As members move into the Medicare delivery system, they soon come to realize Original Medicare will not cover all of their medical expenses. Members are left with deductible, copayment and coinsurance responsibilities, with no cap on the amount of out-of-pocket costs they can incur over the course of the year. For this reason, nearly all Medicare members choose to add additional coverage, giving them predictable healthcare costs and valuable peace of mind knowing their out-of-pocket responsibilities fit their budget.
So, what are your additional coverage options as a Medicare member?
The number one question I get when enrolling a member revolves around the difference between a Medicare Supplement and a Medicare Advantage plan. Yes, they are very different, but both delivery systems provide outstanding coverage options. I truly believe there is no wrong decision when it comes to deciding between the two. With that said, I find when I sit down and go over each option with my clients, one of the two will jump out as fitting their health, lifestyle and budgeting concerns.
Medicare Supplements work alongside Original Medicare to pick up the deductible, copayment and coinsurance responsibilities not covered by Original Medicare. With a Supplement, when you receive a bill for medical services, Medicare will pay its portion and your Supplement will pick up most if not all of the additional costs not covered. Medicare Supplement plans are standardized, meaning benefit is going to be the same regardless of insurance carrier. Each carrier prices their products differently. Some use issue-age pricing, some are community rated and most use attained-age pricing models, meaning as you age your monthly premium will go up. However, it cannot and will not increase based on health status. Your monthly premium will be higher for a Medicare Supplement compared to a Medicare Advantage product, but your out-of-pocket costs will be less. Medicare Supplement Plan G, the most popular Supplement we sell today, leaves you responsible for the Part B deductible of $198 in 2020. After satisfying this deductible you are covered 100% for healthcare services, meaning your out-of-pocket costs for the year add up to only $198. Because Supplements work alongside Original Medicare, you are able to see any doctor or hospital that takes Medicare. This is a big distinction between a Medicare Advantage plan, where you are usually required to utilize a network of providers. More on that in a minute. Original Medicare paired with a Supplement will not cover everything. Some things not covered by Medicare or your supplement include:
• Routine Dental
• Routine Vision
• Routine Hearing
• Hearing Aides
• Contacts or Glasses
• Prescription Drugs
One of the major differences between a Supplement and a Medicare Advantage plan is prescription coverage. A Supplement does not include prescription coverage, you would need to obtain coverage through a standalone Part D product. On the other hand, most Medicare Advantage plans include Part D prescription coverage under the same, low monthly premium.
Medicare Advantage plans are administered by private insurance companies, who file their plans every year with Medicare to get approval. They are the plans you see all of the advertisements for. If Joe Namath has ever popped up on your television screen talking about Medicare, Medicare Advantage plans are the products he is referring to. Plans function similarly to a private insurance or employer sponsored plans, but benefits are much richer across the board. With Medicare Advantage products, you pay a set copayment each time you receive a medical service. Cost varies depending on the type of service you receive. Each plan includes a Max Out-Of-Pocket, often referred to as the MOOP. The copayments you pay each time you receive services accumulate towards this Max-Out-Of-Pocket. Once you have met the MOOP, you are covered 100%. This means you will never pay more than your plans maximum, regardless of the amount of healthcare you need.
Aside from predictable costs, the two things that make Medicare Advantage products attractive are the price point and the host of additional benefits included. Medicare Advantage plans are priced substantially lower than Supplements, and there are even many zero premium plans available. As mentioned earlier, most plans include prescription drug coverage, meaning you can get all the medical and prescription coverage you need for no additional monthly cost. Keeping the same low price point, Medicare Advantage plans also include a host of additional benefits not covered by Medicare or Supplements. Many plans include a full comprehensive dental benefit, vision/eyewear coverage and hearing/hearing aid coverage. Plenty of plans also include transportation services, telehealth services, in-home meal delivery, over-the-counter spending allowances, free gym memberships and more. The one thing to note with Medicare Advantage plans, is the fact that most require you to utilize a network of doctors. As these plans have gained popularity, their networks have grown to include the vast majority of doctors and hospital systems. I always recommend doing a provider search to ensure your current doctors and providers are in-network, in order to eliminate any surprises throughout the year.
Need Help Deciding Between A Medicare Supplement and Medicare Advantage?
While this article highlights some of the nuances and differences between the Medicare Supplement and Medicare Advantage delivery systems, each individual product will have its own advantages and disadvantages. Should you need help deciding between a Medicare Supplement and Medicare Advantage plan, or would simply like your options explained to you in more detail, Contact the Medicare experts at Burchfield Insurance today.
