If you are new to Medicare, you may find your Medicare health plan options and some of the terminology confusing. When choosing a plan, a little knowledge can keep you from making some costly mistakes. First, you need to know the difference between a Medicare supplement and a Medicare Advantage plan. Many people just assume that any plan that is offered by an insurance company is a supplement. This is not the case. An Advantage plan is not a supplement.
An Advantage plan is offered by a private insurance company as another way to receive your Medicare benefits. The insurance company offering the plan has a contract with CMS (Centers for Medicare and Medicaid Services) to administer your benefits. Some features of an Advantage plan include:
You will have cost sharing by way of co-pays, co-insurance and deductibles. Plans are often a PPO or HMO and have a network of providers. May have a low, or in some cases, no monthly premium. Will often include the Part D Medicare drug coverage. May offer benefits beyond original Medicare, i.e. dental, vision, and gym memberships.A Medicare supplement, or Medigap insurance plan, fills the gaps left by original Medicare by paying your share of the charges. This is typically the hospital deductible, hospital co-pays if required, and the 20% outpatient charges that Medicare does not pay. Some features of a supplement include:
They are standardized plans that may require some medical underwriting. May be more costly the older you are. You pay your monthly premium, which is typically higher than an Advantage plan, but have less out-of-pocket expenses when services are rendered. Stand-alone Part D Medicare drug coverage will be necessary. Benefits beyond original Medicare are not included.Once you know the difference between the types of Medicare health plans, you need to ask yourself some questions. The questions typically revolve around your health and your budget. Other considerations will include your choice of medical providers and whether you require or can pay out-of-pocket for the extra services not offered by Medicare.
Can you afford a monthly premium for a supplement, even if you do not use it? If not, you may want to consider an Advantage plan. Do you have health problems and are not in an open enrollment or guaranteed issue period? If so, you may need to consider a Medicare Advantage plan. Are you willing to accept a provider network? If not, you may want to consider a Medicare supplement. Can you live with the fact that insurance companies that offer Advantage plans, can change benefits annually or discontinue the plan? If not, you may want to check out a supplement.Everyone has different circumstances and these are just some of the questions you will want to answer before you choose your Medicare health plan. Once you decide which type of plan is best for you, you will then want to compare plans that are available to get the best possible plan for your health and money.
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