Medicare supplements vs. Medicare Advantage

There are many decisions to make once you’re ready for Medicare. If you’re weighing the difference between a Medicare supplement plan or Medicare Advantage, let us help! The key is understanding all the ins and outs and knowing there is no one-size-fits-all.

First, let’s define some of these words.

Medicare Advantage plans (Part C) are sometimes called all-in-one plans because members receive their Part A (covers inpatient hospital stays, skilled nursing care, home health care and hospice care), Part B (pays for outpatient hospital care, doctors’ visits, home health care, preventive services and durable medical equipment) and usually their Part D benefits (covers prescription drugs) from one company. Medicare Advantage plans may cover dental, hearing and vision.

The most popular Medicare Advantage plans are Health Maintenance Organizations (HMOs) and Preferred Provider Plans (PPOs). HMOs require services to be received from a network provider as well as referrals from a primary care doctor to see a specialist. PPOs allow you to go outside the network for a higher cost if you locate a provider who will accept the plan. Both are network-based but the PPO offers more flexibility. Since these plans are based on provider networks, be sure your doctors and hospital are willing to accept the plan before you buy it.

A Medicare supplement plan is sometimes called a Medigap plan because it fills in where Medicare doesn’t. You have a choice of eight standardized Medigap plans. Named after letters of the alphabet, each of the following plans contains a unique set of benefits: A, B, D, G, K, L, M and N. Plan benefits are the same regardless of where they are purchased. The only difference you’ll find is the price and the customer service.

What questions should you ask when you’re considering a Medicare supplement plan or Medicare Advantage? Here’s what we recommend:

  1. Is it important to keep your current doctor?
  2. Do you mind copays at the time of service?
  3. Do you need to know in advance how much you’ll spend on healthcare each month?
  4. Do you need health insurance to follow you when you travel?
  5. Do you want to be in control of where you receive your healthcare?

With those answers in hand, here’s an overview of what each offer.

Medicare supplement plans

  • No networks
  • Usually no copays/coinsurance at the time of service
  • Some plans cover deductibles and coinsurance which makes it easier for you to follow a budget
  • Can be used around the country as long as the doctor you visit accepts Medicare
  • You will not need to answer any medical questions if you enroll within six months of your Part B effective date
  • Some plans will charge higher premiums every year as you get older

Medicare Advantage

  • It’s based on networks
  • Usually copays/coinsurance are required at the time of service
  • Monthly out-of-pocket cost is based on services received which can make it more difficult to budget
  • Medicare Advantage is only required to cover out-of-network urgent and emergency care
  • The only medical question you will need to answer is if you have End Stage Renal Disease
  • There is a maximum out of pocket
  • It may cover extras such as dental, vision and hearing

If you have questions, contact your local Farm Bureau Financial Services agent or call 1-833-282-5928.