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Choosing Between Medigap Coverage and Medicare Advantage is One of the Most Important Health Care Decisions You Will Make

Contrary to what many believe, Medicare doesn’t cover all healthcare expenses, which is why most Medicare enrollees also purchase Medigap insurance.

Also called Medicare supplement plans, Medigap insurance provides critical coverage and benefits for healthcare services and costs that Medicare doesn’t pay for. Selecting the right Medigap insurance plan can be confusing, as many kinds of plans are available.

But picking a Medigap plan isn’t the only healthcare coverage choice that Medicare participants can make. Instead of choosing a Medigap play, a person over 65 may decide to enroll in a Medicare Advantage plan. While both Medigap insurance and Medicare Advantage plans are provided by private insurers approved by Medicare, they offer distinct benefits and address different coverage needs.

What is Medigap Insurance?

Original Medicare, also known as Parts A & B, covers a substantial portion of the health care expenses you incur after enrolling. However, the basic Original Medicare doesn’t cover all the costs of care, treatments, and other services. You will be responsible for copayments, deductibles, coinsurance, and premiums. And as your healthcare needs increase with age, so does the amount of money you may have to spend on your care.

Medicare supplement plans, issued by private insurers rather than the government, take care of these “gaps” in Original Medicare, paying for care that could otherwise cost you tens or hundreds of thousands of dollars over time.

Medicare supplement plans are not stand-alone plans. You can only purchase one in combination with enrollment in Original Medicare Part A and Part B. Medicare Part A covers inpatient hospital stays, skilled nursing facility stays, some home health visits, and hospice care. Part B provides coverage for physician visits, outpatient treatment, preventive care services, and some home health visits.

Medigap insurance is standardized across the U.S., with each type of plan identified by a letter (A through N), with costs, benefits, and availability of plans varying depending on your age, gender, health, and state of residence. Each lettered Medicare supplement plan must provide the same basic set of benefits regardless of which private insurance company offers it. Price is the only difference between plans A-N sold through different insurance companies.

What is Medicare Advantage (Medicare Part C)

Medicare Advantage plans, referred to as Medicare Part C, are Medicare-approved private insurance plans that combine coverage for hospital care, doctor visits, and other medical services in one comprehensive plan that provides all of the benefits offered by Medicare Parts A and B (except hospice care).

Prescription drug options offered by most plans as well as other benefits such as routine vision and dental care.

Private health insurance is very similar to Medicare Advantage Health Plans.

After a small co-pay, office visits, lab work, surgery, and many other services are covered. All plans will have the same mandatory limit on the annual out-of-pocket expenses of its members and may offer an HMO or PPO network.

Medicare Advantage plans restrict you to using doctors within their network and may cover less, or none, of your costs if you use out-of-network providers. Most Original Medicare allows you to use any U.S. physician or hospital that accepts Medicare.

Medicare Advantage plans may have no premiums, or the premiums may be lower than those for Medigap and prescription drug insurance policies. In 2022, 48% of Medicare beneficiaries chose a Medicare Advantage plan, according to the Kaiser Family Foundation.

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You Can’t Have Both Medigap Insurance and Medicare Advantage Coverage

Medigap insurance and Medicare Advantage are mutually exclusive, meaning that you have to choose one or the other (or neither). The best option depends on your healthcare needs, budget, and priorities.

Since there are restrictions that apply if you wish to switch from Medicare Advantage to a Medigap plan and vice-versa, making the right decision is critical.

Suppose you need help deciding between Medigap coverage and Medicare Advantage or have questions about how these programs work. In that case, the experienced Colorado Springs Medicare insurance brokers at Preferred Insurance are ready to help you.

We simplify the Medicare process and provide expert guidance, so you understand what you are getting and paying for.

Don’t hesitate to contact Preferred Insurance today to schedule a free consultation to discuss your Medicare needs.