This time of year, there is much confusion about the two different types of Medicare plans. The purpose of this article is to differentiate between the two types of plans and elaborate on what makes them different and how they work.
On the one hand, there are Medigap plans – these plans work with the Federal Medicare program, filling in the gaps and supplementing Medicare. Then, there is the other type of plan – which is quite different – Medicare Advantage. Medicare Advantage plans are not Medicare Supplements. On the contrary, they replace Medicare A & B with a privatized version of Medicare offered exclusively through private companies that are approved annually by the Centers for Medicare and Medicaid Services (CMS).
The upcoming time of year is especially confusing for those who are on Medicare, primarily because of what many people refer to as the “Medicare Enrollment Period”. The formal name for the period is the “Annual Election Period” – during this time, you can make changes to your Medicare Advantage or Part D prescription drug plan. However, you can change Medigap plans at any time – there is no annual enrollment period that applies to these plans.
The primary differences between Medicare Advantage and Medigap are:
Medicare Advantage plans will generally have a lower premium than Medigap plans in almost all instances. In some places, Medicare Advantage premiums can be as low as $0/month. Medigap plans have premiums that are based on your age, gender, zip code, and tobacco usage, and those premiums range widely depending on those factors.
Medigap plan coverage is, generally, more comprehensive than Medicare Advantage plan coverage. Essentially, you get what you pay for. In some cases, Medigap plans (particularly in the case of Plan F) will cover everything that Medicare doesn’t cover at the doctor/hospital with no out of pocket costs. Medicare Advantage plans have a complex system of co-pays and deductibles that vary for different services/procedures and for in/out of network.
- Doctor Accessibility
Medigap plans do not have networks – you can use any Medigap plan at any doctor, nationwide, that takes Medicare. Most Medicare Advantage, typically, have a regional network of doctors/hospitals that are contracted to participate in their plan. You can use out of network doctors in emergency situations or if you are willing to pay a higher co-pay/deductible amount.
If you move to a new state, you will have to change your Medicare Advantage plans. These plans are done by county, so if you move, you will be automatically disenrolled from your current plan and have to choose a new plan. Medigap plans, on the other hand, are national. Any plan can be used anywhere nationwide that takes Medicare, and if you move, you CAN change plans but you are not required to do so.
- Enrollment Requirements
Medigap plans are available on an open enrollment basis when you first turn 65 or go on Medicare. During this time period, you do not have to answer health questions, take a physical, be concerned with pre-existing conditions, etc. After that period, you do have to answer health questions (in most states) if you want to get a Medigap plan. With Medicare Advantage, you can enroll in a plan during the annual enrollment period at any time without having to answer health questions. What this means is that – if you take a Medicare Advantage plan initially, and then later if your health changes, wish to move to the more comprehensive coverage, you will have to qualify medically in order to do so.
The issues surrounding Medigap and Medicare Advantage are complex. Different plans are better for different people. Health status, location and financial means all come into play – or should – when comparing these types of plans. If you have questions or wish to compare the plans that are available to you, please call us at 877.506.3378 or visit us at Compare Medicare Plans.