Medicare Advantage Vs. Medigap

A Look At The Differences Between Medicare Advantage And Supplement Insurance Plans

The differences between Medicare Advantage and Supplement Insurance plans are differences in kind, not just in name. Medigap insurance supplements the traditional coverage, while Advantage policies are a privatized replacement. Both fill in the gaps in financial coverage that can leave beneficiaries with up to 20% of their bill to pay out of pocket.

Medicare is health insurance administered by the federal government for individuals 65 and over, or younger individuals with certain disabilities. There are 4 parts. Part A covers hospitalization. Part B covers doctors visits. Part C is the option allowing privatized coverage. Part D is prescription drug coverage which must be purchased separately but is government regulated.

With supplemental coverage, also called Medigap, the government pays it’s covered portion of the bill, then supplemental insurance is billed for the remainder. It’s highly regulated by the government, with every plan option being the same no matter where you buy and who you buy from. Applicants decide which plan options to include. Premiums are higher and prescription drug coverage still has to be purchased as a separate policy. There are no additional benefits provided and no coverage is available for vision, dental, or hearing.

Part C,  Advantage coverage means moving to private insurance with a Medicare contract. The idea is that private providers will be more efficient and can offer added benefits. They contract with and receive a contribution from the Centers for Medicare and Medicaid (CMS) every month, and may charge an additional premium based on the extra benefits they provide.

Most Part C policies cover prescription medication, vision, dental, and hearing. Many offer additional preventative care benefits. Some even include discounts for health club memberships. Most require some cost sharing such as co-pays and deductibles, but premium costs are much lower than premiums for supplemental coverage and additional benefits are offered.

Part C plans are easy to qualify for. Interested individuals can enroll 3 months before and after reaching age 65, or between 11/15 through 12/31 every year. Starting in 2011 the Annual Election period will start on October 15.  Many are HMO’s but PPO’s are also available. Part C plans are offered through many private companies offering different benefits, options and premiums so do your research or find a certified insurance broker in your area.

Although supplemental plans accept enrollment all year round, after the initial eligibility period they have strict medical underwriting standards and can turn down applicants. When individuals first become eligible for medicare, supplemental plans must take all comers. After the grace period, they can turn applicants away. However, regulation also requires an extended grace period for those enrolling in Part C programs. If dissatisfied within 6 months, individuals can switch back to medicare and enroll in supplemental coverage. After six months, supplemental plan underwriters can turn new applicants away. If you switch from supplemental coverage to try an advantage plan, you still have the six months window. Beneficiaries can cancel Part C coverage to return to government funded Medicare during the Annual Election Period each year

It’s important to understand the differences between Medicare Advantage and Supplement Insurance plans before making a decision. When you first become eligible you will receive a benefit guide from the government. The government also provides a website as a resource for general information. Online sites allow you to compare benefits and premiums or call to speak with a representative. Reading policy information can be a daunting task. Some individuals prefer to sit down with a trusted insurance agent to discuss the possibilities.

You may also visit our site at for helpful information or to speak to a live representative.


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