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Medicare is a great program. But can it ever be confusing.
There is ‘Original’ Medicare, Medicare ‘Advantage’ and Medicare ‘Supplement’ (also called Medigap).
We created this webpage to give you a quick overview. While they all are Medicare options, there can be significant differences. It is important to understand these differences.
Medicare Advantage vs Supplement
We believe, it can be very helpful to work with a Medicare insurance agent who can educate you about the important differences. And, if you want, he or she can help you get the best coverage for your needs and financial situation. Use our online directory to find local Medicare agents. Simply enter your Zip Code in the box on the right (it’s 100% and 100% private!).
Medicare is a federal health insurance program. It’s primarily for individuals who are 65 and older. However, those with select disabilities are also eligible.
Medicare has multiple parts – identified with letters (A-D).
Part A (hospital insurance)
Part B (medical insurance)
Original Medicare is comprised of Part A and Part B.
Medicare also includes:
Part C (Medicare Advantage plans that replace Original Medicare coverage) Part D (prescription drug coverage)
Medicare Supplement insurance (Medigap). You can add supplemental coverage to your Original Medicare policy. This helps fill in some of the coverage gaps that Original Medicare won’t pay for.
Medicare Advantage (MA) plans (also known as Medicare Part C coverage) are an alternative option to Original Medicare. Simply said, you have the option to enroll in Original Medicare coverage (Part A and Part B) or replace this coverage with a Medicare Advantage plan (Part C).
Medicare Advantage plans are offered by private companies overseen and authorized by the federal government. Most often they are insurance companies like Aetna, Cigna, Mutual of Omaha or UnitedHealthcare.
Medicare Advantage plans can vary significantly from one plan to the other. It is important to compare. In most larger metropolitan areas, there may be as many as 40 (or more) MA plans available for you to compare. In smaller markets, there will be fewer plans generally available.
Today, most Medicare Advantage plans include coverage for prescription drugs that you take outside of a hospital setting (Part D coverage). These are often referred to as MAPD (Medicare Advantage Prescription Drug) plans.
Many people do. That’s why over 26 million have this coverage (2021/2022 statistics).
Here’s just some reasons why MA plans are so popular.
Quality networks: While you want to be sure the healthcare providers available are on your desired quality, many Part C plan members will tell you they are VERY satisfied with the doctors and providers included under their coverage.
Additional benefits: Medicare Advantage plans often offer coverage and benefits beyond what is included in Original Medicare Part A and Part B. Prescription drugs, dental and vision care may be included. But be advised that the levels of benefits can vary significantly between one plan and another.
Easier plan management: Rather than paying a premium for Part A and Part B coverage that depends on your income, with Part C you pay a single premium.
There are (of course) many downsides or limitations to choosing a Medicare Advantage plan. As we have said before, comparing is so important.
Medicare supplemental insurance (sometimes referred to as Medigap) is an additional insurance policy that you can add to (combine) with your Original Medicare. Medigap can pay for some of the things that Part A and Part B do not.
There are different Medicare supplemental insurance options (also identified by letters … you guessed it; the Medicare folks love letters).
Unlike Medicare Advantage benefits, Medigap plan inclusions are standardized across insurance companies. No matter which insurance company you purchase your Medigap coverage from, a Plan G policy will always include the same benefits, as will other Medicare Plan G plans.
Here is a general overview of the coverages included with each letter plan. We have left off Plans C and F which are no longer available for new Medicare enrollees.
Medigap Plan A
Plan A includes the following benefits:
Medigap Plan B
Plan B includes the following coverages:
Medigap Plan D
Plan D includes the following benefits:
Medigap Plan G
Plan G includes the following benefits:
Medigap Plan K
Plan K includes the following benefits:
The out-of-pocket maximum for Plan K coverage is $6,620 in 2022.
Medigap Plan L
Plan L includes the following benefits:
Part A coinsurance and hospital costs for an extra 365 days after Original Medicare benefits are exhausted
The out-of-pocket maximum for Plan L coverage is $3,310 in 2022.
Medigap Plan M
Plan M includes the following benefits:
Medigap Plan N
Plan N includes the following benefits:
Just over 14 million Americans own a Medigap policy. They generally will tell you that they key benefit is the ability to see any doctor, specialist or care provider that accepts Medicare. Medicare Advantage plans may specify networks you must use.
Maybe. And, that’s where speaking to a local specialist can be so valuable to you.