Medicare Solutions

Before choosing a Medicare plan, we want to be sure you know the difference between your many options, specifically the difference between Medicare Supplement plans and Medicare Advantage plans. Consult with us to discover what your options are.

What is a Medicare Supplement Plan

A Medicare Supplement -- or Medigap -- plan is used with original Medicare. Any caregiver that accepts Medicare will accept a Medicare Supplement plan because these plans will pay the part of the claim that Medicare does not cover. Medicare pays their part (typically 80% of Medicare covered benefits) and sends the remainder of the bill to the Medicare Supplement insurance carrier which pays their part (generally 20%). It is important to note that Medicare Supplement insurance plans DO NOT include prescription drug coverage -– commonly referred to as Part D Prescription plans, or PDP plans -- and those that do not get a PDP when first eligible will typically pay a late-enrollment penalty when they enroll, unless there is a qualifying circumstance (i.e., when an individual has employer-based group insurance coverage). A Medicare Supplement plan does not change from year to year; however, premium increases can range from 2 to 10 percent –- or, more – each year.

Out Of Pocket Expenses

The out-of-pocket expenses have a limit – typically called a maximum Out-of-Pocket, or MOOP) – and this figure can range from $3,400 to as much as $10,000 annually. (Only a small percentage of Medicare Advantage enrollees typically experience that higher out-of-pocket amount.) Another point to consider is that most Medicare Advantage plans include Part D Prescription coverage; however, when switching from a Medicare Advantage plan to a Medicare Supplement plan, you will also need to add a Part D Prescription plan. While there are some Medicare Advantage plans that do not include prescription drug coverage, it is important to remember that you cannot combine a Medicare Advantage plan without prescription drug coverage with a PDP plan UNLESS it is a private-fee-for-service Medicare Advantage plan without prescription drug coverage. Lastly, Advantage Plans typically have value added benefits. These benefits vary between plans, but typical benefits include health club membership, limited dental, eye and/or vision coverage as well as over-the-counter benefits.

How Does A Medicare Advantage Plan Work?

A Medicare Advantage plan works differently than a Medicare Supplement plan. With a Medicare Advantage plan, a private company serves as the administrator – or, payor – for your Medicare coverage. This simply means that while you still have Medicare, Medicare is no longer responsible for your bills; the Medicare Advantage plan is. Medicare Advantage plans follow the same type of model as many group plans such as a Health Maintenance Organization, or HMO, or Preferred Provider Organization, or PPO. In some states, there are also private-fee-for-service plans. With a Medicare Advantage plan, it is important to remember several things. First, most Medicare Advantage plans have a network of doctors from which to choose. So, you want to make sure your doctor, hospital, and auxiliary care are within the network. While a PPO plan will allow you to visit providers outside of the plan’s network, you may experience higher costs, and in some cases, you may be responsible for 100% of care outside the network (if the provider does not accept the Medicare Advantage plan). Medicare Advantage plans that use the HMO model require its members to use only the doctors in the network, the only exception being in the event of an emergency. In addition, it is important to remember that Medicare Advantage plans have co-pays and other out-of-pocket expenses that are associated with the plan.

Not All Prescription Drug Plans Are The Same

It is important to remember, too, that not all prescription drug plans are the same. Although they are required to be at least as good as the Medicare model, they can vary greatly in cost, co-pays and specific drugs that are covered. It is important to check which one is best for you and continue to check each year because, like Medicare Advantage plans, coverage and benefits change from year to year. Because these plans vary even from county to county – and cover specific service areas within each state – we strongly recommend that you speak with an experienced insurance agent to help you choose the one that best suits your needs.

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