Is It Better to Have Medicare Advantage or Medigap?

It is a decision not to be taken lightly. You are approaching Medicare age, and you know you must weigh your decision. Is it better to have Medicare Advantage or choose Medigap as part of Original Medicare?

What is Medigap Health Insurance?
Medigap insurance is sold alongside Original Medicare (OM). It is supplemental insurance that helps fill in the gaps that OM leaves behind. It can help pay for coinsurance, copays, and assist in meeting deductibles.

Medigap is not just one plan, but eight plans lettered Plan A through N that offer various coverage options. All plans provide certain staples. For instance, all Medigap policies offer Part A and Part B coinsurance assistance. Part A is 100%; Part B is 80% and has a deductible of $233, this will decrease to $226 for 2023. After you’ve met your deductible, you will pay a coinsurance of 20%.

Here is how Medigap works:

• Medicare will first pay its share of Medicare-approved healthcare costs
• Then the Medigap insurance company will pay the difference depending on which plan you have

For instance, if you have Original Medicare Part A and B with Medigap Plan A and you had a hospital stay due to an illness where you were in the hospital for two weeks, Your Plan A would pay for the hospital stay. However, you still must meet your deductible ($1556 for 2022). A Medigap policy would pay your coinsurance plus for an additional 365 days after your Medicare benefits are exhausted.

To purchase a Medigap insurance policy.

• You must have Medicare Parts A and B
• You pay the private insurance company for your Medigap insurance policy
• You can only purchase a Medigap policy that is within the state you reside in

Other need-to-knows about Medigap:
• Medigap policies are guaranteed renewable as long as you pay your premiums
• Medigap policies can vary in cost from company to company; it is best to shop around.
• Medigap policies do not have prescription coverage. You will need to purchase a Medicare Part D plan to obtain RX coverage.
• You cannot have a Medicare Advantage Plan and a Medigap plan together because they duplicate coverages; there is no need.
• One issue with Medigap is that it only covers one person. It isn’t like an insurance plan that would cover you and a spouse. If your spouse wants a Medigap plan, they will need to purchase their own policy.

NOTE: There is an exception to the one person rule. It is called a Medigap household discount. If two people from the same address enroll with the same Medigap company, they are entitled to a discount. The other party must be a spouse, a civil union partner, or permanent resident of the home. Not all insurance companies offer it, but when they do it can offer the insured an average of 5% to 7% discount.

Another factor to consider when applying for Medigap coverage, just like health insurance and the Affordable Care Act, there is an Open Enrollment period. But Medigap is different because you can still apply after your OE period closes. However, when you apply for coverage outside this window, there can be penalties like increased premiums, delays in coverage, or the inability to purchase coverage. The Open Enrollment for Medigap begins the day you start your Part B coverage and lasts seven months.

Medigap also has a ‘look back period.’ This is the time from your effective date going back six months. If you were diagnosed with or treated for a condition within those six months, the Medigap policy will not cover you for that condition for your policies first six months. After that period is over, you will have coverage as normal. Keep in mind that you will still have Medicare coverage; this only applies to the Medigap portion of your health coverage.

NOTE: If you had a form of credible coverage, like an employer’s insurance plan, during those six months, that Medigap waiting period is reduced by the months you had the credible coverage.

What is Medicare Advantage?
Now let’s move on to Medicare Advantage plans in Texas. This option is a way to get everything in one. A bundled insurance plan, if you will. Medicare Advantage includes Part A, Part B, and Medicare’s prescription plan, Part D. It also includes other options that Original Medicare does not cover, like vision, dental, and hearing coverage.

Let’s break it down to see if it is better to have Medicare advantage over Medigap insurance.

First, unlike a Medigap plan, Medicare Advantage does not work with Original Medicare. This is because Medicare Advantage is its own insurance. You purchase it through an insurance company and not through Medicare. However, MA insurance companies are still approved by Medicare and must follow their standard. Next, there are differences in how Medicare and Medicare Advantage work.

With Medicare Advantage, there are advantages and disadvantages.

• Advantage: As we mentioned, you have dental, vision, and hearing benefits.
• Disadvantage: You must see the doctors within your plan’s network. If you see a doctor outside of the network, aside from emergencies, you could pay a higher rate or run the risk of being uncovered for that treatment.
• Advantage: You have a yearly Out of Pocket Max. Once you reach this annual dollar amount, the insurance company will pay expenses for the remainder of the year for Part A and Part B.
• Disadvantage: If you find yourself in a network plan that does not offer Prescription coverage, you cannot purchase a Medicare Part D to compensate for the lack of RX coverage. You must wait until the next open enrollment period to switch plans.

We mentioned a plan’s network. There are four different networks within Medicare Advantage. You must select one of them, then follow the plan’s instructions on network providers.

• HMO Plans – Health Maintenance Organizations – You receive your care from a Primary Care Physician where you choose from the list of doctors and providers within your local area. Prescription drugs are usually covered. Like regular insurance, all your medical needs must filter through your PCP, tests, prescriptions, and advanced medical care.

• PPO Plans – Preferred Provider Organizations – You do not have to choose a PCP and are free to be seen by any doctor you wish, nor do you need a referral to have testing done or prescriptions refilled. Prescription drugs are, in most cases, covered with a PPO plan.

• PFFS Plan– Private Fee for Service – This level of Medicare Advantage plan is determined by an agreement between the provider and Medicare on payment for services. This, however, does not limit you to the doctors you can see. You have the option to receive treatment from any doctor, specialist, or hospital, but if they are not part of the contracted network, you will pay a higher rate with that facility. Prescription drugs are not typically covered; you will need a Part D to fill this need.

• SNPs Plan– Special Needs Plan – A Medicare Special Needs Plan requires a genuine need to qualify. It can be tailored to meet the need of the insured. Most of the time, you can choose any doctor, in some cases even out of network. Some providers require you to select a Primary Care Physician (PCP). Medicare SNP must provide Part D coverage to its recipients.

You have the option to change plans with each open enrollment period at the end of the year during Medicare Open Enrollment period. There are also times when you can qualify for a special enrollment period, like moving or losing your current health coverage.

Which Medicare Insurance is Better to Have?
Social Security enrolls you into Original Medicare, Part A, and Part B. It is your option if there will be modifications to this. Private insurance companies offer Medicare supplement plans in Texas for you to choose from to help your costs: Part D, Medigap plans, and Medicare Advantage are the primary add-ons that recipients decide to supplement their insurance plans. So, which is the better insurance to have?

First, it is always best to examine your current situation and anticipate your future need. Most Medicare options require you to make your choice when you approach your 65th birthday: Original Medicare with Medigap or Medicare Advantage. Ask yourself a few questions.

• Do you take multiple maintenance medications?
• Do you wear prescription glasses?
• Do you wear dentures?
• Do you see a doctor or specialist regularly?

When you answer yes to these questions, perhaps a Medicare Advantage plan will best suit your needs. If your vision is good and you don’t visit the pharmacy often, then a Medigap plan may better fit your situation. Bear in mind that should your health change, it could be difficult to change plans, so if you have a family history of health conditions, it may be best to err on the side of caution and select a plan that will fit your family’s future needs.

When you delay, you fall into the danger of a higher cost or risk losing the option available to you. Medicare is unlike regular health insurance, where options are always available to you. In some cases, like with a Medigap policy, if you pass your six-month window, you could lose your opportunity to obtain coverage, especially if you have a health condition or if you develop one waiting for the next open enrollment period.

Medigap cannot cover the Part B deductible. after January 1, 2020 c and f discontinued. But if you were eligible to purchase, but didn’t you may still be able to buy it.

There are many differences between the Affordable Care Act health insurance and Medicare. As you get ready to enter the golden years of life, it is good to be prepared for whatever health matter that may come your way. This is why Cover Mile strives to assist you in knowing what options are available to you and helping you understand both Medicare Advantage and Medigap plans so you can make an informed choice for your healthcare needs. Contact us today!