There are a lot of perks that go along with senior citizenship: discounted meals, senior prices at the movies, and, of course, Medicare eligibility. In the United States, if you are over the age of 65 you are automatically eligible to receive Medicare Part A benefits without having to pay any premiums (according to the Social Security Administration). However, traditional Medicare doesn’t cover all healthcare expenses, so it’s wise to invest in either a Medicare Supplement or Medicare Advantage plan in order to avoid spending more out-of-pocket. The following will help to clarify some of the main differences between the two plans:
| Medicare Supplement (Medigap) | Medicare Advantage |
| Certain plans designed to minimize out of pocket expenses & deductibles | Designed to cost share out- pockets expenses, and deductibles |
| Used to supplement traditional Medicare Part A & B | Comprised of health plans such as HMO’s and PPO’s |
| Certain plans cover emergency hospital visits, skilled nurses, doctor fees, travel, etc. | Most plans include cost of prescription drugs |
| Certain plans fill in most gaps left by traditional Medicare | Large financial gaps if medical issues arise |
| 10 options of standardized Medigap plans | Plans are not standardized |
| In most cases patients are able to receive care anywhere, anytime without a referral. | In most cases plans will not provide comprehensive care when traveling out of network or out of state. |
http://www.ehealthmedicare.com/about-medicare/compare-medicare-advantage-and-supplement/
Typically, Medicare Supplement plans are more expensive than Medicare Advantage, but also offer significant additional coverage. The Medicare Supplement plan can potentially save you thousands if serious illness or injury occurs. As CBS News states, “You might be able to realize substantial savings in premiums with a Medicare Advantage plan, but you also need to be aware of the tradeoffs with such a plan.”
In a recent interview with Bankers Fidelity’s Medicare Strategy Specialist, Christian Novacek urged seniors to ask the following questions when comparing plans:
- If I get sick, which plans will provide me the best coverage with the least amount of deductibles?
- Can I afford a high deductible situation on my fixed income?
- Is it easier to set aside premium at an earlier age for a comprehensive plan today, or take my chances with out of pocket expenses?
Novacek goes on to state: “[With Medicare Advantage] you initially save on premiums, but the tradeoff is having a high deductible maximum of $3500- 6,700 annually per person depending on your provider.
If you would like to minimize your risk, and prefer to err on the side of caution when it comes to your health, finances and the longevity of your retirement plan, then a Medigap plan is the way to go. “
Undoubtedly, the choice between Medicare Supplement and Medicare Advantage will vary from person to person. Just keep in mind that you can’t purchase both; it has to be one or the other, as insurers are forbidden from selling Medigap to someone who has Medicare Advantage. Your insurance representative can help provide you with additional tips to make the best decision.
Not affiliated with or endorsed by the United States government or the Federal Medicare program. This is a solicitation of insurance and an independent agent/producer may contact you. Medicare Supplement policy form series B 21092 underwritten by Bankers Fidelity Life Insurance Company, Atlanta, GA; Medicare Supplement policy form series B 21492 underwritten by Bankers Fidelity Assurance Company, Atlanta, GA. Limitations and exclusions apply; actual policy provisions control. Rates subject to change on a class basis. Individually underwritten; application to determine eligibility required. Products not sold in AK, CA, CT, FL, MA, ME, MN, NH, NJ, NY, OR, RI, VT, WA or WI. Plan availability varies by state.
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