Should You Choose Medigap or Medicare Advantage?

By Scott Goodell (Goodell Health Solutions)

What most people call “traditional Medicare” has a big problem…and it can cost you money.

Medicare part B, which covers outpatient and preventative services, only pays 80% of Medicare-approved costs. That leaves 20% of the bill as your responsibility.

This might not be a big deal if you only see your primary care doctor twice a year. But visits to specialists, lab tests, and routine screening procedures like EKGs and colonoscopies can run into the hundreds or even thousands of dollars.

And 20% of those additional costs can be a big hit on your budget.

If you don’t want to pay this out of your pocket, you have two options:

1. Medigap insurance (also called Medicare Supplement)
2. Medicare Advantage

Let’s look at how each of these works, plus their pros and cons.

Medigap (Medicare Supplement)

Medigap is an additional insurance policy that covers out-of-pocket costs not covered by Medicare parts A and B. These include deductibles and co-payments plus the 20% not covered by Medicare plan B.

Prescriptions are not covered by Medicare part B or Medigap.

Pros:

• Few or no unexpected out-of-pocket costs
• You can see any provider who accepts Medicare (no limited network)
• No referrals required for specialists
• Coverage applies anywhere in the USA

Cons:

• Requires an additional premium (usually $100-$250/month) on top of your part B premium
• No extra benefits (like prescriptions, dental, or gym memberships)
• Multiple policies to manage (since you’ll also probably need an additional part D policy to cover prescriptions)

Medicare Advantage

Also called Medicare part C, Medicare Advantage plans work like the HMO or PPO insurance you may have had before you signed up for Medicare. They generally cover the same things as Medicare parts A and B but may also provide additional coverage.

Pros:

• Lower monthly premium. Most Medicare Advantage plans charge either no premium or a minimal premium in addition to what you pay for part B.
• Simplified coverage. Medicare Advantage plans combine the coverage for Medicare parts A and B plus Medigap and prescription coverage.
• In addition to prescription coverage, many Medicare Advantage plans include dental and vision coverage plus fitness memberships and payment for over-the-counter items.

Cons:

• Limited networks. Medicare Advantage plans usually limit you to a specific provider network. Going out-of-network can result in additional charges.
• Referrals needed. Usually, you’ll need a referral from your primary physician to see a specialist.
• Unpredictable costs. Although your premium will usually be low, co-payments and coinsurance can add up if you need frequent medical attention.
• Geographic limits. Coverage may only apply in your local area.

How to Make the Best Choice

Everyone’s situation is unique. Your medical needs and financial situation are different from everyone else’s.

This is why there’s no “one size fits all” Medicare solution.

To choose the best Medicare solution, you need to look at all of the available options as they relate to your personal needs.

Important questions you should ask include:

1. Is cost a significant issue for you?This can include monthly premiums, co-payments, co-insurance, and excess charges. Medicare Advantage plans frequently have low to no premiums (beyond your Medicare plan B premium) but may have additional charges such as co-payments.
2. Do you want to keep your current doctors?
   
   Medicare Supplement policies are accepted by any provider who accepts Medicare. Medicare Advantage plans generally limit you to providers in their network…some networks are larger than others.
3. Do you want to pick your specialists?
   
   Medicare Advantage plans usually require a referral from your primary physician if you want to see a specialist.

The answers to these questions can require a lot of research…but that’s where we can help.

At Goodell Health Solutions, we represent several major Medicare insurance providers in the State of Texas.

We can help you narrow down the choices to fit your medical and financial needs. Is Medicare Supplemental or Medicare Advantage a better option for you? We do the necessary research to provide you with the best answer.

Need help figuring out Medicare? I’m here for you. Call me at (832) 773-7981, email me at scott.goodell@ghstx.com, or use my contact form

Disclaimer:

The information provided by Goodell Health Solutions is for general informational purposes only and should not be considered legal, financial, or medical advice. We are licensed Medicare insurance agents, and our role is to help you understand your Medicare options.