Medicare Advantage Vs Medigap
Medigap Vs Medicare Advantage – What Should You Choose?
As a broker I’m always asked “what should I choose, an advantage plan or a Medigap plan?” My answer is simple. “There is no right way or wrong way, you have to choose what’s best for you, but I will outline both plans so you can make the best choice that fits your needs.” Based on that I will make recommendations to my prospects after an extensive Q&A of their current health and what they like or don’t like. Let’s take a few minutes to go over the differences right now.
Medicare Advantage Plans
When choosing a Medicare Advantage plan you must realize you are giving up your Medicare as your primary insurance. Meaning the Advantage plan takes over for Medicare and makes all the rules regarding your health care and sets forth cost sharing, such as copays for doctor and specialist visits, impatient hospital care which can usually cost a couple of hundred dollars each day you are hospitalized, X-rays, lab services, outpatient procedures, ER visits, radiology etc. Your doctor may say you need an MRI, an x-ray, blood test or etc.
Your doctor then has to submit a request for approval to your insurance plan for the specified treatment or test. In some cases the insurance company can deny the request and the doctor then has to file another submission to try and get an approval to treat you.
Most HMOs require referrals for specialist visits. If I ask each senior in every house I visit if they mind referrals I always get a different answer. Some hate them and will not purchase a plan that requires needing a referral and some people don’t mind them at all. If you purchase a PPO Advantage plan they do not require referrals needed to see a specialist.
The one problem I find and don’t like about Advantage plans is that they only cover 80% of the cost for cancer treatments such as chemotherapy and radiation therapy, the other 20% is the responsibility of the insured. I harp on this portion of my presentation because of the high cancer rate in this country. You feel great one day and then the next day you’re diagnosed with some form of cancer. It happened to my father, out of the blue he was diagnosed with prostate cancer.
My point is you just never know when it’s going to hit or who it’s going to hit, it can happen to anyone. Cancer does not pick and choose a particular age group, gender or race, we are all at risk at any time.
I have met a lot of seniors during my career who have had Advantage plans and needed some form of chemo or radiation treatment and the 20% cost to them is a lot of money out of their pocket, in most cases hundreds of dollars for each treatment. In some of these situations life savings were depleted. The bottom line is if you decide an Advantage plan is the right plan for you make sure you ask your agent to show you a Hospital Indemnity plan.
Hospital Indemnity plans work hand in hand with Advantage plans because they can fill in the gaps regarding copays, deductibles and the 20% out of pocket costs for cancer treatments. And the great thing about these Indemnity plans is that they are inexpensive and you can add on additional benefits.
Most Advantage plans have drug plans built into the plan, meaning you don’t need to purchase any additional prescription coverage. Of course they have tiers and you pay a certain copay for a prescription depending on which tier that script falls in.
The biggest concern you must think about when purchasing and Advantage plan is whether or not your doctor is in the plan network. If your doctor is not in the plan network you must choose a new doctor or find another plan that your doctor accepts. Sitting with thousands of seniors myself I can tell you that 99.9% DO NOT want to change their doctors and rightfully so.
Some Advantage plans cover preventative dental, vision and hearing. Meaning a small copay for covered services such as dental cleanings, x-rays, fillings, eye exams, new glasses, hearing exams etc.
When you purchase an Advantage plan, that insurance will be your plan for the entire year. You can’t just wake up one morning and decide to switch Advantage plans or drop your Advantage plan and switch to a Medigap plan. You can only switch during the enrollment periods.
You have AEP which runs from October 15th to December 7th for a January 1st start date. You also Medicare Advantage Disenrollment Period from January 1st to February 15th in case you feel you made a mistake during AEP. Or you may qualify for a SEP which means a special election period.
— BGA Insurance Group (@BGA_Insurance) March 15, 2016
Also known as Medicare supplement plans is where Medicare A & Medicare B is your primary health insurance and you then purchase a Medigap plan to cover the gap Medicare doesn’t pay for. Basically your A & B covers about 80% of hospitalizations, ER visits, doctors and everything else “medically necessary”. So for example, if you need open heart surgery and you’re hospitalized for 8 days, your Medicare A&B will cover about 80% of the cost and depending on which Medigap plan you purchase it should cover all or mostly all of the 20% gap.
Something else to think about when purchasing your Medicare insurance. Unlike Advantage plans where your doctor has to get approval to treat you for certain tests outlined earlier, under Medicare if your doctor says you need the treatment, it’s usually covered as long as your doctor codes your treatment correctly when submitting billing to Medicare. Medicare usually abides by what your doctor says you need, which means you are in control of your own health care.
If you purchase a Medigap plan you have an open network throughout the United States, meaning as long as the doctor, specialist or hospital accepts Medicare your Medigap plan is automatically accepted. Most Medicare recipients love this benefit because they like to travel and they don’t have to worry about if their insurance is accepted or not in the case of an accident or health issue.
Medicare or your Medigap plan does not require referrals when needing to see a specialist. If you have an issue that you can only see a specialist for you just book the appointment and go, you do not need special permission or approval from your primary doctor or Medicare.
Also earlier I talked about cancer treatments such as chemotherapy and radiation therapy and that Advantage plans only cover 80%. With Medicare as your primary, chemo and radiation therapy is covered and your supplement plan will pick up the other 20%. This gives most seniors piece of mind and comfort.
Medicare or your Medigap plan does not have built in drug coverage like an Advantage has. If you decide on Medicare as your primary insurance you need to purchase a stand-alone prescription plan at an additional monthly premium. A lot of folks I meet are confused when trying to figure out which PDP plan is right for them so I take away that burden. As their broker I will sift through all the various drug plans and find the one that will save them the most money each year. Not only will I do it the first time but every year after that. It’s a free service I like to provide my clients because I really do enjoy when I can save them money each year. As a matter of fact every BGA agent offers this service to their clients.
Medicare or your Medigap plan does not cover routine dental or routine eye exams. However if you have a medical condition such as cataracts or glaucoma it is covered under Medicare and your Medigap plan. BGA Insurance does offer additional coverage for dental, vision and hearing that is inexpensive and would be separate from your Medicare.
Like I said earlier, you have to choose what is right for you. When I sit down with a senior those answers they give me to my questions regarding their health, likes and dislikes enables me to point them in the direction they should go in. But before that I outline both plans extensively so they understand how it all works when choosing Medicare insurance. The great thing about having both Advantage and Medigap plans available to you is that you can decide what benefits are important and also what premium you can afford. It’s nice to have options.
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