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Medicare: A Supplement Plan or an Advantage Plan?

September 5, 2022

The main goal of an independent insurance agent is to help you choose the ideal health insurance plan for your unique budget and health needs. An independent insurance agent can also offer periodic reviews of your situation at no additional cost to you, to make sure you continue to have the best coverage as your situation changes.

If you are approaching 65 and new to Medicare, one of the most important decisions you’ll have to make is whether you enroll in a Medicare Supplement Plan (Medigap) or a Medicare Advantage Plan. While you cannot have both a Supplement Plan and an Advantage Plan at the same time, you can switch from one to the other during special time periods if you meet certain criteria.

Traditional Medicare (Part A + Part B) offers broad service coverage but does not pay 100% of approved charges.  The “gap” can be filled in part or whole by a Supplement Plan. Supplement Plans generally do not cover vision or dental care, hearing aids, eyeglasses, or private duty nursing.


Medicare Supplement Plans

To qualify for a Medicare Supplement Plan, you must be enrolled in both Part A and Part B. Since you can only purchase these plans during defined time frames, missing these opportunities could result in a plan no longer being offered at a future date. As a late enrollee, you also risk being subject to underwriting criteria and higher premiums.

So, what exactly are Medicare Supplement Plans? They are offered by private insurers and known as “standardized” plans because they must conform to Federal and State laws. They are identified by the letters A through N.

Regardless of which insurance company sells the plan, it must offer the same basic benefits. Premium cost is the only difference between plans of the same letter sold by different insurers. Medicare does not pay for the cost of these policies as you, the beneficiary is always responsible for the premium in addition to the Medicare Part B premium.

The differences among the lettered plans are best grasped in a table format. Suffice it to say that Plan F (only available in certain circumstances) and Plan N and Plan G offers the most comprehensive gap fill. The percent of deductibles and coinsurance paid for you varies among the plans. Some plans do not cover certain services, such as foreign travel emergencies or skilled nursing facility coinsurance. To offset this, Plans K and L have annual out of pocket expense limits. Supplement plans do not include a prescription drug benefit.  A Prescription Drug Plan must be purchased separately.


Medicare Advantage Plans

Medicare Advantage Plans are offered by private insurance companies who contract with Medicare to provide you with all your Part A, Part B and Part D benefits. Some offer vision and dental benefits as well. A few Medicare Advantage Plans do not include a prescription drug benefit.

Medicare Advantage Plans can be a Health Maintenance Organization (HMO), a Preferred Provider Organization (PPO), or a Special Needs Plan or Chronic Care Plan. However, HMOs and PPOs are most common. They are assigned a quality rating (1-5 stars) based on a federally monitored program of performance standards. It is in your best interest to check the rating before you make a purchase.

Note that Medicare Advantage Plans have a Managed Care component to monitor and improve quality of care and control costs by reducing unnecessary duplication of services. With these plans, preventive care such as cancer screening and immunizations are highly encouraged. Also, a primary care physician is usually selected, and some services may need prior approval.

In addition, there are panels of in-network specialists. Generally, the larger the enrollment in the local or regional plan, the greater the number of specialists in the network. Out-of-network care may be partially covered on a PPO. All plans have maximums on out-of- pocket expenses.

The Annual Enrollment Period (AEP) is October 15-December 7, 2022
If you would like to make an informed decision and select the right plan for your future health needs, make a free consultation appointment by calling me, Yvonne Tepsick, an independent insurance agent at 352-350-6663. I look forward to hearing from you!

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