When deciding which is the better coverage for you with the lowest out-of-pocket expenses, explore the difference between medigap vs medicare advantage.
Did you know that in 2018, 17.8% of the people in the United States were covered by Medicare? This insurance program is designed to make health care more accessible to those 65 or older and those who are disabled.
However, the original Medicare program doesn’t provide coverage for every medical need that older Americans have. As a result, many people turn to additional insurance plans that provide additional benefits.
Two of the most popular are Medicare Advantage and Medigap. In order to choose between the two for your own needs, you’ll need to understand Medigap vs Medicare Advantage and review the pros and cons of each one.
Before we dive into the additional coverage options, it’s essential to understand Original Medicare. This program was implemented in 1965 and is designed to help those who are older and disabled.
The cost and coverage you qualify for will depend on how long you paid Medicare taxes. Medicare is made up of two parts, Part A and Part B. Most people qualify for Part A for free and pay a monthly premium for Part B.
Part A covers hospital inpatient care, skilled nursing, hospice, and in-home nursing. Part B covers services such as doctor’s visits, outpatient procedures, and preventive care.
Neither Part A nor Part B covers prescription medication taken at home, and they don’t include coverage for hearing, vision, or dental care. That’s why a lot of Americans choose to get additional coverage.
As a result, they end up comparing Medicare Advantage vs Medigap to gain additional benefits.
What is Medicare Advantage? It’s an attempt to meet patients’ needs for coverage beyond what Original Medicare provides. Medicare Advantage is administered by private insurance companies and piggybacks on your Part A and Part B coverage.
Medicare Advantage plans are an all-in-one solution that provide a variety of additional benefits. For instance, most Advantage plans include prescription drug benefits. Many also provide coverage for hearing, vision, and dental services.
A Medicare Advantage plan may also give you reduced-cost or free membership at specific gyms along with other preventive services.
When you have Medicare Advantage, you often save money on out-of-pocket expenses. Instead of paying a percentage, you’ll generally have a defined copayment. This can make your cost for medical procedures much more predictable.
You’ll also have a maximum out-of-pocket amount per year. Once you hit that limit, any further medical procedures for the year are without cost.
Best of all, you can gain additional benefits without paying a lot more. In fact, many Advantage plans are available for $0 a month! You do have to continue paying your Part A premium, however.
The biggest drawback of a Medicare Advantage plan is that they have defined provider networks. If you travel a lot, you may not want to choose this option because you’ll be outside the network area often.
You may also need to get referrals or prior approval before specific procedures are covered. If you want immediate coverage or desire to choose specialists without referrals, you will need to research plans carefully.
Finally, in some cases you may pay more with an Advantage plan. If you need a lot of care and the maximum per-year limit is high, or the plan doesn’t have one, you could pay a lot out-of-pocket. This article on Health Status can tell you more.
If you don’t want Medicare Advantage, you do have another option. You may want a Medigap plan instead.
What is Medigap? It’s a plan designed to fill in the “gaps” in Original Medicare. It’s sold by private insurers, much like Medicare Advantage, but you can’t have both at the same time. Medigap is also known as Medicare Supplement Insurance.
Medigap only supplements your Original Medicare coverage, rather than being an all-in-one alternative. You’ll pay your Part B premium and a Medigap premium as well. You won’t get prescription drug coverage from Medigap — you need to buy Medicare Part D for that.
Medigap will help pay your Part B copayments and deductibles. Medigap plans are also guaranteed to renew as long as you pay your premium, regardless of your health status.
Generally Medigap plans don’t offer the extra benefits that Advantage plans do. For instance, they don’t cover vision, hearing, or dental services. However, they may provide coverage for travel outside the U.S.
Because Medigap works with Original Medicare, you won’t be limited by a provider network. You’ll be able to obtain health care wherever you are as long as the provider accepts Medicare coverage.
If you want to stick with Original Medicare, adding Part D for prescription drugs and Medigap for help with copayments and deductibles is a great choice!
It’s important to remember that you can’t have both Medigap and Medicare Advantage. You have to look at Medigap vs Medicare Advantage and choose one or the other.
If you’re looking for an all-in-one option that provides additional benefits that Original Medicare doesn’t offer, then Medicare Advantage is probably the best option. You’ll want to shop around and compare plans to get the price and network you need.
For those who’d prefer to stick with Original Medicare, getting Part D and Medigap can help you control your costs. You won’t be limited to a specific network and you’ll still get the medical care you need.
Only you know which one is right for you. Hopefully this guide helps you decide!
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