Comparing Medicare Advantage vs Medigap – Which is Better?

Deciding between Medicare Advantage or Medigap to supplement Original Medicare Parts A and B brings up lots of key comparisons when determining the better supplemental policy for your needs. Advantage plans and Medigaps both strive to curb out-of-pocket healthcare expenses, yet numerous differences emerge in costs, benefits, doctor access, drug coverage and more.

Kicking off the Medicare journey involves learning these plan variances, as well as strategies tailored for affordability if living on restricted income. Read on for a full rundown contrasting Medicare Advantage, Medigap and even Medicare Select options when evaluating added coverage.

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Weigh Provider Access Between Medicare Advantage or Medigap

One of the first comparison factors that often sways retirees decision between Medicare Advantage or a Medicare Supplement is provider access restrictions.

Medicare Advantage plans frequently limit coverage to in-network physicians, hospitals and facilities. Exceptions include PPO Advantage plans offering some out-of-network access, albeit at higher prices. Further access issues arise if needing specialty care. Prior authorizations and referrals also apply with certain Advantage plans.

Conversely, Medigap insurance puts no restrictions on seeing providers accepting Medicare assignment regardless if they’re contracting network physicians or not. Most Medicare doctors nationwide participate. This gives flexibility for snowbirds spending extended time away from home to easily utilize care. It also offers access to nationwide specialists without any approvals required.

Keep in mind that some Medicare Select plans do only cover providers within contracted networks. So read plan details carefully when taking this more budget limited supplemental option.

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Review Potential Drug Coverage Differences

Prescription medication needs influence if Medicare Advantage or another supplemental policy makes more sense.

The vast majority of Medicare Advantage plans integrate Part D prescription drug coverage seamlessly into medical benefits with $0 or low premiums. Some may limit formulary drug access through prior authorizations or step therapy. Specialty drug coverage availability can also vary between plans.

In comparison, Original Medicare has no built-in drug benefits. Those selecting a private Medigap plan to supplement Part B expenses must enroll in a standalone Part D Prescription Plan from a different insurer. That translates to paying an additional premium. Plus Medigap itself does not assist drug costs beyond covering annual deductibles charged by separate Part D plans.

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Medicare Select policies, which function similar to Medigaps but at lower premium costs, also lack integrated drug benefits. So again, a distinct Part D plan gets factored into overall policy expenses.

Check formularies and prescription details accordingly with all plans under consideration. Having medications covered under one integrated plan at cheaper costs frequently motivates choosing Advantage.

Assess Cost Differences Between Medicare Supplements

Because coverage distinctions emerge between Medicare Advantage, Medigap and Medicare Select, out-of-pocket costs also swing widely.

The lion’s share of Advantage plans appeal by having $0 monthly premiums or premiums well below other policy options. Some HMO or HMO-POS plans charge $20 to $100 per month. Tradeoffs come in copays, deductibles and maximum out-of-pocket limits averaging $6,700 in 2023 that must get met using in-network providers to minimize expenses.

Standardized Medigap Plan F, Plan G and Plan N options run $150 to above $250 monthly, yet provide thorough coverage of Medicare-approved service copays, coinsurance and deductibles regardless of doctor seen. The freedom to visit any provider without worrying about networks makes them popular despite steeper premiums. Still, no annual out-of-pocket maximums exist.

Cheaper Medicare Select plans cost between $85 to $150 per month while covering copays, coinsurance and deductibles in full when staying in-network. Their premiums get offset by needing to see contracted physicians to receive 100% benefits. Using out-of-network doctors means you’ll owe 20% or more of costs.

Carefully connect all dots between premiums, drug coverage and potential healthcare costs under each “better” scenario. What saves money long run differs significantly person to person.

Lean on Resources to Determine Appropriate Medicare Supplements

Rather than struggle through comparisons solo, experts stand eager to explain plan differences in relation to individual health/financial needs:

  • State Health Insurance Assistance Programs (SHIPs) – Receive free, unbiased one-on-one Medicare guidance.
  • 1-800-MEDICARE – Federal Medicare representatives field questions and offer plan clarification.
  • Insurance Brokers – Connect with independent or captive brokers to understand how plans operate relative to total costs.
  • Medicare.gov Plan Finder – Use interactive online tools showing detailed pricing, benefits and coverage for all local plan options.

Getting personalized assistance provides confidence for determining suitable supplemental coverage better addressing healthcare priorities as affordably as possible.

In summary, choosing between Medicare Advantage or alternatives like Medigap or Medicare Select relies heavily on comparing networks, physician access, prescription drug coverage intricacies and unknown out-of-pocket variables. Guidance from experts simplifies making an optimal plan selection.

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