How to Choose Between an Original Medicare Plan and Medicare Advantage

How to Choose Between Original Medicare and Medicare Advantage (MA)

If you’re approaching 65 years of age, you might be thinking about furthering your health care benefits through Medicare. Before enrolling in a policy, it’s important to know your options and figure out which type of coverage is most appropriate for you and your needs.

What is Medicare?

Medicare is a health insurance program offered through the federal government for people 65 or older, certain people under 65 with disabilities, and people of any age with End-Stage Renal Disease (ESRD).¹ Two types of Medicare you can have are Original Medicare and Medicare Advantage. A Medicare Supplement insurance policy can be added to Original Medicare – however, it isn’t a primary form of insurance.

Medicare, like other health insurance, covers a few different umbrellas of medical-related expenses – these are called ‘parts.’

Part A (Hospital Insurance), which helps cover: ¹

Inpatient care in hospital
Skilled nursing facility care
Hospice care
Home health care

Part A (Hospital Insurance), which helps cover: ¹

Services from doctors and other health care providers
Outpatient care
Home health care
Durable medical equipment (like wheelchairs, walkers, hospital beds, and other equipment)
Many preventive services (like screenings, shots, or vaccines and yearly “Wellness” visits)

Like most health insurance programs, you may have “out-of-pocket” expenses when you visit your doctor. Medicare has an “out-of-pocket” amount that patients may have to cover. This is where Medicare Supplement insurance policies come in. Let’s look more into this.

What is a Medicare Supplement Insurance Policy (Medigap)?

A Medicare Supplement insurance policy, also known as Medigap, is separate from Original Medicare. It can help pay some of the health care costs that Original Medicare doesn’t cover, including coinsurance, copayments, or deductibles.¹

There are a total 10 standardized Medicare Supplement insurance policy types available in 47 states.¹ It’s important to note Plans C, F, and HDF are only available to those eligible for Medicare prior to January 1, 2020. In Massachusetts, Minnesota, and Wisconsin, Medicare Supplement insurance policies are standardized in a different way.¹

Selling Medicare Supplement Insurance Policies

Medicare Supplement insurance policies are sold by private insurance companies.

Companies selling these policies are required to offer Plan A (not to be confused with Medicare’s Part A). If they sell any other Medicare Supplement insurance policy, they must also offer either Plan C or Plan F to individuals who are eligible for Medicare prior to January 1, 2020, and either Plan D or Plan G to individuals who are eligible for Medicare on or after January 1, 2020.¹

Furthermore, they generally can’t sell you a Medicare Supplement insurance policy if you have coverage through Medicaid or a Medicare Advantage Plan.¹

Purchasing a Medicare Supplement Insurance Policy

It’s important to note you must have Part A and Part B to purchase a Medicare Supplement insurance plan.

The best time to purchase a Medicare Supplement insurance policy is during the Open Enrollment Period. This period lasts for six months and begins on the first day of the month in which you’re both 65 or older and enrolled in Medicare Part B.¹ Some states provide an Open Enrollment Period for those under age 65 who have become eligible for Medicare due to disability.

If you’re in New York, any insurer writing Medicare Supplement insurance must accept a Medicare enrollee’s application for coverage at any time throughout the year.

Medicare Supplement Insurance Policy Cons

Medicare Supplement insurance policies don’t cover your share of the costs under other types of health coverage. This includes the following: ¹

Medicare Advantage plans (HMOs or PPOs)
Stand-alone Medicare Part D prescription drug plans
Employer/union group health coverage
Medicaid
Tricare

You’ll have to pay your insurance company a premium for your policy, in addition to the monthly Part B premium you have to pay to Medicare.¹

It’s important to note policies themselves may not be offered in your state. Make sure to check your coverage map with your insurance company or a licensed insurance agent.

Additionally, benefits typically not covered by a Medicare Supplement insurance policy include: ¹

Non-skilled care (such as a nursing home)
Vision or dental care
Hearing aids
Eyeglasses
Private-duty nursing
Covering a spouse

If you don’t enroll during your Medicare Supplement insurance policy Open Enrollment Period, your insurance company can use medical underwriting to decide whether to accept your application and how much to charge you.¹ Therefore, if possible, you’ll want to enroll during this time.

However, if you’re in New York, it’s important to note there is no underwriting and the policies are guarantee issue.

Medicare Supplement Insurance Policy Pros

Medicare Supplement insurance policies can help cover certain benefits Original Medicare doesn’t cover, such as emergency foreign travel expenses (though it’s not available in all plans). It may also help save money for those people needing high-cost or frequent care.¹

Additionally, any standardized Medicare Supplement insurance policy is guaranteed renewable even if you have health problems.¹ As long as you continue to pay the premium, it typically can’t be canceled.

Furthermore, one of the most prominent benefits of Medicare Supplement insurance policies is you’re typically able to go to any doctor or health care provider that accepts Medicare. Also, it usually doesn’t require a referral from your doctor to see a specialist, and can often be used for treatments at major medical facilities. Plus, you can generally receive medical services in any state or U.S. territory.¹

What is Medicare Advantage?

Another type of policy available for those eligible for Medicare is Medicare Advantage. Also known as “Part C,” it is an alternative to Original Medicare. These plans typically include the benefits of Part A, Part B, and Part D.¹ In order to be eligible for this type of insurance, you must have Medicare Part A and Part B, and live in an available service area.¹ Medicare Advantage policies have their own advantages and disadvantages. You can learn more about them here.

Which Choice Might Be Best for Me?

Ultimately, your lifestyle, health condition, and finances may all influence the type of policy you choose to purchase. Make sure to fully review your options, and speak with your insurance company or a licensed insurance agent prior to making a final decision.

medicare.gov, Guide to choosing a Medigap Policy, 2021

Categories: Insurance, Medicare Supplement

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