Medicare Advantage vs. Medicare Supplement Plans

Michael T. Braden August 21, 2024 Medicare 101

Coke or Pepsi? Domino's or Pizza Hut? Miller Lite or Bud Light? Burger King or McDonald's, Popeye's, KFC, or Chick-fil-A? Everyone has their own preference for what tastes best. And, Medicare Insurance is no different. Aside from "Why Is Medicare Not Free," the second most-asked question from our clients is: "Which Is Better, Medicare Advantage or Medigap/Medicare Supplement plans?"

Braden Medicare Insurance Poster with the heading "Medicare Advantage vs Medigap.

In all fairness, I believe 100% of Independent Medicare Brokers will tell you that Medicare Supplements paired with Original Medicare offer superior coverage, flexibility, and predictability than any Medicare Advantage plan available. This is because it provides better benefits and access to quality healthcare. Over your lifetime, the combination of Original/Traditional Medicare with a Medicare Supplement Plan N, G, or F will have the lowest exposure to financial risk. But everyone with Medicare has a choice, and it is essential to do your best to make the most out of your decision.

Many factors come into play; the first is that Healthcare is Personal. As such, everyone has a different view of what is most important to them and their families regarding healthcare. Do you travel? Do you like being in control of your Healthcare? Do you prefer to see a Primary Care Provider, or would you want referrals to a specialist? How large is your rainy Day Fund? What plans are available in your area? Do you wear glasses or contacts? Have you had any Health Scares? Do you take Prescription Medications, etc?

Another key but inexact thing to do is not to think about your health and your healthcare needs at 65, because you will only be 65 for a year. You need to try to project what you think your life and, more importantly, your health will look like over the next 5, 10, and 20 years. I know that is difficult, but look back and reflect on your older family members, remember when they were 65 and then at 75 or 80? Eventually, life and Father Time set in, and we realize we are no longer in our 40s or 50s and are not bulletproof. I know it isn't easy to predict, but you will not be able to thoroughly compare your needs unless you complete this exercise to the best of your ability.

In this brief article, we will discuss the key differences between Medicare Advantage Plans and Medigap Plans. For more detailed information, you can find much more information on all things Medicare on our website at www.bradenmedicare.com and on the www.medicare.gov website.

How To Compare Medicare Advantage vs. Medigap Plans

If you are new to Medicare or want to change your plan, finding one with the right health benefits for you is essential. When deciding which plan to enroll in, your first step should be to choose between Medigap and Medicare Advantage plans. Understanding which plan type best fits your needs is the top priority when enrolling in coverage. And, remember, you only have one chance to enroll in any Medicare Supplement Plan that you desire during your one-time, Initial Enrollment Period (IEP).

Many people think they can get by on the cheap for a few years. Still, if you run into a big health situation or health scare, you may not qualify for a Medicare Supplement or Medigap plan down the road, because you will have to pass the Medical Underwriting process. We have seen too many adverse outcomes for good people, so please do your homework and put careful thought into your decisions. If you do that, whatever you choose (Medicare Advantage or Medicare Supplement/Medigap) will be the best plan for you.

There are many differences between Medicare Advantage vs. Medicare Supplement plans. It is crucial to research and thoroughly understand how each plan type works before making a decision. You are not alone in your research, and we are here to help you every step of the way.

Note: Consider your children and your spouse when making your decision, and involve them as much as possible. Why? The answer is simple: eventually, whether you like it or not, or want to think about it or deny it, there is a high likelihood that they will be the ones in charge of your healthcare. And you may not believe this, but spouses, children, and grandchildren always want the best coverage and care for their parents and grandparents more than most people want for themselves.

The Major Differences Between Medicare Advantage Plans and Medigap (Medicare Supplement) Plans

While Medicare Supplement plans pay secondary to Original Medicare, Medicare Advantage plans become your primary source of coverage when you enroll. Did you know that Medicare (The US Government) Medicare pays about $1,000 per month to the Medicare Advantage Insurance Companies, simply for taking on the risk of your healthcare? The idea is that this covers your healthcare expenses. In reality, this is where most Medicare Advantage plans get the money to advertise heavily and offer additional benefits not allowed under Original Medicare.

When Medicare was established, the idea was to give older Americans access to hospitalization and healthcare in retirement. Eventually, Insurance companies lobbied the House of Representatives and the U.S. Senate to offer "alternatives" to Original Medicare. This was when President Clinton signed Medicare Part C (C stood for Choice at the time) into Law. Later, President George W. Bush signed Medicare Part D into law.

As with your taste in food and beverages, mentioned at the start of this article, depending on your lifestyle, budget, and medical coverage needs, one type of Medicare plan will suit you better than another.

The Pros & Cons of Medicare Advantage and Medigap/Medicare Supplement Plans

There are several differences between Medigap vs. Medicare Advantage plans. A Medicare Advantage plan (Medicare Part C) is structured as an all-in-one option with low monthly premiums.

Medicare Supplement plans offer additional coverage to Original Medicare with low to no out-of-pocket costs. The chart below reviews the pros and cons of Medicare Advantage and Medicare Supplement plans.

Braden Medicare Insurance Graphic Slide entitled "The Pros & Cons of Medicare Advantage and Medicare Supplement/Medigap plans.

When it comes to Medicare Advantage vs. Medicare Supplements, the most common complaint we hear from our clients is that they cannot accurately predict their out-of-pocket costs when enrolled in a Medicare Advantage plan. They are also shocked that there are so many hoops to jump through, and many times they have been stalled by needing to get 2-4 second opinions before receiving treatment for their condition. They find out the hard way that having a Medicare Advantage Plan is like the Man Behind The Curtain in the Wizard of OZ, because your insurance company sadly has the final say on your coverage and your treatment, you don't, and sadly, neither does your doctor.

On the other hand, the biggest compliment we hear from clients is regarding Medicare Supplement plans. Most beneficiaries choose Medicare Supplement plans for their ease and reliability. The option to see any doctor who accepts Original Medicare is the cherry on top of Medicare Supplement plans.

Brazden Medicare Insurance is showing an Apple next to a Pear with the heading of Medicare Supplement vs Advantage

Which Plan Is Better in the End, a Medicare Advantage Plan or a Medigap Plan (Medicare Supplement)?

Medicare does not offer a one-size-fits-all plan. The best policy for you is the one that best meets your healthcare needs.

Medicare Supplement plans are the best option if you want complete reassurance and predictability with your healthcare, but are comfortable paying higher premiums in exchange for lower out-of-pocket costs.

In contrast, Medicare Advantage plans are the best option if you hope to save on monthly premiums and receive additional benefits while accepting responsibility for additional out-of-pocket costs at the doctor’s office.

For overall ease and reliability, our recommendation is always Medicare Supplement plans. However, we know that may not work for everyone. Our goal is to provide you with your best options regardless of plan type.

Wrapping Things Up

Do you want predictable costs, the freedom to choose any doctor, avoid referrals, and peace of mind while traveling? If you answered yes, you are looking for a Medicare Supplement plan.

Are you comfortable with unpredictable copayments, strict doctor networks, and referrals in exchange for a lower monthly premium and additional benefits? If your answer is yes, Medicare Advantage may be a good fit for you.

The best part of working with agents is that, no matter which option you choose, we ensure it is the best fit for you.

Perhaps you are already thinking about making the switch from a Medicare Advantage to a Medicare Supplement plan, or the other way around. If you need further assistance or would like more information beyond what we've provided in this article, please contact me directly at mike@bradenmedicare.com.