One of the first questions our clients ask is, “Should I choose a Medicare Supplement or a Medicare Advantage plan?” Even though this is a common question, the answer isn’t so simple. You must first compare medicare supplements vs medicare advantage plans and evaluate their pros and cons. A Medicare supplement might be a great choice for one person but not another. The same goes for Medicare Advantage.
Medicare Supplements: Pros and Cons
What does it cover? Medicare Supplements help cover the gaps in Medicare, including all/ or some of the deductibles and coinsurance, depending on the plan. The most popular supplements are (Plans F, G, and N) and leave the beneficiary with minimal out-of-pocket expenses when they receive care.
The pros?
Generally speaking, Medicare Supplements are more standard than Medicare Advantage plans from one company to the next. There are ten supplements to choose from, and their coverage is the same across insurance carriers. For example, Plan F has the same coverage at XYZ company as it is at ABC company. That makes them very simple to understand and compare.
A great thing about Medicare Supplements is that they are accepted nearly everywhere. As long as your provider accepts Medicare, they’ll also accept your supplement no matter which insurance company your plan is with. This means you don’t have a network of providers you need to stick with. So if you travel to other states, you can still see any doctor that takes Medicare.
The cons?
All of these benefits come with a higher premium price tag. Since you pay less (or not at all) out of pocket when you receive care, you are paying more monthly. This is a pay more now, and pay less later type of coverage. Your premium will depend on which plan you choose and can be based on personal considerations like where you live, your gender, age, and tobacco use. In addition, most plans increase as you age, so your premiums will continue to increase every year you keep it.
Another downside to Medicare Supplements is that they do not offer additional benefits. They will only cover services and procedures that are included in Parts A and B. You’ll have to get separate plans for prescription drug coverage (Part D) and dental, vision, and hearing care.
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Medicare Advantage: Pros and Cons
What does it cover? At a minimum, all Medicare Advantage plans must cover all of your Medicare Part A and Medicare Part B benefits, but many of them include additional benefits.
The pros?
The first thing our clients notice with Medicare Advantage plans is the low monthly premiums. Many insurance companies have Medicare Advantage plans with $0 premiums. While this doesn’t mean they’re free, it does make them affordable.
As mentioned, Medicare Advantage plans usually include extra benefits that Medicare Supplements do not. These benefits may include dental, vision, hearing, meal delivery, transportation to medical appointments, quarterly over-the-counter spending allowance, and even gym memberships. And many plans include Part D prescription drug coverage in the plan, so you do not need to enroll in a separate plan like you do with a supplement.
The cons?
Medicare Advantage plans are (mostly) managed care plans that use provider networks, such as PPO, HMO, and HMO-POS. This means you’ll need to receive care within your network. For some, this doesn’t cause any issues. However, if you travel a lot, have a second home in another state, or want more freedom to choose providers, you might find a Medicare Advantage plans to be limiting. A PPO plan would afford more freedom to go out of network, but you may pay more when you do.
Medicare Advantage plans do have low to no monthly premiums compared to Medicare Supplements, but you may have co-pays, co-insurance, and/or a deductible when you do seek care. Compared to the Medicare Supplement, this is a save now, pay later approach. This could be beneficial if you don’t go to the doctor often. But keep in mind, Medicare Advantage plans have a max out of pocket (MOOP) each year. This means you will not pay more each year than the amount of the plans MOOP. This is an important point to remember because as Medicare Supplement rates rise, specifically Plan F, the monthly premiums for your supplement plan could add up to more than your annual MOOP.
Finally, Medicare Advantage plans don’t have the same benefits from one carrier to the next, and they can change benefits and providers each year. That’s not necessarily a bad thing, but you will need to review your plan each fall to assess if you need to change plans for the following year. Therefore, using a licensed agent to help compare plans and benefits across carriers is important.
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There is a lot to think about when you are comparing Medicare Supplements vs Medicare Advantage plans. However, you don’t have to make these decisions alone! Our licensed insurance agents specialize both plans and can help you choose which option is right for you. Call us today and schedule a complimentary consultation.
