What Is The Difference Between Medicare Advantage and Medicare Supplement?
hat is the Difference Between Medicare Advantage and Medicare Supplement?
It is almost time for open enrollment and many find the Medicare program to be extremely complicated with a multitude of terms, policies and options. The government website that manages the plan tries to provide as much information as possible, but with hundreds of pages of explanation, it is still hard for the average person to understand the details. Before open enrollment begins, these tips will make it easier for you to understand some of the information you may find on the government site.
Four Basic Parts
Medicare has four different parts that are differentiated using a lettering system. Part A is hospital care, Part B is for doctors, medical procedures and equipment and Part D is for prescriptions. The issue is that these parts don’t cover everything due to deductibles, copays and other costs. If you become seriously ill, you could face major out-of-pocket expenses if you don’t have a plan that covers those gaps in coverage. That is where the fourth part of the program comes in, Part C, which is also known as Medicare Advantage. Your other option is to purchase a Medicare Supplement plan, also known as Medigap.
Medicare Supplement Insurance
Medigap coverage protects you if you purchased a traditional plan during 2019 Open Enrollment. Medigap plans charge an additional premium above what you pay for Part A, B and D, although many people receive Part A for free. However, even this is not a simple process as Medicare Supplement plans are offered in additional letter options, ranging from A through N. Each plan includes specific coverage that is determined by the federal government as well as additional coverage that varies with each letter. This means that premiums can vary as well. It is important to note that when the 2019 Open Enrollment period is over, Plan F will no longer be available for purchase and will not be offered during the 2020 Open Enrollment period.
An Advantage plan, which is Part C, may provide coverage at a lower cost than traditional plans. Instead of paying for A, B and D, you can enroll in a plan that covers more through a private insurance company. You pay the Medicare Advantage premium along with your Part B premium. Part C plans are more like the healthcare plans you had before retirement. Services such as office visits, lab work, surgery and more are covered with just a small co-payment. They could be offered as PPO or HMO network plans that place a yearly limit on what you must spend out-of-pocket. It is important to note that each plan has different benefits and rules. Most plans cover prescription drugs while some may require a referral from your family doctor to see a specialist. There are plans that will cover any doctor you see while others will only cover those in a specific network.
Parts A, B and D Coverage Only
A hospital visit for someone who only has Parts A, B and D would pay the first $1,364 of the stay and, after 60 days, begin paying a portion of the daily cost. If you visit the doctor with those plans, you would pay 20 percent of all costs after you met your $185 deductible and there is no cap on how much out-of-pocket you would need to pay. If you had to undergo bypass heart surgery, the bill could be as much as $85,891, according to the American Heart Association. Your portion of that bill after Part B paid would be $17,000. You could be required to pay 35 to 85 percent on prescriptions as well once you reach what is known as the “donut hole.” This is a period when Part D stops paying before picking up coverage again. After the 2020 open enrollment period, the coverage ends when you reach $3,750 in prescription costs and picks up again when you reach $5,000. During that time, you would be required to pay 25 percent of prescription costs. If you become seriously ill on year, the wrong coverage could result in thousands of dollars in bills. Medigap coverage helps protect you from those gaps or you can enroll in Advantage plans that offer better coverage.
You cannot purchase both an Advantage plan and a Medigap policy. There are three things to consider before choosing the right plan. Medigap coverage usually has a higher monthly premium but your out-of-pocket costs may be lower. Advantage plans cover more services and cost less over time. Advantage plans may limit you to specific doctors. Finally, Advantage plans often operate only in a specific region. If you live in New York during the summer and Florida during the winter, you may be better with a traditional plan. It is also important to know that this is different than Medicaid. Medicaid is designed for low-income families and, although senior citizens are eligible to apply for Medicaid, Medicare is only for those 65 and older or those who are disabled. Marketplace plans are also not the same as plans for the elderly.
When is Open Enrollment?
One of the questions often asked is “When is open enrollment?” The 2020 Open Enrollment period for the program starts on October 15 and runs until December 7, 2019. If you need to know what is open enrollment, it is the time when you can make changes to your coverage.
If you are considering enrolling in an Advantage or Medigap plan, visit EmployeeandMemberDiscounts.com to see if you are eligible for savings. Whether you are wondering what is open enrollment, need information on marketplace plans or are trying to find discounts on another plan, we can help. You can sign up for free and begin accessing the discounts immediately. Just fill out the easy online form or give us a call today.