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Medicare Advantage Plans vs Medicare Supplement Plans

You have turned 65 or have decided it’s time to retire, leave your employer coverage and sign up for Medicare. After enrolling into Original Medicare Part A and Part B you have decided you need more coverage. You want to have an annual maximum out of pocket cap on your medical costs. However, which additional coverage is best. 

Your two primary choices are to either purchase a Medicare Supplement insurance plan from an insurance company or to enroll into a Medicare Part C, Advantage Plan. Here is a quick, general synopsis of the differences between them.

With a Medicare Supplement insurance plan there is a guaranteed issue period upon first becoming eligible for Medicare. These policies are cannot be denied and the only medical question asked centers around tobacco use. After this guaranteed issue period has passed you can still purchase a supplement plan you will have to go through underwriting. There are 14 different supplement plans available, however, not all of them are currently available to everyone. Once you purchase a supplement plan you are guaranteed renewal each year, no matter what health conditions develop. These plan premiums do increase each year and are typically based on your age and zip code (area you reside).

A supplement insurance plan will cover some, most or all of what original Medicare does not, depending on the plan selected. However, these plans will only cover the medical services approved by original Medicare. If Medicare does not cover the procedure then neither will the supplement. 

Medicare supplement plans do not offer prescription drug coverages, requiring you to purchase a separate Medicare Part D drug plan.

The other option is to enroll into Medicare Part C: Advantage Plan. With an Advantage plan you will receive your Medicare benefits from the carrier whose plan you selected. There is no medical underwriting required, these plans are guaranteed issued as long as you are enrolled in Medicare Part A and Part B. These plans are typically network based and vary from region to region. All Advantage plans have a maximum out of pocket expense and most carriers offer a $0 premium plan depending on your region. These plans are categorized as a pay-as-you-go plan. You will possibly have deductibles and co-pays, most plans include the prescription drug coverage and added benefits not covered by original Medicare. These benefits can vary from carrier to carrier and should be considered when selecting which Advantage plan is right for you. Most plans now offer some hearing, vision, dental benefits along with gym memberships, over the counter benefits and various other items. Depending on the plan selected you may need doctor referrals and authorizations on medical procedures. Advantage plans are rated and monitored by CMS (Centers for Medicare and Medicaid Services) by a star rating system, 1 through 5 with 5 being the highest overall rating.

Regardless of which direction you select, both of these options place a limit on your out of pocket medical expenses. When making your selection you should consider your current health condition, how you plan to use your health insurance, your attitude toward insurance and your financial condition.

Some people will say that supplement plans are for wealthy people because they can afford the premium; another outlook, if they have the maximum amount of money at risk on hand, why pay insurance premiums. They can self insure.

Poor people need the supplement plans because they can’t afford to pay a large medical expense; another outlook, can they afford the premium.

Ask yourself these questions, do you want to pay higher insurance premiums and have little to no deductible? Or, do you want to pay as little as possible, pay-as-you-go knowing there is always a cap, maximum on your medical bills? 

Are the other things that Medicare doesn’t cover important to you and if they are what are the costs and options for obtaining those services.

Medicare can be confusing, we suggest you talk with someone who market both types of options and represents multiple carriers. Their recommendations can be focused on your needs instead of the limitations of their products. For a FREE eBook on Medicare go to select eBook or call 682-292-9222.