One of the most important Medicare-related decisions you will have to make, is to stay with Original Medicare plus a Medicare Supplement plan, or to enroll in a Medicare Advantage plan. 

Many of us have been sheltered from the unpleasant reality of health insurance by our employer health plans and have not had to navigate this complexity.

Medicare Supplement Plans or Medigap

Medicare Supplement Insurance policies are also referred to as Medigap policies.  You must have both Part A and Part B of Original Medicare to be eligible for a Medicare Supplement.

Original Medicare, Part A and Part B, covers your expenses related to hospital coverage and most other outpatient medical services.  However, Original Medicare does not cover all your medical expenses. Medicare Supplement plans are sold by private insurance companies which can help pay some of the remaining cost of Original Medicare, such as copayments, coinsurance and deductibles. Some Medicare Supplement plans may offer coverage that Original Medicare does not cover, such as medical care when you travel outside the U.S.

In this scenario, Original Medicare, Part A and Part B, is your PRIMARY INSURANCE COVERAGE, and your Medicare Supplement is your secondary insurance coverage.

Medicare Supplement plans are sold through private insurance companies which can only sell you a “standardized” policy which is in most states is identified by letters A through D, F through G, and K through N. All companies and policies offer the same benefits as they must meet federal and state laws designed to protect you. In Massachusetts, Minnesota, and Wisconsin, Medigap policies are standardized in a different way.  

Here are some of the advantages of a Medicare Supplement Plan

. More choice of doctors and facilities.  You can go to any doctor or other health care provider, hospital, facility in the country that participates with Original Medicare. These plans are NOT network-based, or state specific.

. You do not need referrals to see a specialist, and you are not required to have a primary care doctor.

. Options are less confusing. There are 10 types of plans that are the same across the country. That makes it simpler to figure out which plan fits your needs better.  In Massachusetts, Minnesota, and Wisconsin, Medigap policies are standardized in a different way. 

There is less paperwork involved in using Original Medicare and a Medicare Supplement.  The law requires providers and suppliers that accept Medicare to electronically file your claims directly with Medicare for covered services and supplies you receive.

. Original Medicare and a Medicare Supplement typically means lower out of pocket expenses.

Medicare Advantage Plans (Part C)

Medicare Advantage Plans, called Part C, MA or MAPD plans are offered by Medicare-approved private companies that must abide by the rules set by Medicare.  There are HMO’s, PPO’s, Private Fee-for Service (PFFS), Special Needs Plans (SNPs), and Medical Savings Plans (MSA).

Medicare pays a fixed monthly amount to the insurance companies offering these plans.  The companies must follow rules set by Medicare.  These plans can charge different out of pocket costs and have different rules for how you get services, like requiring referrals to see a specialist, facilities, suppliers, in the plan’s service are, or non-emergency or non-urgent care.

To be eligible for a Medicare Advantage Plan you must have Part A and Part B of Original Medicare.  When you join a Medicare Advantage Plan, you will still have Medicare Part A and Medicare Part B, however the coverage is now from the Medicare Advantage Plan, not Original Medicare. Your Medicare Advantage is now your primary health coverage.  You must get your services from the plan’s network of doctors, health care providers and facilities in the service plan’s area.  

You must follow the plan rules.  If you go to a doctor, other health care provider, facility or supplier that doesn’t belong to the plan’s network, your services may not be covered, or your costs could be higher.  Additionally, providers can join or leave a plan’s network anytime during the year, or the plan can change the providers anytime during the year.

Medicare Advantage Plans may offer extra coverage, like vision, hearing, dental and other health and wellness programs.  Many of these plans may also include prescription drug coverage (Part D). 

Medicare Advantage Plans have a yearly limit on your out of pocket costs for medical services.  Each plan can have a different limit, and the limit can change each year.  This could depend on whether the plan has a yearly deductible or additional deductibles for certain services, copayments or coinsurance, whether you get services from a network provider, or non-network provider, and/or you need extra benefits and the plan charges for them.  Once you reach the plan’s yearly limit on your out of pocket costs for all medical services, you will pay nothing for covered services.

You can only join or leave a Medicare Advantage Plan at certain times during the year.  You must continue to pay your Part B premium and may pay a monthly premium for the Medicare Advantage Plan.