Medicare Advantage and Medigap plans offer different coverage options. However, these are two separate coverage plans that have their own benefits and rules. Let’s go over the difference between these two plans so that you can make the right choice about which plan will cover your healthcare needs.
Both Medigap and Medicare Advantage are administered by Medicare-approved private companies. The difference between the two plans, though, is how they operate in tandem with Original Medicare.
Medigap plans operate next to Medicare Parts A and B to help you with out-of-pocket costs, such as deductibles, coinsurance, and copayments. Depending on which Medigap plan you choose, you may also receive additional coverage such as emergency international coverage.
Medicare Advantage plans, on the other hand, combine Original Medicare Part’s A & B, and most plans include coverage for prescription drugs. Advantage plans also typically come with other benefits such as vision, dental, or hearing coverage.
Can I use Medicare Advantage and Medigap Together?
No, you cannot have both a Medicare Advantage plan and a Medigap plan. It is against the law for insurance companies to sell you a Medigap plan if you have a Medicare Advantage plan unless you intend to switch to Original Medicare.
While Original Medicare pays for many people’s eligible healthcare costs, it may not always cover the whole amount. Medigap plans – sometimes called Medicare Supplement Plans – help to fill in those gaps in coverage by paying a beneficiaries copayments, deductibles, coinsurances, and more, depending on your Medigap plan.
One big reason a person may choose to have a Medigap plan along with their Original Medicare is because this option allows you to see any doctor that accepts Medicare. A vast majority of doctors accept Medicare, so you’ll be able to see most doctor’s in the U.S.
Another plus to Medigap plans is that some plans will pay for emergency healthcare costs outside of the United States. This can be really beneficial for frequent travelers.
It is worth noting that Medigap plans do not cover drug costs, so many enrollees choose to also get Medicare Part D. There are plans available in every state starting around $10/month.
Beyond drugs, Medigap plans do have a couple more shortcomings. Medigap does not pay for:
- long-term care
- private nursing
- dental care
- hearing aids
- vision care and eyeglasses
- Additionally, Medigap premiums may be higher than those of Medicare Advantage.
Medicare Advantage benefits
Medicare Advantage plans – also called Medicare Part C – are an Original Medicare alternative. Private insurance companies that have been approved by Medicare can offer these plans.
These plans “bundle” together all the benefits of Medicare Part A and Part B, and these plans also usually include prescription drug coverage. Additionally, some Medicare Advantage plans provide extra benefits not covered by Original Medicare, such as vision, dental, and hearing benefits.
Probably the biggest advantage of Medicare Advantage plans is their cost. Premiums can start as low as $0, and the plans have a yearly cap on out-of-pocket costs.
Of course, there are also drawbacks to having a cheaper plan. For example, Medicare Advantage has less flexibility for choosing your healthcare provider, so enrollees generally have to pick from providers within their plan’s network. If you do choose to visit a doctor outside of your network, you may face higher overall costs.
To be eligible for a Medigap plan, you must have Medicare Parts A and B. The best time to enroll in a Medigap plan is during the 6-month Open Enrollment Period (OEP). Your OEP automatically begins the month you turn 65.
If you do not enroll during your OEP, you may be subject to medical underwriting. This means that you may have to pay higher premiums if you have any pre-existing health conditions. You could even have your application declined.
Further, the federal government standardizes all Medigap insurance plans, so all plans come with the same coverage and benefits no matter who the carrier is or where you live. However, monthly premiums will vary by carrier and by state.
Medicare Advantage & Enrollment
You may be eligible for a Medicare Advantage plan if you are enrolled in Original Medicare and you are living in the service area of a plan you would like to join. Medicare Advantage plans work in different ways depending on where you live, so you should compare all plans in your area. You can check plans in your area by using Medicare’s find-a-plan tool.
Once you have found a plan that best fits you, you can enroll in one of the following ways:
- Directly through the company’s website
- By completing a paper enrollment form and then mailing it to the private insurer
- Calling the plan provider to give them the enrollment information over the phone
Switching Between Medicare Advantage and Medigap plans.
There are three times when you can switch from Medicare Advantage to Medigap.
- During the initial enrollment period (IEP): This 7-month period begins the month before a person reaches 65 years of age.
- During the Medicare Advantage OEP: This OEP runs from January 1 to March 31 each year. During this time, you can leave your Medicare Advantage plan, re-enroll in Original Medicare, or enroll in a Medigap plan.
- Shortly after enrolling: When you first become eligible for Medicare and enroll in a Medicare Advantage plan, you have a 3 month window where you can switch back to Original Medicare and enroll with Medigap.
Medicare Advantage and Medigap plans have pros and cons, depending on what you’re looking for with your healthcare coverage. All people are different, so take your time to look over each plan and then decide which plan is right for you.
Medigap plans offer more flexibility in terms of choosing healthcare providers, while Medicare Advantage plans generally have lower premium costs. Remember, once you have chosen either a Medigap or Medicare Advantage plan, you can then enroll in the particular plan that fits you best.