Medicare Advantage vs. Supplement Plans: Understanding the Differences

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Are Medicare Advantage and Medicare Supplement the same thing?

More often than not, you hear the terms “Medicare Advantage” and “Medicare supplement plans” mentioned at the same time. This can be confusing to some, as both plan types are very different. In fact, you can’t even be covered by both at the same time.

The easiest way to remember the differences between Medicare Advantage and Medicare supplement plans is to remember how they function. One acts as something of an alternative to Original Medicare (Parts A and B), while the other fills in the gaps to cover some of the things that Medicare doesn’t cover.

So, you may be wondering, which plan is the alternative and which plan fills in the gaps? Let’s read on to find out!

So, What is the Difference Between Medicare Advantage and Medicare Supplement?

To answer your question regarding Medicare Advantage and Medicare supplement plans, let’s take a second to look at the basic definition of each plan.

What is Medicare Advantage?

Medicare Advantage, or Medicare Part C, is a private insurance plan that’s designed to meet or exceed benefits offered by Original Medicare, or Medicare Part A and Medicare Part B. In essence, Medicare Advantage is a private alternative to Original Medicare.

Medicare Advantage plans come in three different types:

• Health Maintenance Organization (HMO)
• Preferred Provider Organization (PPO)
• Special Need Plans (SNP)

What is Medicare Supplemental Insurance?

Medicare supplemental insurance, or Medigap, is a plan that’s designed to cover things that aren’t covered by an Original Medicare plan. In other words, Medigap “fills in the gaps” of an Original Medicare plan.

Medicare supplement plans can come in many unique types, all of them designated by letters A through N. Just make sure not to get them confused with Medicare Parts A, B, C or D!

Medicare Advantage vs. Medigap

There are many crucial differences between each plan type. The most glaring difference is that a Medicare Advantage plan serves as an alternative to Original Medicare, while Medicare Supplemental Insurance, or Medigap, serves as an addition.

When you pit Medicare Advantage vs. Medigap, other differences in certain areas, such as coverage or price, make themselves clear. Let’s take a look at some of the biggest differences between the two options.

Medicare Advantage

Medicare Advantage is available to those who cannot enroll in Original Medicare for whatever reason, or for those who prefer a private option as opposed to what is offered by the federal government. Medicare Advantage plans cover everything that Original Medicare covers, and often more.

The list below details some additional benefits that are often provided by a Medicare Advantage plan:

• Hospitalization
• Medical Coverage
• Prescription Drug Coverage (Medicare Part D)*
• Vision, Dental, and Hearing benefits
• No-cost programs and services not covered by Original Medicare
• Allowances to purchase over-the-counter medications
• Transportation to and from medical appointments
• Free meal delivery

*Some Medicare Advantage plans include Part D prescription drug coverage, while others do not. If your plan does not include Part D, you can get Part D as a standalone addition to your Medicare Advantage plan.

Medigap

As a supplement to Original Medicare, Medigap covers some – but not all – of the things that Original Medicare does not cover. Let’s take a deeper look at the types of additional benefits a Medicare Supplemental Insurance, or Medigap, plan may cover:

• Coinsurance for Part A and hospital costs up to an additional year from the end of your Original Medicare benefits
• Coinsurance or copayment for Hospice care (Part A)
• Coinsurance or copayment for doctor and medical services (Part B)
• Blood replacement, with no additional cost for the first three pints of blood per year, per patient
• Coinsurance for care in a Skilled Nursing Facility
• Deductibles for Part A and B
• Part B excess charges – covers additional charges for a doctor who does not accept Medicare assignment
• Foreign travel emergencies (in accordance with plan limits)

Keep in mind that there are a few benefits that Medigap does not cover, such as:

• Custodial, personal, or private-duty nursing
• Vision and dental benefits
• Hearing devices
• Visual corrective devices

In order to be eligible for a Medigap plan, you must already have Original Medicare. If you are on a Medicare Advantage plan as opposed to Original Medicare, you are ineligible for Medicare supplement plans.

Which Plan Type is Best For Me - Medicare Advantage or Medigap?

The decision to choose a Medicare Advantage plan or Medicare supplement insurance depends on whether you currently have Original Medicare or are looking to transition from Original Medicare to something privatized. It also depends on your overall budget.

While there are no zero-cost Medicare Advantage plans, you can usually find several in your area at low premium rates. There are also no zero-cost Medigap plans, but they can also be found in your area at low premium rates. Just know that if you’re already paying a premium for Original Medicare, you’ll be paying an extra cost for a Medicare supplement insurance plan should you choose to add one to your coverage.