Medicare Advantage vs Medicare Supplement

Quite often, when deciding between Medicare Options, the choice boils down to whether to go with a Medicare Advantage Plan (Part C) or stick with Original Medicare (Part A and Part B) and add a Medicare Supplement Plan. This is an important decision so choose wisely.

Go to the Related Articles links at the end if you are not already familiar with the basics of Medicare Advantage and Medicare Supplement Plans.

Medicare Advantage vs Medicare Supplement

How do you decide between Medicare Advantage and Medicare Supplement? They are mutually exclusive so you need to make a decision. In this article we compare them on the basis of Cost, Coverage, Enrollment, Quality and Accessibility, which should help you in making the right decision for your needs.

Cost

Generally, Medicare Advantage plans have lower premiums with higher cost-sharing e.g. deductibles and co-pays. Medicare Supplement plans have higher premiums with minimal cost-sharing (depending on Plan Type) since they are meant to help with out-of-pocket costs.

MA Plans have a cap on out-of-pocket expenses, after which the plan pays 100%. Medicare Supplement Plans do not have a cap (except for Types K and L) but that may not matter much if the plan is picking up most of the Medicare expenses anyway.

MA Plans may have limited networks. You may pay more if you go out-of-network. However, premium for a plan is the same for everyone in a service area irrespective of age or health status. For Medicare Supplement, you may end up paying substantially higher premiums if you do not enroll while you have guaranteed issue rights. Also, premiums may go up based on age.

In brief:

Medicare Advantage (Part C) Plans

Usually have lower premiums with higher cost-sharing,
You may pay more if you go out-of-network,
Premiums do not vary by age or health status.

Medicare Supplement Plans

Usually have higher premiums with minimal cost-sharing,
May cost more without guaranteed issue rights,
Premiums may increase with age.

Note that whichever Option you choose, you will continue paying Part B premiums (and for Part A, if applicable).

Coverage

At a minimum, Medicare Advantage plans have to offer the same coverage as Part A and Part B (exceptions exist). Since Medicare Supplement plans are an optional add-on on top of Original Medicare (Part A and Part B), the question really is what additional coverage is offered by MA and Medicare Supplement plans beyond Parts A and B.

Quite often, MA plans include Part D prescription drug coverage. Many Medicare Advantage plans also offer additional benefits like dental, vision and hearing coverage and some plans include wellness and transportation benefits.

Medicare Supplement plans, on the other hand, are meant to help with Medicare costs and therefore do not usually provide additional benefits. Every Plan Type has standardized benefits. You may need to enroll into a standalone prescription drug plan (Part D) to get drug coverage.

In brief:

Medicare Advantage (Part C) Plans

Provide coverage similar to Medicare Part A and Part B,
Often bundle prescription drug coverage (Part D),
Additional benefits may be included like dental, vision and hearing coverage.

Medicare Supplement Plans

Layered on top of Medicare Part A and Part B,
Plan Types have standardized cost benefits,
Separate Plan needed for prescription drug coverage (Part D).

Enrollment

During initial enrollment into Medicare, both Options are available to you. You may go with Medicare Advantage during your Initial Enrollment Period (IEP) or decide on Medicare Supplement during the Medicare Supplement Open Enrollment Period when you qualify for guaranteed issue rights.

Once the IEP and Medicare Supplement OEP are over though, things are different. You have the opportunity to change your Medicare Advantage Plan every year during the Open Enrollment Period (also called OEP or AEP) when you may also go back to Original Medicare (Part A and Part B).

However, OEP/AEP does not apply to Medicare Supplement. As a result, it may not be easy to enroll into or switch to a different Medicare Supplement plan later. Even if you are able to do so, guaranteed issue rights may not apply resulting in substantially higher premiums for the new Medicare Supplement plan. Rules vary by State.

You may switch from Medicare Supplement to Medicare Advantage in any year, but doing the reverse is usually much more difficult and may result in higher costs unless you qualify for a recognized special circumstance.

In brief:

Medicare Advantage (Part C) Plans

Initial enrollment during IEP (Initial Enrollment Period),
Opportunity to change plan every year during OEP/AEP,
May switch between Original Medicare and MA during OEP/AEP.

Medicare Supplement Plans

Enrollment recommended during Medicare Supplement Open Enrollment Period,
Guaranteed Issue Rights may not be available after Medicare Supplement OEP,
Switching to a different plan may not be possible or may cost more (rules vary by State).

Quality

CMS assigns star-ratings to Medicare Advantage plans based on numerous factors. These range from 1 to 5 stars, with 5-Stars being the highest. These ratings may help you get some idea about a plan’s performance, customer service, screening tests, chronic condition management and member experience.

Note that these ratings may not be available or stable for newer MA plans.

Medicare Supplement plans do not have star ratings. In fact, the word ‘quality’ may not have a direct bearing on Medigap plans since they mostly help with the cost of care but do not provide the care itself.

In brief:

Medicare Advantage (Part C) Plans

Star Ratings are available,
Newer plans may take time to reach a stable rating,
Ratings should be considered along with other factors.

Medicare Supplement Plans

No quality ratings since plans are meant to help with cost, not care,
Plan Types have standardized cost benefits,
Separate Part D prescription drug plan may have Star Ratings.

Accessibility

It is important to know that you will have easy access to care from providers you trust. There may be lots of plan choices out there but if they are not easily accessible it may not matter to you. Availability and accessibility of care are important factors to consider.

Since many Medicare Advantage plans have limited networks, you may want to check whether your preferred doctors and hospitals are covered by a plan’s network. Some MA plans may also need you to choose a Primary Care Physician (PCP) and obtain referrals to see a Specialist. You may also want to check whether a plan’s preferred pharmacies are near and accessible.

Medicare Supplement plans are accepted nation-wide since they piggyback on Medicare Part A and Part B. Referrals or prior authorizations are not needed to obtain services. However, your choices may be limited by which Plan Types are available in your service area.

In brief:

Medicare Advantage (Part C) Plans

Plans may have limited networks,
You may want to ensure your preferred providers are in-network,
Referrals or prior authorizations may be needed for some services.

Medicare Supplement Plans

Nation-wide acceptance of plans,
No referrals or prior authorizations needed,
Not all Plan Types may be available in your service area.

We hope this article has helped you in becoming more knowledgeable about how to compare between Medicare Advantage and Medicare Supplement Plans. This is an important decision so carefully consider all the factors before deciding on the right Plan for your needs.

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Click here to learn more about Medicare, its various Parts, different enrollment periods and your costs.

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Remember that you cannot choose just any combination of Parts and Plans. Let Lighted Road Insurance guide you step-by-step through the Medicare ecosystem and help you in selecting the right plan(s) for your needs.

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