Advantage Plans For Medicare vs. Medigap

Oct 20, 2023 By Susan Kelly

Anyone who is considering enrolling in Medicare must make several choices. A crucial choice is whether to supplement Original Medicare with Medicare Advantage or Medigap insurance.

Health Medicare is an independent insurance broker certified insurance brokers who can assist Medicare beneficiaries choose Medicare Advantage, Medigap Insurance, and Prescription Drug Part D plans.

Medicare Coverage

Predicting annual healthcare costs in retirement can be challenging, making it difficult to plan a budget. Although traditional Medicare offers solid foundational coverage, it pays only around 80% of the costs it authorizes for hospitals, doctors, and healthcare procedures.

The remaining 20% is the patient's responsibility, and there is no annual cap on how much they might have to pay out-of-pocket. This is in stark contrast to the coverage provided by the Affordable Care Act. Take, for instance, the case of someone who requires a heart bypass operation.

The average cost would be $151,271, and you would be liable for a copay. Moreover, health care necessities are not covered at all by ordinary Medicare, such as prescription medicines, hearing aids, eyeglasses, and dental treatment.

Supplemental Medicare Insurance Policies, or Medigap

Parts A and B of Original Medicare cover hospitals, doctors, and medical procedures for Medicare's 62 million members, including the elderly and the disabled.5 About 81 percent of these recipients also have a Medigap policy.

While this may be the more expensive choice, there are certain benefits to having Medicare Part D coverage in addition to Medicaid or employer-sponsored insurance, which 48 million Americans already have. Most hospitals and doctors in the United States accept Medicare, so you may use either Original Medicare or a Medigap plan to pay for their services.

Advantage Programs for Medicare

Medicare Advantage policies are sold to customers by insurance firms, including Aetna, Humana, and the Kaiser Family Foundation. Medicare has approved these firms to provide these policies.

Compared to the high costs of Medigap and medication coverage, their rates may be zero or much cheaper. Hospitalization and physician services are included in Medicare Advantage plans, as are prescription drugs and sometimes even treatments that Original Medicare does not cover. In 2021, these plans will be selected by 42% of Medicare recipients.

When You Should Enroll in Medicare

Knowing which registration dates apply to your situation as you approach age 65 is essential. You should probably start by making sure you qualify. The seven months were beginning three months after you turn 65 and ending three months after your 65th birthday is the optimal time for most people to enroll in Medicare Part A and Part B. If you already receive Social Security benefits, you will be registered automatically; if not, you can enroll at any Social Security office or online.

Medicare Part B

However, suppose you are still actively employed at age 65 and have employer insurance via a firm with more than 20 workers. In that case, you may defer enrolling in Medicare Part B until your job coverage finishes.

Ask your employer if you are obliged to enroll in Medicare if you work for a company with less than 20 workers, and make sure you obtain the answer in writing.

Medicare Part D

Choosing Medicare Part D coverage is a primary Medicare enrollment choice. If you don't sign up for Medicare Part D when you're first eligible for the program but subsequently decide you need prescription coverage, you can be subject to a lifetime penalty.

Creditable prescription drug coverage exempts you from the liability, as it is supposed to pay, on average, at least as much as Medicare's basic prescription drug coverage. As a general rule, those who already have such medication coverage when they become Medicare eligible are permitted to maintain it.

If you go without creditable coverage for less than 63 consecutive days but then opt to enroll in a Medicare prescription drug plan, you will not be subject to a penalty.

Traditional Medicare Plus Medigap

Parts A and B make up Original Medicare; additional coverage is available through Medicare Part D prescription medication plans and Medigap policies. While enrolling in Medicare will automatically enroll you in Parts A and B, acquiring these supplemental plans will need further steps.

Drug insurance Part D

Start by looking for plan options in your area. If you don't use many prescription prescriptions, seek a plan with a low monthly premium and compare it to others based on their premiums, deductibles, and Medicare star ratings13 by visiting and entering the names of the medications you take.

The Medicare Part D medication coverage requirements still apply to all plans. However, if you expect to spend more than $4,430 on covered prescriptions in 2022, you may want to research projects that cover your medications during the coverage gap period known as the "donut hole."

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