Your One Big Decision With Medicare — Supplement or Advantage?

Medicare seems very confusing and to the average person, it is. Add in misleading advertising, input from friends and the amount of mail you receive, and it seems like a jungle. There’s a ton of information and misinformation available right at your fingertips and trying to make sense of it all requires work and research. There are plenty of variables, special situations and timelines that come into play when transitioning to Medicare but when it comes down to it, it’s mostly a straightforward process. You sign up for Part A and Part B, once you have those in place you make your one big decision. Do you sign up for a Medicare Supplement or a Medicare Advantage Plan? We’re going to highlight the key features of each of those types of plans and typically, who would choose what.

Medicare Supplement Plans — Main Features

Sometimes referred to as Medigap Plans. Medigap = Supplement.

Sold by private insurance companies.

No Network Restrictions — Visit any Doctor or Hospital nationwide that accepts Medicare assignment. No referral required.

• This is one of the main selling points of a Medicare Supplement plan. This feature works great for people who travel often or who live in multiple parts of the country throughout the year.

No Coverage for Prescriptions — You need to purchase a standalone Part D plan with a Medicare Supplement.

• Medigap plans do not cover your drugs. Part D plans vary by region and the most cost-effective plan for you is determined by your medications and which pharmacy you prefer. Part D plans typically range from about $12-$100+/month.

• Part D plans can change from year to year. It’s important to review your plan during the Annual Enrollment Period from Oct 15th — Dec 7th. You can switch to another plan during this time if need be.

Pay Up Front — Supplement Plans are typically higher cost per month with less out of pocket expenses for Medical services.

• Depending on where you live and which plan you choose you can expect to pay in the ballpark of about $100-$270+/month for a Medicare Supplement plan. This cost is in addition to your Part B premium and your Part D premium.

Standardized — Supplement Plans are classified by letters; A-N.

• For example, Plan G from Company 1 has the same exact benefits and coverage as Plan G from Company 2. You’re essentially shopping for the lowest monthly price.

• Massachusetts, Minnesota and Wisconsin have their own, state specific Medicare Supplement plans so the rules and benefits differ in those states.

Benefits Don’t Change — Medicare Supplement plan benefits will not change from year to year.

• Most people will keep their Supplement for life, granted it remains affordable and sensible.

Secondary to Medicare — With a Supplement plan; Medicare is billed as your primary coverage; your Supplement is billed secondary. Leftover costs are your responsibility.

• Medicare Supplement plans work in conjunction with your original Medicare (Parts A+B). When you visit a doctor you will present both your red, white and blue Medicare Card and your Medicare Supplement Card.

Foreign Travel Coverage — Some Supplement plans include coverage for emergencies while travelling abroad.

We usually recommend Supplemental plans to people who have major health needs or who are managing a chronic condition. This is because Supplement plans greatly reduce the out of pocket costs associated with care. These plans also work well for folks who travel often or who live in multiple parts of the country throughout the year. Since there are no network restrictions or referrals, these plans allow people to receive care wherever they may be.

Medicare Advantage Plans — Main Features

Sometimes referred to as Part C. Part C = Advantage Plans

Private insurance companies combine your Part A, B and D into an all-in-one managed care plan.

• Centers for Medicare and Medicaid Services (CMS) approves and oversees all Medicare Advantage plans. They are required to cover every service approved by Medicare.

Networks and Referrals Required — Advantage plans are typically structured as HMO’s and PPO’s.

• These types of plans typically require you to elect a Primary Care Physician, who essentially manages your healthcare. If you want to see a specialist, you will need a referral from your PCP. Some Advantage plans do allow you to go out of network electively, usually at a higher cost.

• Most plans limit you to a certain region or county which is considered “in-network.”

Pay as you go — Medicare Advantage plans are typically lower cost per month.

• Some plans start at $0/month. The trade off is with out of pocket costs. You will have co-pays and co-insurances for services. You still must pay your Part B premium.

Maximum amount you can spend — Advantage plans have a Maximum out of Pocket (MooP).

• If for example you buy an Advantage plan with a MooP of $5000, the most you would spend in terms of copays and co-insurance throughout the year would be that amount. Once you meet that, you’re covered 100%. Prescription costs do not factor into your MooP.

• If your Advantage plan has an out of network benefit, you may have an in network MooP and a separate out of network MooP.

Usually include Prescription Coverage — Most Advantage plans include coverage for your Prescriptions.

• You still pay copays for your medications, but the coverage is baked into the plans premium price.

• It’s important to check your medication costs before signing up for any Medicare Advantage plan. Just because a plan could be $0/month doesn’t mean it’s the most cost effective.

Vary by state and region — Advantage plans are specific to state, region and sometimes county.

• There are a wide variety of Advantage plans available throughout the country. States, regions and counties have their own Advantage plans that are specific to those areas.

• If you plan to purchase a Medicare Advantage plan, make sure you’re allowed to sign up based on your location.

Can change from year to year — Advantage Plan costs, benefits, availability and features can change from year to year.

• If you pick a Medicare Advantage plan it’s important to review your plan during the Annual Enrollment Period from Oct 15th — Dec 7th. During this time, you can switch to a different Advantage plan if need be.

Primary Coverage

• Medicare Advantage Plans combine your Part A, B and D into an all-in-one plan. For that reason, these plans are your primary and only coverage. When you go to the doctor’s or the pharmacy, you use your Advantage plan card only. However, you should still save your red, white and blue Medicare card.

Can Provide Extra Benefits that are not covered by Medicare — Some Advantage plans may include coverage for Dental/Vision along with some other benefits.

• Dental and Vision coverage are not covered by Original Medicare. Advantage plans often include extra coverage for those services, sometimes at no extra cost.

• They may also include things like discounted gym memberships, eyewear reimbursements or fitness benefits like exercise classes, among other things.

Emergency Coverage Nationwide and Abroad — Medicare Advantage plans are required to provide coverage for emergencies while travelling.

We usually recommend Medicare Advantage plans for people who are in good health or those who stay local. If you’re just going to the Doctor for routine checkups and not taking many medications, an Advantage plan may make the most sense because you end up saving a lot of money monthly. It makes little financial sense to pay $300+/month for a Supplement Plan if you’re not going to be using it. If something major did happen, you have the peace of mind of knowing that there’s a maximum amount you’ll spend out of pocket.

When it comes down to it, this is your one big decision with Medicare. Do you choose a Medicare Supplement with a standalone Part D plan? Or, do you enroll into a Medicare Advantage plan? Once you can cut through the clutter the decision becomes a bit more digestible. We would still recommend meeting with a licensed professional to help you make your final decision. You may also have other options available to you based on your employment or various other factors. We’re happy to help sort through these options with you here at Doctor’s Choice. Please reach out or comment if you have any questions, or if you think we can help with your transition to Medicare. As always, thanks for reading!

About Doctor’s Choice:

Doctor’s Choice is the premier service advocate for Medicare, making healthcare transitions easy for employers and their employees. Founded by a Brown University-trained Physician, they deliver best-in-class service to seniors before, during and after their transition to Medicare. Offering coverage across the country and tech-enabled personalized guidance through their Turbo Medicare Roadmap, Doctor’s Choice provides concierge-level service and healthcare advocacy to our members for life. For more insights on retirement trends and employer strategies for an aging workforce, follow Doctor’s Choice on LinkedIn @DoctorsChoice, Twitter @DoctorsChoiceU, and Facebook @DoctorsChoiceUSA.