The Big Question- Should you pick a Medigap or an Advantage Plan?

Let's quickly review- Medicare gives you essentially two roads to go down:

Option 1:  Original Medicare A & B,  + a Medigap plan  + a Part D plan  + Dental / Vision if desired

Option 2:  Medicare Advantage- a Medicare health plan offered by a private company that contracts with Medicare to provide you with all your Part A and Part B benefits, and usally part D. 

Why Pick a Medigap (Supplement) policy?

1. You have a free shot for guaranteed approval when you first take Medicare part B, for 6 months. Outside of this 6 month window, you would need to pass all of the health underwriting questions to buy a Medigap policy, meaning you can be denied based on prior health history and pre-existing conditions.

2. Predictable out of pocket cost - one of the biggest reasons for buying a Medigap is because it covers most or all of the 20% of what you normally must pay (remember Medicare B only pays 80% of medical costs) and all of the hospital cost. This gives peace of mind knowing that nearly all Medical care will be fully covered by insurance, with no surprise copays or bills in the mail.

3. No Network - unlike Medicare Advantage, which is usally an HMO or PPO type of plan, a Medigap policy allows you to see any doctor, nationwide, who accepts Medicare. This flexibility in choosing providers is a great benefit, and limited provider networks can be a real pain point for Medicare Advantage.

4. No Prior Authorization - whereas normal individual insurance and Medicare Advantage plans have pre-approvals and prior authorization requirements, Medigap does not. This means you can get the treatment that you and your doctor feel is best without any hassle from an insurance company denying it and making you jump through hoops and request appeals.

5. Medigap policy benefits stay the same each year - a plan G is always a plan G, same with plan N, etc. The only thing that changes is the price (Medigap prices are based on your age, so they rise each year). Compare this to Medicare Advantage, which has dozens of plan options that each change each year, sometime dramatically!

Ok, so why doesn't everyone just go with Medigap- it sounds like great insurance! Well, it is! It's probably the most comprehensive health insurance you've ever had. The reason is price- Medigaps can get expensive as the price rises each year based on age, and you are paying the premiums every month, whether you use it or not. 

Why Consider a Medicare Advantage Plan?

1. Medicare Advantage is often a $0 plan premium - depending where you live, you may have several $0 premium plans to choose from. For a healthy person who rarely gets medical care, this is attractive compared to paying an additional premium every month for a Medigap.

2. Pay as you go - Medicare Advantage has copays for various medical services, so you will have medical bills, but only for what you use. If you are generally in good health, the years of paying minimal copays each year compared to Medigap may outweigh the higher copays incurred once you have health issues. It's a game of risk - in the long run you may come out ahead, but then again you may not! 

3. Dental Vision and Hearing are usually included - compare this with Medigap, which only covers what original Medicare covers, and Medicare does not cover dental, vision or hearing. 

4. Advantage plans often include extra benefits like gym memberships, over the counter allowance for items like vitamins, tylenol, etc and perks like that. Not core medical benefits, but these things do attract people to this kind of plan.

5. Ability to shop plans every year - this could be a pro or a con, but to some it is nice to have the ability to shop each year and choose a plan with richer benefits if one is available. Currently there are plans with a part B Giveback, plans with rich dental benefits, etc. 

That's a brief overview- watch our video on this topic for more info and schedule a phone call with Jonathan Shinkle to get a professional reccomendation for your unique situation!