Beneficiaries who wish to change or discontinue their Medicare Advantage plan can do so during certain times each year. There are various enrollment periods so it’s important they are aware of what and when changes can be made. These changes normally occur between October 15th and December 7th of every year. Medicare Advantage may appeal to beneficiaries who appreciate the opportunity to review and adjust their plan every year. Those looking for stability in plan features and coverage may prefer a Medicare Supplement plan.
