Medicare Advantage Plan Vs Medigap: What’s Right for You?

With the multitude of changes and difficulties facing the healthcare industry, sometimes one of the hardest parts is keeping up with what’s available and right for you. This is especially true for those who are approaching that magic age of 65 when Medicare becomes available. If you find yourself in this boat, you are likely getting calls from a variety of agencies looking to sell you supplemental insurance plans.


Just like with any major purchase, you need to do your homework before choosing any one option. When deciding on what type of insurance you’ll have as you get older, you have three main options: Original Medicare, Medicare Advantage Plan and Medigap.


Each of these provides advantages and disadvantages depending on your needs, so let’s look at some of the specifics to help determine which is right for you:


Original Medicare


Original Medicare is the default option for most people and provides many advantages. However, if you’ve done any research at all on this type of insurance, you know that there are many things it doesn’t cover and those who use this as their only insurance are often left with unmanageable bills and/or inadequate care options.


While this insurance is the cheapest in terms of monthly costs, this stops being an advantage when you have medical costs that go beyond what the plan will cover.  Like with most insurances, the basic option is only a smart choice when you remain in good health. If you have chronic conditions or expect to have large medical expenses in the near future, you will need supplemental options, and this is where Medigap and Medicare Advantage come into play.


Medigap Vs. Medicare Advantage Plan


The basic difference between these two is that Medigap is a supplement to Original Medicare, while Medicare Advantage replaces the Original. However, there are many other differences beyond this, including:


  • Monthly Payments and Copays: In short, you will pay more for Medigap monthly, however; you will have no copays. Medicare Advantage is just the opposite; monthly payments are lower, but you will be hit with larger bills when services are rendered. Generally, if you know now that you are going to need a lot of medical help, Medigap is likely to provide a more cost-effective option. Also note that Medicare Advantage does have a cap on what you are required to pay out of pocket, but this cap can approach $7,000 per year.
  • Choosing Doctors and Referrals: For many, one of the biggest advantages of Medigap is that there is guaranteed freedom of choice in choosing doctors while Medicare Advantage often restricts patients to a network. Similarly, Advantage is more likely to require a referral to see a specialist which can make getting proper care a longer and more arduous process.
  • Drug Coverage and Extras: The one place where Advantage shines over Medigap is that it is more likely to provide coverage for vision, fitness and hearing extras. These are available through certain providers of Medicare Advantage. However, you can also purchase separate dental, vision and hearing insurance to supplement Medigap. With Medigap you will also have to sign up for Part D drug coverage which will add to your monthly bills, while Medicare Advantage includes this in its monthly price.
  • Enrollment Periods: If you’re scrambling for insurance, this may become a deciding factor as Medicare Advantage has both an enrollment and un-enrollment period each year. If you are turning 65 and there is an enrollment for medicare  Advantage, you can sign up for Original Medicare and choose Medigap too.


Choosing Your Insurance Provider


When choosing between Medicare Advantage and Medigap, you have many options for providers and plans to choose from. Making this decision can be overwhelming and you need an insurance agent who can guide you through the pros and cons of each option and help you choose the one that’s best for you.


At Arbor Creek Financial, we specialize in providing personalized insurance solutions that do not promote one plan over another. We work with you to find the options that are truly suited to your personal needs and future goals. To learn more about what an Arbor Creek Financial representative can do for you, call us for an obligation-free consultation at 1-866-462-6526.