There are many options when it comes to choosing Medicare coverage that it can feel overwhelming and leave you feeling a little confused. If you're considering whether you should purchase Medigap or Medicare Advantage, knowing the difference can help you make the right decision for your health needs.
Only beneficiaries enrolled in traditional Medicare are eligible to purchase a Medigap policy. With this type of coverage, private insurance companies offer plans to cover some or most of your out-of-pocket expenses that Original Medicare doesn't cover. There are a total of 10 Medigap policies and each is standardized by law, which means that the benefits are the same; however, the difference is are the premiums so you'll want to be sure to shop around.
Medigap does not cover prescription drugs. Individuals who have a Medigap policy but wish to also have coverage for medications will need to buy a Part D plan.
If you have a Medigap policy, you'll have to pay a monthly premium. These plans are also typically offered as fee-for-service plans where you can typically see any doctor you prefer, whether they are in network or not, but you'll be left to submit claims on your own.
Those interested in Medicare Advantage should know that it is offered as an alternative to traditional Medicare. If you have Medicare Part A or Part B then you are not eligible to enroll in Medicare Advantage.
Advantage plans are typically offered as HMOs and PPOs and all plans must cover the same services as traditional Medicare. The difference is in the lower copayments and extra benefits not seen with Medicare coverage. Most Advantage plans also include prescription drug coverage and some cover services such as hearing, dental and vision screenings. When you have an Advantage plan, you'll likely have a lower premium than what you would be total for Part D and Medigap combined.
You will also need to find a physician within the service network for Medicare Advantage plans. If you decide to go to a doctor outside of your plan's network then you may be left to cover up to 100 percent of the cost on your own. Advantage plans also require individuals to make a copayment each visit compared to Medigap, which is there to cover that cost.
If you have Medicare Advantage you cannot also buy a Medigap policy and vice versa.