Medicare Advantage Vs Medicare Supplements

For most people on Medicare, the two main options for insurance are Medicare Supplements & Medicare Advantage. If you are reading this, you may be curious, or even seriously thinking about changing from Medicare Supplement to Medicare Advantage. Who can blame you. Over the years Medicare Advantage plans have improved. They are widely advertised and becoming more popular. The reality, however, is often different than what’s advertised. It’s not that Medicare Advantage plans can’t be a good option. It’s more a matter of knowing the facts, weighing the pros & cons, and deciding what’s right for you. With that in mind, let’s dive a little deeper into those issues.

Between Medicare Supplements and Medicare Advantage, you can only have one or the other

What Is Medicare Advantage?

Medicare Advantage is when you receive all of your Medicare benefits through a private insurance carrier. Medicare Advantage plans do not supplement Medicare, they replace it and include all of your benefits in one plan. Medicare Advantage include doctor & hospital coverage, and will typically include extra benefits. These extra benefits can include; Prescription, dental, vision, hearing aids, and others. In many cases you can get these extra benefits for little or no extra monthly cost to what you pay for Medicare A & B. This is the main appeal of Medicare Advantage. Let’s take a closer look by examining the pros & cons.

Pros

  • You can get more benefits for little or no extra monthly cost (You still pay a Medicare premium). These benefits can include prescription, dental, vision, medical cost protection, and others. If you currently have a Medicare Supplement, changing to Medicare Advantage could significantly lower your monthly cost of insurance (It could raise your medical liability though, see cons).
  • All benefits are provided in one plan through a private insurance carrier.

Cons

  • Depending on the type of medical care you receive while covered by your plan, you may have copays or co-insurance. The copays can be minimal for the basic stuff like doctors visits, however, can be higher for things like hospital stays or treatment for a serious condition. Generally, Medicare Advantage plans have higher medical costs liability than Medicare Supplements.
  • Medicare Advantage plans have doctor & hospital networks and some plans may require referrals to see specialist doctors. More & more doctors & hospitals are accepting Medicare Advantage. You will just want to verify whether your doctors / providers are in the plan or be flexible on them.

What Are Medicare Supplements?

Medicare Supplements are insurance policies that are secondary to Traditional Medicare A & B and are provided by private insurers. Medicare Supplements enhance your coverage by helping you pay for medical deductibles and coinsurance, which helps keep your out of pocket costs very low each year. Even if you aren’t using medical care very often right now, it can benefit you with the peace of mind knowing that if something happens, your costs will be very low. Let’s take a look at the pros & cons of Medicare Supplements.

Pros

  • For the most popular plans you have very low (sometimes none) out of pocket medical cost liability. The most popular plans include F, G, and N.
  • There are no networks of doctors & hospitals or referrals required. You can choose to see any medical provider without the concern of in or out of network.

Cons

  • You pay a monthly cost that is in addition to what you pay for Medicare A & B, which some people cannot or do not want to pay. The monthly cost is most often more than Medicare Advantage.
  • Medicare Supplements generally only provide medical coverage. So, for pharmacy, dental, vision, and others; You will need separate plans.

Medicare Supplement & Medicare Advantage Comparison Snapshot

Here is a side by side comparison of the general features & benefits of these two main types of coverage.

Medicare Supplement & Medicare Advantage General Features Comparison
Medicare SupplementsMedicare Advantage
Medical CoverageFor the most popular plans you have very low, or no, out of pocket costs for medical care.You typically have copays for medical care. The basic stuff has lower copays, however, things like hospital stays or certain treatment may cost you more.
Monthly CostYou pay an additional monthly premium over and above what you pay for Medicare A & B. Premiums vary based on the plan and other attributes.You pay $0 or little extra than what you pay monthly for Medicare A & B. Medicare Advantage are typically less expensive monthly than Medicare Supplements.
Doctor & Hospital Choice
There are no networks. You can see any doctor or hospital who accepts Traditional Medicare.There are doctor & hospital networks. You will just need to verify your doctors & hospitals are covered or be flexible. Many doctors & hospitals accept Medicare Advantage.
Prescription Pharmacy BenefitsYou need to buy a separate plan for pharmacy benefits.Pharmacy benefits are often included.
Dental, Vision, Hearing Aid, & Gym BenefitsNot included with Medicare Supplements. Some or all of these benefits may be purchased through a separate policy.Some or all of these benefits are often included with Medicare Advantage. The levels of coverage and benefits vary based on individual plans and your service area.
Best ForThose who want the most medical coverage and freedoms and are willing to pay extra for it.Those who want more coverage and benefits while paying little or no extra for them. Willing to pay copays for healthcare when they come and use doctors & hospitals under the plan.

*This chart is best viewed on a computer or tablet device.

Conclusion & Important Considerations

  • Both Medicare Supplements & Medicare Advantage can be good coverage. Making a change to Medicare advantage may be the right thing to do.
  • If you are curious or thinking about changing to Medicare Advantage; Understand the pros & cons and determine if it could be right for you vs. the Medicare Supplement package you currently have.
  • Prior to making the change, understand & weigh the benefits & risks of the specific options presented to you. Get recommendation and guidance from your Agent.
  • Medicare Supplements do not have an annual open enrollment period. If you change from a Medicare Supplement to an Advantage Plan, you will more than likely need to answer health questions on the application. This can be fine as long as you don’t have or didn’t recently have a serious condition, however, it may also prevent you from changing back.
  • If your biggest concern with your Medicare Supplement is the monthly cost, yet, you still like the coverage. If you’re eligible, you may want to consider replacing your current policy with another Medicare Supplement. This option could save you money on your monthly costs while allowing you to keep the same type of insurance.

Medicare Supplements do not have an annual open enrollment period. If you change from a Medicare Supplement to an Advantage Plan, you will more than likely need to answer health questions on the application. This can be fine as long as you don’t have or didn’t recently have a serious condition, however, it may also prevent you from changing back.