Medicare Advantage Plans vs Medicare Supplements (Medigap)

When individuals go on to Medicare they will make a choice on how to plug the holes in Medicare- between a Medicare Advantage Plan and Medigap Plan. Medicare Advantage and Medigap plans are both offered through private insurance companies, but they are very different in how they operate.

A Medigap is supplement to Medicare and helps to fill gaps/holes in Medicare A and B. Medicare A and B pay first and the Medigap pays second. Medicare Advantage plans replace Original Medicare and generally provide additional coverage that Original Medicare doesn't cover. Instead of Medicare paying first, the Medicare Advantage Plan is your sole insurance and you fall under a co-pay system.

You can choose to buy one or the other, but you cannot have both a Medigap policy and a Medicare Advantage plan at the same time.

What is the difference between a Medicare Advantage Plan and a Medigap Policy?

One of the most important parts of my job is meeting with clients to educate and explain how the two options differ.  The biggest difference between Medicare Advantage Plan and Medicare supplemental insurance is the way they operate with Medicare.

Medigap policies cover some of the gaps that Original Medicare doesn’t pay for; such as coinsurance, deductibles and coinsurance. For example. Original Medicare only pays 80 percent for Medicare-covered services such as doctors’ services and outpatient medical services and supplies. Most Medigap plans cover that 20%.

Medicare Advantage Plans work differently. Most services, such as office visits, lab work, surgery, and many other services are covered with a co-pay. Any service deemed "preventative" is free of charge. Insurance companies offer HMO or PPO structures options. MAPD all have network of doctors and annual out of pocket maximums to keep costs contained. Most Medicare Advantage Plans include drug coverage; hence where the PD in MAPD comes from. In addition, MA/MAPDs offer extras that Original Medicare does not cover- such as, dental, vision, hearing and more.