What You Need to Know About Medicare Supplement vs. Medicare Advantage

What You Need to Know About Medicare Supplement vs. Medicare Advantage

If you are looking for coverage beyond Original Medicare, there are two types of Medicare plans to consider: Medicare Supplement (also known as Medigap) or Medicare Advantage. Because Medicare is comprised of different parts, you can either buy a plan that combines the coverage or you can build a plan that adds to Original Medicare.

Medicare Supplement plans build off of your Original Medicare plan to help cover some of the costs that Part A and B do not. Medicare Advantage plans offer an alternative to Original Medicare and may include additional benefits, such as preventive dental and vision coverage, fitness memberships and more.

Build Your Own Plan: Medicare Supplement

Medicare Supplement plans are offered through private insurers and build upon government-sponsored Medicare plans (Parts A and B). You need to remain enrolled in Original Medicare to sign up for a Medicare Supplement plan. You pay a monthly premium for these plans. Then, the plan will cover most of the costs you share with Original Medicare. Keep in mind these plans don’t include coverage for Part D prescription drugs.

Buy a Comprehensive Plan: Medicare Advantage

Medicare Advantage plans are also offered by private insurers. Beneficiaries need to be enrolled in Original Medicare to sign up for a Medicare Advantage plan, and once enrolled, still need to pay their Part B premium. Medicare Advantage plans range in coverage level and cost, and members can choose between HMO and PPO plans. With Medicare Advantage plans, you assign the administration of your Original Medicare benefits to an insurer – such as Blue Cross Blue Shield – and receive those benefits through the plan you choose.

To help decide which plan is best for you, you’ll need to understand what each type of plan offers and how they differ from one another.

  1. Both types of plans have monthly premiums. With Medicare Supplement plans, the monthly premium is generally higher, but members’ remaining cost share may be less. With Medicare Advantage plans, you often pay less in monthly premiums and pay additional costs as you use the plan. Those costs include copays when you visit a doctor, coinsurance for some services and deductibles.
  2. Prescription Drugs (Part D). Many Medicare Advantage plans include Part D prescription drug coverage. Medicare Supplement plans do not include prescription drug coverage, which means you must purchase a separate Part D plan.
  3. Expense Tracking. Medicare Advantage plans give you the convenience of having all your Medicare benefits administered through a single plan. Record-keeping with Medicare Supplement plans is more involved because members need to use different cards for Medicare Supplement and Part D coverage. They present these cards, along with their Original Medicare card, when they receive services.  The insurance companies for the Medicare Supplement and Part D plans will provide separate Explanation of Benefits, making it a bit more work for a member to keep track of medical expenses.
  4. Receiving Care. Some insurers, such as Blue Cross Blue Shield of Michigan, provide PPO members with access to a national network of providers, and HMO members with regional networks. Members with Medicare Supplement plans can see any doctor nationwide that accepts Medicare, so this is a flexible option for beneficiaries.
  5. With Medicare Advantage plans, you choose doctors, specialists and care centers that are in your plan’s network. Medicare Supplement plans give you access to any doctor nationwide that accepts Medicare.

Have additional questions about finding the plan that best fits your needs? Visit bcbsm.com/medicare and explore the blogs below:

Photo credit: Matthewreid

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