Do You Know the Difference Between Medigap and Medicare Advantage?

Both “Medigap” and Medicare Advantage plans are often referred to as “supplemental insurance” plans in Medicare articles and literature.  This language is confusing and somewhat misleading. Do you understand the difference?

Nicknamed “Medigap,” it is technically the only real “supplemental insurance”; its formal name is Medicare Supplemental Insurance. Only people enrolled in traditional Medicare can use a supplemental insurance plan.

Medigap is NOT a government run plan. Medigap is private insurance. You can buy it to defray some or most of your out-of-pocket costs. These might include:

• The hospital deductible for Part A, which is currently $1,100 for each hospital benefit period.
• Part B costs such as the percentage you pay for doctor’s visits and outpatient services.
• The costs of emergencies up to plan limits you incur when traveling overseas.
• Other costs as defined by the plan.

There are 10 types of medigap policies, and they are legally standardized, which means that the benefits you get are the same, regardless of who sells them to you.

However, that does not mean you will receive the same price from each insurer so it’s a good idea to check around. To compare the benefits in each Medigap plan, enter your zip code at Medicare Solutions.com to get started.

Medicare Advantage is an umbrella name for a VARIETY of private health plans which include HMOs, PPOs, PFFS (Private Fee For Service plan.)

Medicare Advantage, called “Medicare Part C” is an alternative to the traditional Medicare program. Those who enroll in Medicare Advantage may NOT purchase a Medigap plan or a stand-alone prescription drug plan.

Each Medicare Advantage plan covers all the same benefits as traditional Medicare (called “Part A” and “Part B”), but the plans operate on the copayment system and may offer extra benefits. Sometimes the copayments are lower than traditional Medicare, and sometimes not. Each plan is different.

For example, some plans may include vision and hearing services, and include prescription drug coverage at no additional cost. However, most plans will require you to go to in-network doctors, or to pay high co-pays if you go out of network.

To compare Medicare Advantage plans, go to Medicare Solutions.com and enter your zip code to begin.

Unfortunately Original Medicare does not usually provide adequate coverage for all. The expenses that are not covered by Medicare can be covered by a Medicare Supplemental Plan, or Medigap. Medicare Supplemental Plans are designed to supplement Original Medicare and are provided by private health insurance carriers and can help to cover expenses such as coinsurance, copayments, and deductibles.

You may be able to choose from up to 12 different standardized Medigap policies. Medigap policies must follow Federal and State laws. Each plan, A through L, has a different set of basic and extra benefits depending on your health care needs but each policy must offer the same basic benefits no matter which insurance company sells it. However, Medigap policies do not cover long-term care, vision or dental care, hearing aids, eyeglasses, and private-duty nursing.

What you need to know to buy a Medigap policy

• You must have Medicare Part A and Part B
• You pay a premium for your policy to the private insurance carrier

- As long as you pay the premium, your insurance company can’t cancel your Medigap policy.