Medicare Advantage plans are not the same as Medicare Supplements or Medigap policies. And here are a few key differences between the plans:
- Medigap policy design
Medicare Supplements (also called Medigap policies) work together with your Original Medicare, filling the “gaps” (deductibles and co-payments) in your Medicare Part A (in-patient or hospital insurance) and Medicare Part B (out-patient or physician insurance) coverage. In short, Medicare Supplements provide coverage in addition to your Original Medicare Part A and Part B coverage.
Medicare Advantage plan design
Medicare Advantage plans administer your Original Medicare Part A and Part B coverage. Medicare Advantage plans must offer coverage at least as good as your Original Medicare and often add additional benefits like (limited) vision, dental, hearing and/or wellness programs (such as Silver Sneakers).
Standardized Medigap plans
Medicare Supplements are standardized across most of the country (Plans E, H, I, or J still exist, but are no longer available to new beneficiaries). Example: If your friend has a Medicare Supplement Plan C in Ohio and you have Plan C in Florida - your plans provide the same Medicare Supplement coverage, although you may pay a different monthly premium for your Medicare Supplement as compared to your friend in Ohio. Please note that some states do not offer the same variations of Medicare Supplement plans that are not offered across the country (for instance, in Massachusetts, Minnesota, and Wisconsin).
- Non-standardized Medicare Advantage plans
Medicare Advantage plans are not standardized and can vary from company to company and county to county. Example: If your friend has a Medicare Advantage plan from Company AAA in Summit County, Ohio and you have Medicare Advantage plan from Company BBB in neighboring Portage County, Ohio - the plans may not provide the same coverage - and you may pay different monthly premiums. Medicare Advantage plans can be in the form of a Health Maintenance
(HMO), Preferred Provider Organizations
(PFFS) plan, Medicare Advantage Special Needs
(SNP) plan, and Medicare
Medical Savings Account (MSA) plan.
Medicare Advantage plan benefits are also often presented in terms of co-payments ($XX per night in the hospital) as compared to co-insurance (15% of the cost per night in hospital). Medicare Supplements typically pay the balance beyond Original Medicare Part A and Part B coverage.