Medicare Advantage or Medicare Supplement? Which Is Right for Me?
By Tucker Thompson, Benchmark Financial Services, Collin County LIVING WELL Magazine
Medicare Advantage Plans (Part C) are funded in part by the government, paying “preset” amounts to insurance companies offering them. Factors determining any monthly premium you pay include the rate set by each company, your county, the government reimbursement, and if a drug plan is attached. Additional monthly costs include your required Medicare Part B premium and any “copays” for care. “Advantage Plans” can be purchased when you sign up for Medicare or during the Annual Election Period each fall or specific exceptions that may offer special enrollment. Important Note: Not all doctors and hospitals accept Advantage Plans for payment! Call the doctors and hospitals you prefer to make sure they will “accept” an Advantage Plan before signing up!
The main types of Advantage Plans include: HMOs (Medicare Health Organizations); PPOs (Preferred Provider Organization); PFFS (Private Fee for Service); SNPs (Special Needs Plans). HMOs restrict who they will reimburse based on their own “approved” network of medical providers. Selecting your primary care physician from this network, they must then refer you to any specialists or hospitals. PPOs also have “network” restrictions, but you don’t need a “referral” to go to any physician or hospital in their network. PFFS plans allow you to “choose any” physician or hospital that “accepts” the plan’s terms (key phrase). SNPs are limited to certain institutions, people eligible for both Medicaid and Medicare and those with specific chronic or disabling conditions.
Medicare Supplements (Medigap insurance) is designed to help pay for “gaps” in health care charges that basic Medicare won’t pay, like copays and deductibles. With no networks, you choose any provider that accepts Medicare, without referrals. There are 12 “standardized” Medigap plan types: A-B-C-D-F-high deductible F-G-K-L-M and N. By law, each plan type offers the same coverage, but “A” plans will offer different coverage than any of the other plans (B-C-D, etc.). Medigap policies will charge you a monthly premium in addition to the Medicare Part B premium that all Medicare recipients must pay.
Important Note:You can apply to change Medigap policies at any time.
Tucker Thompson has worked in the insurance field for over 20 years. As a licensed, independent insurance agent he continues to be an educational speaker on topics related to Medicare and other insurance services.