Medicare Advantage vs Medicare Supplement | What is the Best for You?

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This blog examines the differences between Medicare Advantage vs Medicare Supplement: Get the Best Choice Now. It also looks at the advantages and disadvantages of each plan and certain factors that you should think about before making a decision. Original Medicare (Medicare Part A and Medicare Part B) or Medicare Advantage (Medicare Part C) are the two options for beneficiaries. When you keep your Original Medicare Part A and Part B, extra coverage is probably a good idea. Such as a Medicare Supplement plan and/or a Medicare Part D prescription drug plan.

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Make Sure You have the Best Medicare Plan for You

On the other hand, if you’re looking for a Medicare Advantage vs Medicare Supplement, you may be uncertain which one is right for you. This would be determined by personal circumstances, medical conditions, financial situations, and other considerations. Medicare is the federal health insurance program for people who are turning 65 or older.

In this piece, we need to know a few words that are important to consider when deciding on the best insurance plan:

First, let’s look at a page from Medicare’s official handbook called Medicare and You. This page outlines your two Medicare options. As you can see on one side of the page, it outlines Original Medicare. Next, you can see the two boxes checked for Medicare Part A and Medicare Part B. Below that; you can see Medicare Part D and Supplemental coverage. Both come with additional costs. Supplemental coverage is referring to Medicare Supplement insurance, also called Medigap. When you are ready for more information on Medicare Supplements, you can visit one of my blogs on Medicare Supplements.

Medicare Advantage vs Medicare Supplement
Medicare Advantage vs Medicare Supplement

How does Medicare Advantage vs Medicare Supplement compare to Original Medicare?

Medicare Advantage is a replacement for Original Medicare. All Medicare Advantage plans cover Medicare Part A and Medicare Part B services. Most plans also include coverage for Medicare Part D prescription plans and extra benefits. The extra benefits usually include dental, vision, and hearing coverage. Still, they can include a laundry list of extras, including monthly benefits to spend on over-the-counter items at the pharmacy or meals brought to your home after a hospital stay. I even have a plan that will help pay to board a pet in case you are an inpatient in the hospital. These are just a few examples. One of the greatest benefits I find with Medicare Advantage is the maximum out-of-pocket exposure. This dollar amount can be different with every plan, but I have some with a maximum out of the pocket of $1000 or less. 

Getting To Know Original Medicare

The ability to select any doctor who accepts Medicare is a primary advantage of Original Medicare, which requires Medicare Part A and Medicare Part B. In the comparison of Medicare Advantage vs Medicare Supplement, one of the key aspects of Medicare Advantage is the potential reduced monthly costs. Original Medicare consists of Medicare Part A (hospital insurance) and Medicare Part B (medical insurance). The majority of Medicare Part A recipients are exempt from paying a monthly premium, while Medicare Part B has a monthly premium of $148.50 (2021). Many with a higher income, on the other hand, incur higher Medicare Part B rates. With Original Medicare, you can choose any provider that accepts Medicare. This is over 90% of all providers. Examples of coverage are, and this certainly not an all-inclusive list, but some examples are:

Medicare Part D Prescription Drug Coverage

Separate Medicare Part D prescription drug coverage can be purchased. Private health insurers that have been approved by Medicare offer Medicare Part D prescription drug policies. A few medications, though, could be covered by Medicare Part B if they are administered by the doctor. 

Medicare Advantage vs Medicare Supplement (Also Called Medigap)

A Medicare Supplement package works in accordance with Original Medicare to cover out-of-pocket expenses that Original Medicare does not cover. Supplements can only be used in association with Original Medicare and cannot be used in accordance with a Medicare Advantage plan.

Medicare Part A Coverage

Hospitalization is covered by Medicare Part A. This covers hospital inpatient services, skilled nursing center care, hospice care, and home healthcare. It excludes custodial or long-term treatment. You can see the Medicare Part A deductible in 2021 is $1,484 per benefit period. This $1,484 deductible covers you for the first 60 days in the hospital. You are responsible for $371 per day for days 61–90 of each benefit period while an inpatient in the hospital. $742 per “lifetime reserve day” after day 90 of each benefit period (up to a maximum of 60 days over your lifetime).

Next is the Skilled Nursing Facility stay costs. In 2021, you pay $0 for the first 20 days of each benefit period, $185.50 per day for days 21–100 of each benefit period, and All costs for each day after day 100 of the benefit period. If you max out the full 100 days in the skilled nursing facility, you are responsible for $14,840. Now that is just your potential costs for Medicare Part A.  

What is covered by Medicare Part B?

Medicare Part B is our outpatient service. It is easiest to think of Medicare Part B as covering us when we go into a building and come home the same day. Now, this isn’t 100 percent correct, but it is a good rule of thumb. Medicare Part B will also cover us for doctor visits while an inpatient in the hospital. I bring this up because many people are unaware that all of their services will be covered while in the hospital if they only have Medicare Part A. This isn’t the case. 

I want to give you an example from the Medicare document Are You a Hospital Inpatient or Outpatient? It states on the second page, “Medicare Part B (Medical Insurance) covers most of your doctor services when you’re an inpatient. You pay 20% of the Medicare-approved amount for doctor services after paying the Part B deductible.” So, in my opinion, it probably is a good idea to have Medicare Part B as well. Notice it mentions a Part B deductible and 20 percent of the Medicare-approved amount. 

Medicare Advantage vs Medicare Supplement

Part B Deductible | Medicare Advantage vs Medicare Supplement

This 20% is the 20% coinsurance we hear so much about usually in television commercials. In 2021 the Part B deductible is $203. You pay the first $203 of your Medicare Part B claims. You don’t pay the first $203 of each Medicare Part B claim, just the first $203 overall. Now we get to the potentially very costly portion. That is 20%. There is no maximum you could be responsible for. If you are on chemotherapy treatment, for example, you are responsible for 20% of all Medicare-approved amounts. There is no maximum cap you are responsible for, and then Original Medicare picks up 100% of the costs. Medicare Advantage plans have a maximum out of pocket. These potentially high costs of Original Medicare and lack of extra benefits can make it unattractive to some. 

Is a Medicare Supplement plan right for you?

There is an easy solution to cover the potential high out-of-pocket Medicare Part A and Medicare Part B costs. That is simply getting a Medicare Supplement plan called a Medigap plan to pay what Medicare doesn’t pay. A Medicare Supplement plan can pay every single deductible and copay the Medicare doesn’t pay. However, generally, I don’t recommend that plan. I generally recommend plans with some cost-sharing for you to be responsible for. 

How a Small Deductible Can Save You Big Money On Premiums

It just makes sense for you to be responsible for a small deductible or a small copay to see the doctor or go to the emergency room. This is similar to having a deductible for your car insurance or home insurance. We all have deductibles. Why? Because it just makes sense to have a little money come out of our pocket when we use it, and in exchange, we get to save on our monthly premiums and save money in the long run. 

Medicare Part B also includes durable Medicare equipment such as, but not limited to:

The following items and programs are not covered:

For more information to get dental, vision, and hearing coverage; CLICK HERE or Below

Medicare Supplement vs Medicare Advantage Plans: MA Overview

Medicare Supplement is one avenue, the other to investigate is a Medicare Advantage plan. In comparison, one of the key advantages when comparing Medicare Advantage vs Medicare Supplement is when a Medicare Advantage plan has the potential for a reduced cost. Notice I said potentially reduced costs. In general, a Medicare Advantage plan can cost you less. Still, in certain circumstances, if your Medicare Advantage has a high Maximum out-of-pocket or other high copays, it could likely cost you more than Original Medicare with a Medicare Supplement. Over the last few years, we have seen that Medicare Advantage plans maximum out of pocket have gone down substantially. Like I said earlier, we have some plans with less than a $1000 yearly maximum out of pocket.

Every Medicare Advantage plan has all that Original Medicare includes. Some policies also have additional coverage, such as:

Considerations when selecting a Medicare Advantage plan

With all of the improvements being made to the Medicare policies on the market, it can be difficult to determine which coverage is right for you. The below are some items to check for in a Medicare Advantage plan:

How does Medicare Advantage work?

Here is how a Medicare Advantage plan works. Most Medicare Advantage plans that I help my clients pick are $0 monthly premium plans with a $0 deductible. It is important to mention that you must always pay your Medicare Part B premium to keep your Original Medicare or get a Medicare Advantage plan. I get asked a lot, “Chris, if I get a Medicare Supplement or a Medicare Advantage, do I still have to pay the Part B premium?” The answer is an absolute yes. We know the government Uncle Sammy isn’t going to miss out on this money. Medicare Advantage plans have a list of copays you are responsible for.

HMOs (Health Maintenance Organization) and PPOs (Preferred Provider Organization) are types of Medicare Advantage plans. HMOs, in general, do not allow their members to access hospitals and physicians outside of their service networks (unless you are having an emergency). On the other hand, a PPO allows its users to get treatment outside of its network, but you will likely have high out-of-pocket costs. Most Medicare Advantage programs require prior approvals for special treatment or other treatments and referrals by a primary care specialist.

Which Is Better: Original Medicare or Medicare Advantage?

Since everyone’s health status is unique, it isn’t easy to offer a clear response, particularly because both Original Medicare and Medicare Advantage can have varying degrees of coverage. With this in mind, there are many things to weigh when choosing coverage, including your health status and even travel. Original Medicare with a Medicare Supplement could be the best choice if you travel around the country regularly because it would not restrict your coverage to a single service region. Like a Medicare Advantage HMO plan. With Original Medicare, you can see any doctor, hospital, provider, etc., that accepts Medicare, and you don’t need a referral. 

If you plan to travel outside of the country, Original Medicare doesn’t have any coverage outside of the United States. However, certain Medicare Supplements and certain Medicare Advantage programs may offer coverage in emergencies outside of the United States. If you want additional coverage that Original Medicare does not usually have, such as dental, vision, or hearing, a Medicare Advantage package might be worth considering. You could also keep in mind that you must first be enrolled in Original Medicare before you can enroll in a Medicare Advantage plan or Medicare Supplement plan.

Expenses to Consider When Choosing a Medicare Advantage Plan

One of the most significant aspects to remember when selecting the right Medicare Advantage plan is the cost. Here are some examples to look at when shopping costs for a Medicare Advantage plan.

Depending on your home state, these costs can differ greatly. Any deductible listed is the amount you would spend out of pocket before your insurance coverage kicks in. Any out-of-pocket limit listed is the total cost you can pay for medical services that would be covered under Part A and B of Medicare over the course of a year. Evaluate these expenses, as well as how much you will need to refill prescription medications or make office calls while calculating your plan costs. Consider the future costs of specialists or out-of-network visits in your decision-making as well. 

Medicare Advantage

Medicare Advantage, according to the US Government Accountability Office, has several advantages. Since most policies cover prescription medications, they provide all-in-one coverage. The policies have an annual out-of-pocket spending cap, also known as a maximum out-of-pocket (MOoP). Extra services, such as dental insurance, can be included with Medicare Advantage programs that are not available in Original Medicare or most Medicare Supplement plans. Medicare Advantage premiums can be as low as $0 per month. Some programs may also give a Part B premium reduction. Meaning by having a particular Medicare Advantage, the company may pay a portion of your Part B premium on your behalf.   

The biggest drawback of Medicare Advantage programs, in my opinion, is that they limit a person’s provider options as compared to Original Medicare. With Medicare Advantage HMO you must choose doctors and hospitals from the network of the plan. With a PPO Medicare Advantage there is also coverage outside of the network, but in most instances that comes with a higher deductible, coinsurance, and copays.

Medicare Advantage Vs Medicare Supplement: Get The Best Choice Now! Conclusion

When it comes to selecting the right Medicare package, there is no such thing as a one-size-fits-all solution and everybody has varying incomes, desires, and goals. Despite the fact that there are other factors to consider. The decision may come down to balancing the flexibility of Original Medicare versus the potential financial advantages of Medicare Advantage policies. An individual should participate in the plan that is better for them after carefully weighing the benefits and drawbacks.

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About The Author — Christopher Duncan

Hi, I’m Chris Duncan, the owner here at Trusted Benefits Direct. I’m an independent insurance agency. I help those already on Medicare and new to Medicare get the education they need about Medicare to make the best choice for their needs for best Medicare Supplements, Medicare Advantage, Medicare Part D prescription drug plan, dental vision, and hearing plans, cancer insurance, final expense life insurance, protecting retirees retirement and more. I gain new clients through education and not selling. If you want to call a vast number of call centers or an insurance company directly and be told what to do or be sold, notice the word told and the word sold rhyme, then I’m not a good fit for you.

However, If you want an objective perspective on all your options, I am an excellent fit for you. Also, if you find value in this blog, please do me a favor and share this with your friends. I do not work for insurance companies; instead, I work for you, and all of my resources are provided at no cost. You can reach me toll-free at 800-910-3382, or you can get a free Medicare Supplement Quote at medicareratequote.com. In addition, you can fill out my contact form on my main website www.trustedbenefitsdirect.com. 

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