What’s the Difference between Medigap and Medicare Advantage? An Expert Reveals Which Plan Saves Seniors the Most Money
The clock is ticking on open enrollment—breaking down costs, coverage and the deadline seniors can’t ignore
We’re less than two weeks away from the end of the Medicare Advantage Open Enrollment Period, which means seniors on Medicare Advantage plans don’t have much time to decide if they want to change their coverage or return to Original Medicare. They also have to decide if they want to enroll in a Medigap plan and leave Medicare Advantage coverage all together. But which plan is better? Medigap and Medicare Advantage? We asked an expert to explain the differences between the two and even got her to share which plan she thinks is a better option overall. Read on for more.
What is Medicare Advantage?
Medicare Advantage—also known as Part C—is a form of Medicare run by private insurance companies, not the government.
“More than half of Medicare beneficiaries have already made the move to Medicare Advantage, and that figure is expected to grow to over 60 percent in the coming years,” Whitney Stidom, vice president of consumer enablement at the online health insurance broker company eHealth says. “Many beneficiaries are switching to Medicare Advantage to help fill coverage gaps in Original Medicare, including for prescription drugs and dental, vision and hearing care.”
Costs for Medicare Advantage vary, with average premiums costing around $14 to $34.50 a month. Medicare Advantage users also have to pay a monthly Part B premium to maintain their coverage, but many plans offer a Part B premium reduction, which results in some or all of your Part B costs being covered by insurance. Currently, on average, Part B costs $202.90 a month, but that amount can change based on someone’s income.
What is Medigap?
Medigap—also known as Medicare Supplement plans—comes in different types designated by letters: A, B, C, D, F, G, K, L, M and N, Stidom explains.
“However, these are not to be confused with Original Medicare Parts A and B. The benefits included with each type of Medicare Supplement plan are identical, no matter who offers it to them. For example, all G plans provide the same benefits,” she continues. “Medicare Plan F provides the most comprehensive protection of all Medicare Supplement plans. However, it is being phased out, which is why it is no longer available for people who turned 65 years old on or after January 1, 2020. The second-most comprehensive plan type is Medicare Supplement Plan G, which is exactly like plan F except it doesn’t cover the cost of enrollees’ annual Medicare Part B deductible. Medicare Plan G is available to all Medicare beneficiaries.”
If seniors are enrolled in Plan G, it can help cover out-of-pocket costs such as coinsurance and copayments for doctor appointments or hospital stays under Original Medicare. However, she notes that people enrolled in this plan will not have any prescription drug coverage.
“That’s why most enroll in a separate Medicare Part D prescription drug plan. Depending on existing or potential health issues, many Medicare beneficiaries may also want to consider purchasing a separate dental or vision plan,” she explains. “Also, if Medicare Supplement is the preferred option, it’s important for beneficiaries to enroll as soon as they become eligible for Medicare just before or after turning 65. If people apply later, they’ll need to go through medical underwriting [a process in which insurance companies evaluate an applicant’s health history, risk factors and lifestyle], which can result in them being charged more for coverage. They could also end up being declined entirely.”
So which is better? Medigap versus Medicare Advantage
While both plans will give seniors health insurance coverage, Stidom says Medicare Advantage is often better than Medigap, simply because it has more benefits.
“Medicare Advantage plans typically include prescription drug coverage, and many include dental, vision and hearing coverage,” she explains. “Medicare Supplement plans can do a good job of covering out-of-pocket costs, but these plans don’t include prescription drug coverage or other extra benefits such as dental, hearing or vision.”
The downside to Medicare Advantage plans?
“Seniors will need to get most of their nonemergency medical care through doctors and hospitals in their insurance company’s provider network, which is typically limited to a specific geographical area,” says Stidom.
How to enroll in a Medicare Advantage or Medigap plan
Seniors can enroll in a Medicare Advantage or Medigap plan now until March 31, when the Medicare Advantage Open Enrollment Period ends.
Following that, Stidom says seniors have to wait to enroll in a Medicare Advantage or Medigap plan during the fall Annual Enrollment Period, which runs from October 15 to December 7.
“It’s possible to switch to Medicare Advantage, or from one Medicare Advantage plan to another, during the current Medicare Advantage Open Enrollment Period. There is no medical underwriting to go through, and beneficiaries won’t be charged more or declined based on their personal medical history,” she explains. “It’s also possible to switch from Medicare Advantage back to Original Medicare (Parts A and B) during the Open Enrollment Period. However, Original Medicare by itself will leave beneficiaries with significant coverage gaps and out-of-pocket costs when they need medical care.”
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