Which is best for me, a Medicare Advantage Plan or Medicare Supplement Plan?

Medicare Advantage Vs. Medicare Supplement

The answer to the question; which is best for me, a Medicare Advantage Plan or a Medicare Supplement Plan is not black and white. The answer is absolutely subjected to the individual asking the question, and the circumstances surrounding their own health care situation. For example, an Advantage plan may be much better for someone than a Supplement or sometimes called Medigap Plan, just because of their particular situation. On the opposite side of the fence, the reserved can be said for someone else in a very different spot with their health. There are strengths and weaknesses to both options. It is important to understand how each plan operates before you can decide which one fits your situation better.

Medicare Advantage Plans

Medicare Advantage plans or MAPD's, replace Original Medicare (Parts A & B) and combine them along with a prescription drug plan (Part D) to form what is commonly called 'Medicare Part C'. The insured is still in the Medicare program, however they are receiving their health insurance benefits through a private company or carrier, rather than the federal government. Advantage plans work in a similar fashion to group health plans, mainly in the form of co-pays and a network of providers to work with. Listed out below are a few pros and cons of Medicare Advantage plans.

Pros:

• Advantage plans have little to no premium in most states. In many cases, the only premium the insured will pay is the Medicare Part B premium for the year. In 2023 the Medicare Part B premium is $164.90.
• Advantage plans include a built-in prescription drug plan, or Medicare Part D drug benefit. This benefit comes with no extra expense to the insured, and allows them to use one member ID card for both Medical and RX needs.
• Many Advantage plans also come with ancillary benefits like vision, dental, hearing and Over-The-Counter dollars for their members.

Cons:

• Advantage plans come with networks of providers to use. With an HMO plan you must stay within your network to have expenses covered (Emergency room visits and urgent care are the exception to this).
• Advantage plans carry co-pays which can lead to higher out-of-pocket costs. Some plans have a maximum out-of-pocket close to $7,500 per year.
• Advantage plans require prior authorization for some services and referrals from a primary care physician to visit certain specialists.

Medicare Supplement Plans

Medicare Supplement plans are private plans offered through insurance carriers. There are a number of plans ranging from plan A to plan N, each plan carries a different benefit structure and amount of coverage. However, each carrier must have the same standardized benefit structure for plan A, the same for plan B, plan C, and so on down the line all the way to plan N. The only difference between one carrier's plan A and another carrier's plan A is the price.

Medicare Supplement plans are secondary to Original Medicare. With a Supplement plan, when an individual visit the doctors they will provide their Original Medicare card for billing. Medicare will pay for their portion of the benefits and the remaining charges will be forwarded to the Medicare Supplement company of choice. It is an extremely simple process and has very few 'hoops to jump through' in order to receive care. Listed below are a few pros and cons of Medicare Supplement plans.

Pros:

• Medicare Supplement plans do not have networks. Any provider that accepts Medicare; which is ninety-nine percent of hospitals and doctors across the country, are thus in play for an individual to receive benefits from. The supplement company does not make a difference, no supplement networks.
• Managed care does not exist for supplement plans. This means that prior authorization for services and referrals to see specialists are not needed.
• The individual is able to customize the level of supplement insurance they would like to receieve for the level of care they require.

Cons:

• The major drawback for Medicare Supplement plans are the premiums. In addition to the Part B premium that Advantage plan individuals pay, supplement plans have their own premiums that can range from $35-$270 per month depending on the plan chosen and the state that they reside in.
• Medicare Supplement plans do not include drug coverage. In order to obtain drug coverage the individual must purchase a stand-alone prescription drug plan to partner with Original Medicare and their supplement plan. This will create a third premium to be paid per month for their health care needs.

Conclusion

More often than not, someone with minimal health care needs may want to try out an Advantage plan. The reasoning for this is because they will have only one premium to pay in the Part B premium, very few if any co-pays to cover, and they will not be paying to be over-insured when they do not have the need for that much insurance. If someone does not want to be limited to a network of providers, or if they utilize a lot of health care services, then they may be a Medicare Supplement candidate. Knowing the pros and cons of both options, it is easy to see that the correct answer to our big question is absolutely subjective to the person asking it and their individual circumstances.