Which is better in 2019?: Medicare Advantage plans vs Medigap plans

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Sometimes, Original Medicare just doesn’t cut it. Perhaps the costs you are left paying after an extended hospital stay are too high. Maybe you need chemo treatments, and the expenses are adding up quickly. Medicare alone does not cover all your medical costs. For instance, there is a $1,364 deductible for hospital stays. For outpatient treatments, beneficiaries pay 20% of the cost. That’s why many people choose to purchase additional insurance to help cover medical expenses. For those looking for more benefits than what Original Medicare offers, there are two options: Medicare Advantage plans and Medigap plans. It’s important to know that Medicare Advantage plans and Medigap plans cannot be purchased together, and some people choose not to buy either. In 2017, 33% of Medicare beneficiaries decided to purchase a Medicare Advantage plan, and around 20% opted for a Medigap plan. Let’s take a look at some pros and cons of the two plans.

Medicare Advantage plans

Medicare Advantage plans are purchased as an alternative to Original Medicare. They are required to provide the same benefits as Original Medicare (Parts A and B) but also usually offer additional benefits, such as prescription drug, vision and dental coverage. Medicare Advantage Plans exist as HMOs and PPOs.


Compared to Medigap, Medicare Advantage is usually more budget-friendly, as the monthly premium is typically lower, sometimes as low as $0!  According to the Kaiser Family Foundation, 90% of Medicare beneficiaries can access one or more $0 premium plans. Although $0 premium plans exist, the average premium for a Medicare Advantage plan with prescription drug coverage is $40 per month.

Other costs associated with using the plan:

Aside from the monthly premium, Medicare Advantage plans have copays, co-insurance and annual deductibles for which the beneficiary is responsible. In 2019, out-of-pocket maximums for Medicare Advantage can be as high as $6,700.

Prescription Drug Coverage:

Nearly all Medicare Advantage plans include prescription drug coverage. If the one you choose lacks it, you may be able to add a stand-alone Medicare Part D Prescription Drug Plan.

Ease of finding a provider:

Medicare Advantage plans are network-based, so your choice of physicians could be limited to those who have opted to accept Medicare Advantage. Not every doctor accepts these plans, and you will have to find one who does.  Finding a plan doctor in a rural area could be particularly difficult because these areas often have a shortage of doctors.  Want to know if the doctor you currently see accepts Medicare Advantage? Call us[link to phone number], and we’ll check for you!

Will I qualify?:

Pre-existing conditions do not disqualify you from Medicare Advantage. The only exception to this is End Stage Renal Disease. There is an open enrollment period at the close of every year, from October 15 – December 7. You can enroll and re-enroll during this time, which gives you the freedom and ease to try a plan from a different company.

Medigap plans

A Medigap plan provides supplemental coverage to your Original Medicare Plan. Original Medicare covers expenses related to hospital stays and most other medical services. However, there are some things original Medicare does not cover, and that’s where Medigap can help. Medigap covers expenses that are normally your responsibility when using Original Medicare. Medigap cannot be purchased and used by itself. It must be used as a “supplement” to Original Medicare.


A Medigap monthly premium is usually higher than that of a Medicare Advantage plan. The most popular Medigap plan, Plan F, averaged $143 per month in 2018.  The tradeoff is that Medigap plans typically have lower out-of-pocket expenses for services.

Other Costs associated with using the plan:

Unlike Medicare Advantage plans, Medigap plans don’t usually cover things such as prescription drugs, dental, and vision. Medigap plans also tend not to cover long-term care and private-duty nursing. However, some Medigap plans don’t require copays, and the plans that do have copays and deductibles still have very low limits on out of pocket costs.    Even better, Medigap pays doctors directly, without your involvement. Therefore, there are not any claim forms to fill out, and very few medical bills requiring reconciliation.

Prescription Drug Coverage:

Medigap plans only include coverage for drugs administered in a hospital. They never include coverage for prescription drugs received through a pharmacy. Because of this, you may be left covering all prescription expenses yourself or else purchasing a stand-alone Medicare Part D Plan to cover their cost. You can buy a Part D plan to cover prescription drugs for under $20 per month.

Ease of finding a provider:

Any doctor who accepts Medicare accepts Medigap. 90% of doctors in the United States currently accept Medicare, so you will be able to use almost any doctor in the United States.  Also, there is no referral necessary to see a specialist.

Will I qualify?:

Acceptance to a Medigap plan is not guaranteed. You can be turned down due to a pre-existing condition. The only way to avoid this is to enroll within six months of signing up for Medicare Plan Part B or within six months of turning 65. You can apply for Medigap at other times, but you run the risk of not being accepted. After your acceptance in the plan, the plan cannot cancel you as long as you pay the required premium.

Which is right for me?

If you typically have high medical costs, you are better off with a Medigap plan. The premiums may be higher, but your out-of-pocket costs will be lower. If you are generally in good health, a Medicare Advantage plan may lower your out of pocket costs. However, due to the medical underwriting required to join a Medigap plan, you cannot wait until you are facing high medical bills to join a Medigap plan. You need to take into consideration what would be best for you in a worst-case scenario. Because after all, the reason you purchase health insurance to cover healthcare costs when you get sick.

As you can see, there are some important things to consider before you make your decision. Whether you’re ready to sign up for a Medicare Advantage or Medigap plan, or if you’re confused about your options, we can help! Give us a call 662-844-3300 or contact us here.

Reference: https://www.kff.org/medicare/slide/total-medicare-advantage-enrollment-1992-2014/

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Justin Brock

President & CEO of Bobby Brock Insurance