What’s The Difference Between Medicare Supplement & Advantage Plans

When you are signing up for Medicare there are so many options out there and it’s very confusing. Especially when doing it alone, and if you have little knowledge about what the different options even are. So I hope this breakdown of the differences of a Medicare supplement policy and a Medicare advantage plan is helpful.

These are not recommendations, simply information to help you better understand insurance options. Find an agent that you can trust that will walk you through the open enrollment process, and any changes to your plan. I interviewed Angelia, a licensed insurance agent in the state of Missouri, who also has lupus:

Medicare supplement plan

Medicare Supplement is a plan that pays a portion of hospital and medical expenses that Medicare does not pay. Medicare on average will pay approximately 80 percent of all hospital and medical costs. A supplement is purchased from a private insurance company and supplements the government Medicare program. This plan will have a premium in addition to the Part B premium that Medicare charges. If you choose to remain on Medicare and purchase a supplement, you will also need to purchase a stand-alone prescription drug plan.

Medicare advantage plan

In “simple and unofficial terms” you basically say: Medicare, I don’t want you to insure me, I want to choose a health plan with an insurance company.  

In the past several years, this option has become more and more popular.  Most advantage plans have little to no additional premium.  They also include prescription drug coverage along with dental, vision, and hearing benefits. Most plans do not have a deductible but do have a maximum out of pocket. All plans vary in co-pays and out of pocket limits.

Advantage plan example

These are not all the benefits, just a few highlights to give you an idea of how an advantage plan would work. Advantage plans also have a network.

​0.00 premium, 0.00 deductible, 2,900.00 max out of pocket
0.00 copay to see a primary care doctor
​​20.00 copay to see a specialist
​​295.00 per day (1-6) for hospital (0.00 after day 6)
​​0.00 copay for preventative test
​​0.00 to 140.00 for labs, x-rays, imaging, etc.
350.00 copay for ground or air ambulance

​​Additional benefits would be dental, vision, and hearing. Most plans also have an over-the-counter benefit.

Other advantage plan details

The reason an advantage plan has little to no premium is because Medicare pays the insurance company for the policy. Medicare uses your previously paid Medicare taxes along with the part b premium that you are now paying to pay the premium for your advantage plan. In the last 4 to 5 years, I have become a big fan of these plans. Compared to years ago, they have much larger networks and much richer benefits.

If you are on Medicare and Medicaid, there are advantage plans specifically designed for you. These plans normally have must lower or no out of pocket expenses, higher dental and vision benefits and free dollars per month for groceries and utilities.

Help from agents

Medicare and all the options is so overwhelming when it’s new to you. As well as when you’ve been on it for many years. If you take nothing from this article, I hope you take this: find an agent that you can trust, that will walk you through the open enrollment process.

This year is my 4-5 year on Medicare and I still make an appointment with my agent to see if anything has changed. This is to make sure my plan is going to continue providing the same coverage - if not we find another offer! Without him I would be totally lost!

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