Medicare Advantage vs. Medigap: What is the real difference

Medicare Advantage vs. Medigap

Medicare Advantage vs. Medigap: What is the “real” difference When comparing these two types of plans, it’s very easy to get confused. They both have similar prefixes and various parts beginning with letters of the alphabet. So let’s start cutting through all the confusion.  There are significant differences in how each one will cover doctors and hospital charges for you.  Understanding how they work and what they cover is very important. It is also important to know whether your doctor or even your local hospital is covered as an in network provider.  What happens if you travel to a warmer climate for the winter…  will you have coverage there as well?

For starters, what exactly is Medicare?

Medicare is a federally sponsored program under the supervision and control of the Department of Health and Human Services and the Federal Center for Medicare and Medicaid Services for those 65 and older and for those with disabilities who may qualify for some Medicare benefits at a younger age. While Medicare does cover many health services and products that are deemed medically necessary, it does not cover everything. There are four Medicare parts, these are explained below.

 Medicare Part A

This part of Medicare covers your basic hospital insurance. It covers SOME of the costs associated with skilled nursing facilities, home health care, hospice care, and inpatient care in hospitals. Medicare Part A only covers about 80% of the costs associated with the services above.

Medicare Part B

This portion of Medicare, knows Part B, covers your general medical insurance. It covers SOME of the costs associated with doctors’ services, preventative care, and services as well as outpatient care…  but there are limitations.

 Medicare Part C

This is the portion of Medicare where you will find what is known as Medicare Advantage Plans or also Medigap or Medicare Supplement Plans. These are private plans that are approved by the federal government and include parts A and B as well as other costs such as some prescriptions.

Medicare Part D

This is the most recently added part of Medicare. This is Medicare’s prescription drug coverage plan, also known as Part D, that is provided through private insurance companies via a contract with Medicare. This part covers some of the costs associated with prescription drugs.

If you have a good grasp of the various Medicare parts listed above, then you are well on your way to ensuring that you get the best coverage.

 So what is a Medigap policy?

Medigap is short for Medicare supplement insurance plans. These are plans through private insurance companies that have been created to help cover the “gap” in coverage left by the various Medicare parts listed above. These gaps include the 20% not covered by Medicare, co-insurance, co-payments as well as deductibles. While Medigap plans do cover the majority of the gaps in coverage left by original Medicare, they do not cover private nursing, dental, vision or long-term care.

It is very important to note that Medigap plans ARE NOT the same as Medicare Advantage plans. Medigap plans simply provide coverage for benefits not included in original Medicare while Medicare Advantage plans are ways to get Medicare benefits through private insurers… bit there may be many charges not provided by a Medicare Advantage Plans.

 Federal Standardization of Medigap Plans

 While Medigap plans are available through various private insurers such as United Healthcare, Medical Mutual and Anthem Blue Cross Blue Shield, each plan must follow standardized state and federal laws. The different Medigap plans have been labeled with the letters A through L and each plan is very similar across the board, making it easy to compare plans.  While the separate Medigap plans offer the same benefits, private insurers are not required to charge the same price.

Confused, call for my free consultation at 877-549-1212.  I have been helping people understand and navigate Medicare for over 29 years.

Tracy McManamon on Google+