Medicare Advantage vs Medicare Supplement Insurance. What’s the Difference?
As Medicare enrollees review their options, they’ll often see two insurance plans come up beyond Original Medicare – Medicare Advantage and Medicare Supplement.
Though these plans have some things in common, they’re two very different insurance products that serve particular purposes. With that in mind, let’s discuss what a Medicare Advantage Plan and Medicare Supplement Insurance Plan is, how they’re different and which plan may best fit your needs.
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
Please note that even though Medicare Advantage replaces your Original Medicare, you may still be required to pay your monthly Medicare Part B premium.[i]
Medicare Advantage comes in many forms. These different plan types vary in how you obtain special benefits if you meet specific criteria, pay for services and receive discounts for going to “preferred” doctors. Here are the different types of Medicare Advantage Plans:[ii]
- 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)
Your other insurance option is to enroll in Original Medicare consisting of Medicare Part A and Part B offered by the federal government.[iii] Original Medicare only covers up to 80 percent of your health care costs and doesn’t include the additional benefits commonly included with a Medicare Advantage Plan.
Medicare Advantage Plans Start At $0/Month
In 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%.
There are 10 Medicare Supplement Insurance Plans available in the U.S., each with a different letter designation. These 10 Medicare Supplement plans are standardized to provide different levels of coverage designed to fit people’s needs and budgets.
It’s important to note that not all 10 plans are available. Medicare Supplement Plan C and Plan F are only available to those who were Medicare-eligible before Jan. 1, 2020. Also, Medicare Supplement plans in Massachusetts, Minnesota and Wisconsin standardize their Medicare Supplement plans differently.[vi]
Please note that you need to be enrolled in Medicare Part A and Part B to get a Medicare Supplement Insurance Plan.
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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.
Due to each insurance company setting its prices for how much their Medicare Supplement Plans cost, it’s essential to shop for your plan. You may find two different insurance companies charging different fees for the same Medicare Supplement Plan. If you’re interested in doing your own comparison shopping of the plans offered in your area, Ensurem has an Online Medicare Supplement Insurance Quote Tool.
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 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.
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Denise Austin, 65, Ensurem Ambassador
Best-Selling Author, Creator of Fit Over 50 Magazine
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