Closing the (Medi)gap: understanding Medicare Advantage vs. Medicare Supplement

Learn more about the ABC’s and D’s of Medicare and how to make the best decision for your health and wellness needs.

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By Devoted Health Team
March 29, 2024

We’ve heard it before–Medicare terms can be so confusing! What’s the difference between Medicare, Medigap, “Med Supp”, Medicare Advantage, Medicaid? We’re here to help you understand these terms, and talk through the differences between Medicare Advantage and Medicare Supplement (Medigap).

Understanding the ABC's and D's of Medicare

Before we get into the nitty-gritty of Medicare Advantage and Medicare Supplement, let's quickly chat about the building blocks of Medicare:

Part A covers your hospital stays and even some home health services.
Part B takes care of doctor visits and many preventive screenings.
Part C is better known as Medicare Advantage (which we'll dive into deeper soon), which typically bundles together the other three parts.
Part D is your go-to for prescription drug coverage.

When we talk about Original Medicare, we are referring to Parts A and B. Most people who qualify for Medicare (upon turning 65, or having a qualifying disability and/or health condition) would be eligible to enroll in Original Medicare. Original Medicare covers most of your hospital and inpatient care, as well as 80% of doctor and outpatient services, but does not automatically include coverage for prescription drugs.

Making a coverage decision

When you enroll in Medicare Parts A and B, you will need to make a choice:

Enroll in a Medicare Advantage plan (Part C), which includes Part A, B, and usually Part D bundled together
Or, stick with your Original Medicare coverage, and consider optional add-ons like Medigap and Part D

Medicare Advantage: an all-in-one alternative

Medicare Advantage plans, also known as Part C, are like the Swiss Army knife of Medicare–they pack a whole lot into one neat package. These plans combine the benefits of Part A, Part B, and usually Part D, into a single plan. Perks tend to include additional coverage for dental, vision, and hearing, giving you a comprehensive healthcare solution. Plus, with Medicare Advantage, managing your healthcare is streamlined: you have one plan, one card, and one point of contact.

If you’re someone who wants dental coverage for your bi-annual cleanings, values additional wellness benefits like gym memberships and fitness rewards, and prefer a single plan to cover most healthcare services–Medicare Advantage may be right for you.

So, what's different about Medicare Supplement?

If you forgo joining a Medicare Advantage plan, you’ll stick with your Original Medicare coverage of Parts A and Parts B. At this point, you can decide if you want optional “add-ons,” such as a Part D plan to cover your medications or a Medicare Supplement plan.

Unlike Medicare Advantage, Medicare Supplement, or Medigap, isn't a standalone package. It’s designed to fill the "gaps" in Original Medicare (Part A and B), covering out-of-pocket costs like deductibles and coinsurance. A Medigap plan is like a puzzle piece that fits into the spaces where you'd have to pay out-of-pocket costs. They're useful for smoothing out those unexpected healthcare bumps.

While Medicare Advantage often brings more benefits beyond basic Medicare, Medigap focuses on minimizing what comes out of your pocket from those basics. These plans offer predictability with deductibles, co-insurance, and co-payments, as well as freedom to choose any doctor that accepts Medicare. However, these plans have a separate premium from Part B, and typically do not include prescription drug coverage (Part D). If you’re someone who values the ability to see specialists across the country without referrals, and the predictability of steady payments, you may be a fit for a Medigap plan.

Key differences at a glance: Medicare Advantage vs. Medicare Supplement

Medicare Coverage: Medicare Advantage plans cover Part A, Part B, and usually include Part D, and are a true alternative to Original Medicare (C), while Medigap supplements Original Medicare and doesn't cover D (you'll need a separate plan).
Prescription Drug Coverage: Typically bundled in Medicare Advantage, separate under Medigap.
Cost to you: Medicare Advantage plans often have lower or $0 premiums, set out-of-pocket costs, but may include copays, whereas Medigap has higher premiums but fewer out-of-pocket costs.
Doctors and Hospitals: Medicare Advantage may have network restrictions; Medigap offers more flexibility to see any provider that accepts Medicare.
Referrals: Referrals are typically necessary within Medicare Advantage HMO plans; usually not needed with Medigap.
Additional Coverage and Wellness Benefits: Medicare Advantage usually includes extra perks like dental and vision, rarely found in Medigap plans.

Take note of enrollment eligibility and enrollment timelines

Enrollment Times: Medicare Advantage plans have specific enrollment periods, whereas Medigap allows for a 6-month guaranteed enrollment period when you first become eligible.
Enrollment Eligibility: Both Medicare Advantage and Medicare Supplement require you to have Medicare Parts A and B. Medicare Advantage plans may have specific service area restrictions as well.

The bottom line

Choosing between Medicare Advantage and Medicare Supplement hinges on what you value most.

Consider Jessica, who prefers a simple, budget-friendly option where she can manage her Medicare under a single plan, and values the additional benefits of dental care, vision care, and wellness programs. Jessica chooses a Medicare Advantage plan like the ones offered by Devoted Health because she doesn’t mind staying within a network of providers (hers are mostly in-network) and she values the simplicity and extra benefits of Medicare Advantage.

John, on the other hand, spends his summers in the north and his winters down south. He chooses a Medigap plan because he values flexibility in choosing health care providers, and wants more predictable expenses (for out-of-pocket costs). A Medigap plan suits his travel lifestyle and preferences well, because it ensures he is covered in all seasons.

Consider whether you’re like Jessica or John, or somewhere in between, and you may find that a Medicare Advantage plan suits you, or that you’d rather stick with Original Medicare and purchase a Med Supp plan. Either way, don’t forget that you can always change your mind later, and switch during the Annual Enrollment Period or a qualifying Special Enrollment Period.

How Devoted can help

We have licensed representatives available to help you with your questions or answer more questions about Devoted Health Medicare Advantage plans. Call us at 1-800-483-8066 (TTY 711) for personalized assistance.

You can also learn more about your Medicare options in this free Medicare Comparison Guide.