Medicare Supplement vs. Medicare Advantage

Medicare supplement insurance, or Medigap, is coverage that you can add to Original Medicare Parts A and B. Medicare Advantage (Part C) is an alternative to Original Medicare Parts A and B. It’s a different way to get your Medicare benefits. 

Both Medicare supplement insurance plans and Medicare Advantage plans are offered by private insurance companies approved by Medicare. With either choice, you continue to pay a monthly Part B premium to Medicare. The main things to think about when deciding between them are: 

  • Do you want the choice of any provider or are you willing to choose a provider from within a provider network?
  • Would you rather buy a separate prescription drug plan or get drug coverage included in one plan?
  • Would you rather pay more in monthly premiums and have lower out-of-pocket costs for services you receive or pay a low or $0 monthly premium and co-pays for services as you use them?

What’s the Difference Between Medicare Supplement Insurance and Medicare Advantage?

Supplement Insurance plans vs. Advantage Plans

Your Medicare needs are personal.

It doesn’t matter what plan your spouse or your friend or your neighbor has. Make your Medicare decisions based on your needs and preferences.

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More about Medicare Plan Costs

It’s a good idea to look at the big picture when deciding between Medicare supplement insurance and Medicare Advantage. Think about how you will use your benefits and consider all the costs of Medicare.

The sole purpose of a Medicare supplement insurance plan is to help pay some out-of-pocket costs not paid by Original Medicare (Parts A and B), like deductibles, co-pays and co-insurance. There is no cap on these costs with Original Medicare, and different plans pay different costs. You pay a monthly Medicare supplement insurance plan premium, the Medicare Part B premium and a premium for a prescription drug plan, if you want one.

Most Medicare Advantage plans provide all your coverage—including drug coverage—in one plan, similar to employer plans you may have had. You pay a low or $0 monthly plan premium and a co-pay or co-insurance when you receive a health care service. Medicare Advantage plans are required to cap your annual out-of-pocket costs. Premiums do not count toward the cap. You continue to pay the Part B premium to Medicare.

How to Understand Medicare Plans

The first step in making a wise Medicare decision is to understand the basics. Take this quiz to see if you’ve mastered the parts of Medicare—and if you might be ready for the next step.

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