Medicare Advantage vs Medicare Supplement | Which Should You Choose?

Medicare Advantage vs Medicare Supplement | Which Should You Choose?

Hey guys, Cullen Teska here with Senior Market Solutions and today we’re going to take a look at the difference between the Medicare Supplement Plan and a Medicare Advantage Plan. Now this is the first decision you will need to make after enrolling in Medicare and so we’ll get into some of the details. The differences between the two types of plans, but first I want to start with this: These two types of plans are essentially the two different ways that you can receive your Social Security benefit through Medicare. And so first, with a Medicare Supplement you receive your Social Security benefit, in that Medicare itself, is your primary insurer. So… you know you’ve worked for the required portion of your life, and you now qualify for these benefits. And you receive them, in that if you go to the hospital or a doctor’s office, they pay the first portion of your healthcare costs. Medicare itself, gets billed and Medicare itself pays the first portion. Now a Medicare Supplement Plan then is required to pay the remaining costs after Medicare, so it supplements your coverage and between the Medicare Plan and the Medicare Supplement Plan, you should have, you know almost no out-of-pocket costs. Now on the other hand a Medicare Advantage Plan, you receive your Social Security benefit in the way that Medicare funds private health care organizations or insurance companies to manage your health care, so the insurance company or the health care organization pays your hospital costs, your office visit costs- those sort of things and then you pay the structure that is built in- co-pays, deductibles, or otherwise. And so as a result there are some ramifications and differences between those two structures, so let’s take a look at them. So the first thing I want to compare between a Medicare Advantage and a Medicare Supplement Plan, is how you receive your Medicare Part A hospitalization and Part B office visit coverage. Now a Medicare Advantage Plan- because Medicare is funding a private health organization or insurance company to provide you coverage, the company itself or the hospital or organization provides you with that coverage. So if you use Part A and you are hospitalized or Part B and you’re at an office visit, the company pays a portion of those costs. On the other hand, a Medicare Supplement- like I mentioned before- Medicare itself, covers the first portion of your Part A hospital visit or Part B office visit. Now let’s talk about networks. Most Medicare Advantage Plans have some sort of network limitation to them. This is because Medicare is funding a private organization to manage your health care and that organization usually has contracts with offices and hospitals and therefore you have to use those offices in hospitals. Medicare Supplements on the other hand, are different. They have virtually no network. You can take them anywhere and this is because Medicare is your primary provider. You need to remember that- Medicare is your primary insurance provider and therefore wherever Medicare is accepted, your Medicare Supplement will be accepted as well. Another difference is, that a Medicare Advantage plan is an annual contract. Because these private or health organizations, receive funding from the Federal Government to manage your health care, they can only provide you with coverage for one year because that funding will change at the end of the year. So there’s no guarantee that you will have the same coverage the next year, simply because the company itself doesn’t know what sort of funding will have the following year and so your network, your coverage, those sort of things can change from year to year with an Advantage Plan. On the other hand, a Medicare Supplement Is what is called guaranteed renewable- meaning as long as you pay your monthly premiums, you will have the coverage you chose from the beginning, for as long as you live. This is a very important difference between the two. You will not be dropped, your coverage will not be changed and there is no limitation to how long you have the coverage. Finally, Medicare Advantage Plans include prescription drug coverage, while Medicare Supplements do not. Now some people think that this is an important benefit to Medicare Advantage Plans. I have found that it is in some ways better to be able to choose your own separate prescription drug plan, because that way, you’re not limited or stuck in the prescription drug coverage that comes with your plan. We can look at all of the available prescription drug plans and find the best one for you. We’ll look at your medications, your pharmacies and find the best price prescription drug plan for you. So that is a brief overview of the differences between the Medicare Supplement and the Medicare Advantage Plan. One other note that I want to talk about, is the financial stability of a Medicare Supplement Plan. That is because of the better coverage and/or full coverage you can get with a Medicare Supplement Plan. You can budget your health care for the year knowing you only have to pay your monthly premiums. There another no other co-pays or deductibles unless you choose to have them. On the other hand, Medicare Advantage Plans- yes, you have a monthly premium, but then there’s often co-pays and deductibles, depending how many days you stay in the hospital, office visits… all of that can often leave a big question mark as to how much you will pay in your healthcare for the year. So, it’s because of reasons like that- the lack of network- you know you can go anywhere and know that you’re covered and Medicare Supplements being guaranteed renewable which is a huge benefit- your plans not going to change from year to year. It’s these sort of things that have led us to work with Medicare Supplement Plans more and more. So if there’s any way we can help you with choosing your plan or want to know more visit or give us a call here at 1-800-784-8969. Thanks

Author: Kevin Mason

7 thoughts on “Medicare Advantage vs Medicare Supplement | Which Should You Choose?

  1. Medicare Advantage plans have better coverage rules than does Medicare.  For example:  Medicare requires 3 midnights or more in inpatient to qualify for skilled nursing coverage and more pressure from Medicare is being placed on doctors to not admit people into inpatient and to keep them in outpatient 'observation' status thus having Medicare deny skilled nursing coverage.  Most Medicare Advantage plans waive this 3 midnight rule that Medicare has and provides coverage without having to be admitted into inpatient.  Medicare itself is a terrible program and it's only a matter of time until the doctors collectively put their feet down and say 'no more Medicare.'  Starting in 2017 Medicare is changing how doctors are being compensated due to the MACRA changes that change Medicare reimbursement from fee for service to fee for results.  UHC's Medicare Complete has an annual out of pocket maximum at $4,900 here in southeastern Wisconsin and Medicare Complete offers coverage outside of the plan service area with their Passport Savers program.  Then MA plans offer things like Silver Sneakers gym membership (extremely popular), dental coverage just as good as any private dental plan on the market if not better since their is no waiting period for major dental work (additional premium added to the plan that can be added or removed at any time), and hearing aid coverage.  Medicare agents don't like selling MA plans due to smaller commission for the agent, rigorous annual Medicare testing and certification exclusively for Part C and D, limit of 7 weeks per year to sell these plans, and Ma plans have horrendous customer service time investment whereas supplements have almost no customer service.  When dealing with a Medicare agent make sure your agent sells both Medicare Advantage and Medicare supplements or find another agent that does.

  2. Thank you so much for telling me the truth instead of some hyper sales pitch. A UHG salesperson totally lied to me about original Medicare so I said YouTube will let me find someone and here you are. Your video is very easy to understand and greatly appreciated. I need to get out of the stranglehold of the HMO which is actually keeping me from getting care because of limited choices.

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