Medigap, Medicare Advantage and Employer Plans – Three Very Different Types of Coverage

For people over 65 and on Medicare, there are several options for coverage in addition to Medicare. Many people erroneously lump all these other coverage options into the term “Medicare Supplement”. That is not, however, altogether accurate.This is intended to clarify the different plan types and further expound on how they work and which one is right for your situation.

  • First of all, let’s look at Medigap plans. This type of plan is the one that most closely matches the term Medicare Supplement. Medigap plans do, in fact, supplement original Medicare Parts A and B. Having a Medigap plan allows you to fill in the “gaps” in Medicare, and in some cases (i.e. Plan F) eliminate the gaps in Medicare. Medigap plans are Federally-standardized, so every private insurance company has to offer the same coverage plans. It is most advantageous to sign up for these plans when you first turn 65 or are eligible for Medicare.
  • Medicare Advantage plans are plans that replace Medicare A & B. Think of them as a privatized version of Medicare. They do not supplement Medicare – i.e. they do not pay after Medicare like Medigap plans do, they pay instead of Medicare. These plans are available to anyone who is on Medicare Parts A & B. It is best to sign up for this type of plan when you are first eligible for Medicare or when you first turn 65. Although these plans typically have a lower premium than Medigap plans, which is what makes them appealing, there are some distinct downsides to this type of coverage, when compared against having Medicare with a Medigap plan. Some of these include lack of doctor choice, inability to change to a Medigap plan later, and potentially significantly higher out of pocket costs. It is important to weigh the costs/benefits of one vs. the other, and the most efficient way to do this is through an independent agent or broker.
  • Employer plans are, obviously, not available to everyone. They are available if your employer or former employer offers this to their employees or former employees. Although it is common for people to automatically stay on the employer group plan, it is not always the only option. In fact, it is a good idea to compare the employer coverage/costs against other alternatives when you go on Medicare. Of course, if your employer is paying all of your premium for the coverage, with no out of pocket premium to you, then that probably makes the most sense. If, however, you have a premium to pay for the coverage, you may be able to get more comprehensive coverage at a lower premium on the open market.

If you have any questions about this information or wish to discuss the plan options in more detail, please contact us at 877.506.3378 or online at http://medicare-supplement.us/medigap-quotes.php.

 

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