Medigap vs Medicare Advantage: What are the Key Differences?

Many people look forward to getting Medicare when they turn 65, but they often don’t realize how many options there are! Original Medicare has two parts: Part A is hospital insurance and Part B is medical insurance. After you pay your deductible, Medicare pays its share and you pay yours. 

But there’s more to Medicare than this. Medicare Advantage, also called Plan C, is an alternative to the original Medicare plans. It bundles Part A and Part B, offering more complete coverage. A second option is supplemental insurance (Medigap) which helps cover coinsurance, copays and deductibles to lower your out-of-pocket costs. 

As you consider your options for coverage, here are the key differences between Medigap and Medicare Advantage plans. You can’t have both, so you must choose wisely. 

What is Medicare Advantage? 

Medicare Advantage plans are typically funded by private insurance companies approved by Medicare. These plans offer Part A and Part B coverage, along with dental, vision, hearing and wellness programs. Most Medicare Advantage plans also cover Part D, which is prescription insurance. 

What is Supplemental Insurance (Medigap)? 

Medigap plans fill in the gaps of Original Medicare. This additional health insurance can be purchased from private insurance companies and is available through 10 different plans. Premiums vary depending on the plan you choose, but the benefits stay the same regardless of the insurer. 

While these plans are more expensive, they significantly extend hospital, skilled nursing and travel coverage. They also pay for some or all of deductibles, copayments and coinsurance. However, Medigap plans do not include prescription drug coverage. 

Which is Better: Medicare Medigap or Medicare Advantage? 

If you’re not comfortable paying the premiums for Medigap plans, Medicare Advantage may be a suitable option for you. With these plans, you can get more coverage, including vision and dental. Medigap rarely covers extra services, so you’ll need to purchase different coverage or pay out of pocket for these services. 

On the other hand, if you are comfortable paying a Medigap premium, we generally recommend these over Medicare Advantage. Here’s why. You have complete freedom to see the doctors of your choice (Advantage works more like an HMO), you don’t need authorizations or referrals for medical services and you’ll have little to no out-of-pocket costs. 

Contact Us Today to Learn More About Medigap Plans
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Leonard Financial Solutions will help you make an informed choice when it comes to Medicare. Contact us today and we can go over your options. With us, you’ll find the best policy to suit your needs, budget and lifestyle. Isn’t this what you deserve after all your working years? We sure think so!