Medicare Advantage vs Medicare Supplement Insurance. What’s the Difference?
What is a Medicare Advantage Plan?A Medicare Advantage Plan is one of your two health insurance options to get your primary coverage when signing up for Medicare, the other being Original Medicare. Also called Medicare Part C, Medicare Advantage Plans are private health insurance plans that combine Medicare Part A (Hospital Insurance) with Medicare Part B (Medical Insurance). In addition, many include additional benefits like:
- $0 Monthly Premiums
- Prescription Drug Coverage
- Vision Insurance
- Dental Insurance
- Hearing Insurance
- Medical Transportation
- Gym Memberships
- Meal Delivery
- Health Maintenance Organization (HMO) plan
- HMO Point-of-Service (HMOPOS) plan
- Medical Savings Account (MSA) plan
- Private Fee-for-Service (PFFS) plan
- Special Needs Plan (SNP)
Medicare Advantage Plans Start At $0/MonthIn 2020, nearly two-thirds (60 percent) of Medicare Advantage beneficiaries paid no premium for their plan.[iv]You’ll still be required to pay your Medicare Part B premium. That said, it may be an enticing option for those who don’t want to juggle paying multiple premiums each month. If you’re interested in seeing Medicare Advantage Plans with $0 monthly premiums, Ensurem offers an online quote tool that’ll allow you to compare plans in your area.
What is a Medicare Supplement Insurance Plan?If you decide to enroll in Original Medicare, you may find that you’ll still have to pay a share of the out-of-pocket costs for your health care. That’s where a Medicare Supplement Insurance Plan comes in. Also called Medigap, Medicare Supplement Insurance Plans are government-approved supplemental insurance plans offered by private insurance carriers.[v] Medicare Supplement Plans are used in conjunction with your Original Medicare to help pay for some of the remaining health care costs, including:
- Deductibles: The set amount you pay each year for your health care before your plan starts to share the costs of covered services.
- Copayments: The fixed amount you pay for a covered health care service. When you visit a provider, such as a doctor or a hospital, you might have to make a copayment before you receive care.
- Coinsurance: The percentage of costs you pay after you’ve met your deductible. For example, your plan may cover 80% of a covered health care service, while you’re responsible for 20%.
How much does Medicare Supplement Insurance cost?Each insurance company determines the costs of the premiums of the Medicare Supplement Insurance Plans it sells. Medigap policies can be priced - or rated - in three ways:
- Community-Rated (No Age-Rated): The monthly premium costs are the same to everyone who has that Medicare Supplement Plan regardless of age.
- Issue-Age-Rated (Entry Age-Rated): The premium costs are based on the age of when you buy the Medicare Supplement Plan but won’t go up because of your age.
- Attained-Age-Rated: The Medicare Supplement Plan’s premiums will be based on the age you attained the policy and will go up as you get older.
What’s the Difference?While both Medicare Advantage and Medicare Supplement are U.S. government-approved plans offered by private insurance carriers, that’s about the end of their similarities. These plans serve different purposes as one can be used as your primary Medicare insurance plan while the other is additional insurance.
|Medicare Advantage||Medicare Supplement|
|Can I use this as my primary health insurance?||Yes.||No. You need to be enrolled in Original Medicare to get an M.S. Plan.|
|Do I have coverage outside the U.S.?||Generally, it doesn't cover care outside the U.S.[vii]||Some M.S. Plans offer coverage outside the U.S.|
|Will I have prescription drug coverage?||Plans usually have prescription drug coverage.||You'll need to add a separate Prescription Drug Plan (Medicare Part D) to get coverage.|
Can I Have Both?The short answer is “no.” According to the Centers for Medicare and Medicaid Services, you can’t use your Medicare Supplement Insurance Plan to pay your Medicare Advantage Plan copayments, deductibles or premiums. It is illegal for anyone to sell you a Medicare Supplement Insurance Plan unless you switch from Medicare Advantage back to Original Medicare.[viii]
Which One is Best for Me?Ultimately, the decision on which is better – a Medicare Advantage Plan or Original Medicare with a Medicare Supplement Insurance Plan – is up to you and your situation. You’ll need to factor in the health care plan or plans’ overall costs, level of coverage and in-network providers. Whether you know what you want or not, let Ensurem guide you through finding and enrolling in a Medicare health insurance plan. Ensurem has a team of licensed insurance agents offering free, no-obligation consultations aimed at helping you find a plan that best fits your needs. If you would rather do your own shopping, we also have online quote tools on Ensurem.com that allow you to compare Medicare Supplement and Medicare Advantage plans available in your area side by side. Please give one of our licensed insurance agents a call using the phone number above or go to www.ensurem.com. [i] “Medicare and You Handbook 2022,” Page 6, Centers for Medicare and Medicaid Services, https://www.medicare.gov/Pubs/pdf/10050-medicare-and-you.pdf [ii] “Medicare and You Handbook 2022,” Page 61, Centers for Medicare and Medicaid Services, https://www.medicare.gov/Pubs/pdf/10050-medicare-and-you.pdf [iii] “Your Medicare Coverage Choices,” Medicare.gov, https://www.medicare.gov/what-medicare-covers/your-medicare-coverage-choices [iv] “A Dozen Facts About Medicare Advantage in 2020,” Meredith Freed, Anthony Damico, Tricia Neuman, Kaiser Family Foundation, Jan. 13, 2021, https://www.kff.org/medicare/issue-brief/a-dozen-facts-about-medicare-advantage-in-2020/ [v] “What’s Medicare Supplement Insurance (Medigap)?,” Medicare.gov, https://www.medicare.gov/supplements-other-insurance/whats-medicare-supplement-insurance-medigap [vi] “How to Compare Medigap Policies,” Centers for Medicare and Medicaid Services, https://www.medicare.gov/supplements-other-insurance/how-to-compare-medigap-policies [vii] “Medigap & Travel,” Medicare.gov., https://www.medicare.gov/supplements-other-insurance/medigap-travel [viii] “Medigap & Medicare Advantage Plans, Medicare.gov, https://www.medicare.gov/supplements-other-insurance/whats-medicare-supplement-insurance-medigap/medigap-medicare-advantage-plans. 0194BGMUGN2021M_V1
Denise Austin, 65, Ensurem Ambassador
Best-Selling Author, Creator of Fit Over 50 Magazine
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