Medicare Advantage and Medicare Supplements – What’s the Difference?

June 28, 2021

Understanding Medicare: Part 2 of 6

Original Medicare provides millions of Americans with health care coverage. And while it’s a great start, there are two ways to improve on it. 

One is to purchase Medicare Supplement insurance as a companion to Original Medicare. The second is to choose a Medicare Advantage plan to provide your Medicare benefits. Today, we’ll take a close look at both options.


Medicare Supplements: An optional add-on

You might hear Medicare Supplement insurance referred to as MediGap. That’s because it’s intended to fill some of the financial gaps in coverage left when you opt for Original Medicare. Depending on which type of supplemental policy you choose, some or most of the patient costs—like deductibles and coinsurance— may be covered. For this coverage, you’ll pay a relatively high, fixed monthly premium, whether or not medical services were used.

You can only purchase a Medicare Supplement policy if you are enrolled in Original Medicare (both Part A and Part B). These policies can help lower what you pay for approved  hospital services under Part A and medical services under Part B of Original Medicare. They don’t include drug coverage. For that, you have to purchase a separate, stand-alone Part D Prescription Drug plan.


Medicare Advantage: An alternative to Original Medicare that comes with more

Medicare Advantage plans provide all-in-one-plan coverage that takes the place of Original Medicare. They cover everything that Original Medicare covers and—here’s the key— much more.

With generally much lower or $0 monthly premiums than what you would pay for a Supplement plan, these plans take a “pay as you go” approach. You might pay a copay or coinsurance for certain services when needed, and there’s an annual maximum out-of-pocket limit that protects you from extreme expenses.

Important points to consider

Beyond medical and hospital coverage

Medicare Supplement: No additional services or benefits beyond Original Medicare Parts A and B.

Medicare Advantage:
Might include prescription drug coverage, as well as coverage for dental, vision, hearing, over-the-counter purchases, fitness, wellness, and more.

This is one of the most important differences between Medicare Supplement policies and Medicare Advantage plans—Medicare Advantage plans provide great value to members by including “extras” that are all important parts of your overall health and wellness.

 

Premiums, copays, and maximum annual costs

Medicare Supplement: High monthly plan premium. Reduced or no cost for care or services.

Medicare Advantage: Lower or no monthly plan premium. Copays or coinsurance for some care and services, though preventive services are typically covered 100%.

Some people like the Medicare Supplement concept of paying a steeper premium once a month and then never having to think about copays or coinsurance when they see a doctor or other health care provider. Others prefer to only pay for services they receive, and dislike paying a high premium during months in which they receive no medical care or services.

Medicare Advantage plans also include a safety net, just in case you have a catastrophic medical event that’s extremely expensive. These plans set a maximum amount that members pay out-of-pocket per calendar year. If you reach this limit, your Medicare Advantage plan pays 100% of all covered medical expenses.

See the chart Comparing costs for a typical year: Medicare Advantage vs. Medicare Supplement below to see how your costs might stack up.                     


Plan Choice

Medicare Supplement: There are 10 standardized plans but every plan is not available in every state, and some states offer different standardized plans. Plans are designated by letter, such as Supplement Plan A, Supplement Plan B,etc.— not to be confused with Medicare parts A, B, C, and D. Each plan covers a different amount of the Medicare deductible and Part B coinsurance.

Medicare Advantage: With hundreds of plans to choose from, it’s easier to suit your situation both in terms of budget and your health care needs. You can only select plans that are offered in the county or state where you live.

Look for more information on the various type of Medicare Advantage plans— HMO, HMO-POS, and PPO—later in our series.


Provider choice

Medicare Supplement: Allows you to see any doctor or health care center in the US that accepts Medicare.

Medicare Advantage:
Depending on the type of plan you choose, your choice of provider/facility may or may not be limited to those that are in the plan’s network (on their approved list).

There’s no denying that people like choice. Many Medicare Advantage plans, including Martin’s Point Generations Advantage, provide options by creating large networks, so there are many doctors and health care centers to choose from. In addition, by offering a variety of types of plans, Medicare Advantage plans create options that give members more flexibility in who they see. Just keep in mind that out-of-network services might cost more.

Ease of use

Medicare Supplement: You could end up dealing with up to three insurance entities (and three ID cards): Original Medicare, a Medicare Supplement plan, and a Part D Prescription Drug plan.   

Medicare Advantage:
All-in one Medicare Advantage plans include all your Part A, Part B, and Part D Prescription Drug coverage (optional) in one plan with one ID card. All your care is managed by one organization, so no matter what questions may arise about any aspect of your coverage, you have one place to call for help.

 

Compare Medicare Advantage and Medicare Supplement benefits and costs side by side:

   Medicare Advantage  Medicare Supplement

When can you sign up or leave?

Upon eligibility, plus every year during annual enrollment, and according to special circumstances.

When you’re first eligible, you can lock in a guaranteed premium. Miss this window and the premium depends on your health status.

Monthly plan premium

Low or $0

Relatively high

Part B deductible

In some cases (Generations Advantage plans have no Part B deductibles)

Yes, unless you enrolled in Plan C or F before January 1, 2020

Part B Medicare premium

Yes

Yes

Part D Prescription drugs

Yes, in most cases

No

Requires members to see providers in their network

In some cases

No

Copayments and coinsurance

Yes, in most cases

Yes, in most cases

Value-added benefits that boost health, like fitness/wellness reimbursements

Yes

No

Routine dental, routine hearing, routine vision

Often covered or offered as an add-on

No

Learn more at your leisure

To learn more about Generations Advantage Medicare Advantage plans from Martin’s Point, download our Medicare Made Simple Guide, visit our shop medicare plans page, or call 1-877-547-7072 (TTY: 711). Our friendly advisors are always happy to answer questions with no pressure for you to act or enroll.

And keep an eye out for Part 3 in our Medicare series. Next, we’ll explore key elements to look for when you compare Medicare Advantage plans. See you soon! 

Comparing costs for a typical year: Medicare Advantage vs. Medicare Supplement

A Medicare Advantage plan can save you a lot of money over one year, even if you see a doctor or specialist regularly and have an unexpected medical event pop up. The example below shows what a fictional person might pay for the same services under both types of plans—saving more than $2,400 with a Medicare Advantage plan.

 

Costs for Jane’s health care services for one calendar year:*

Jane’s costs with 
Medicare Advantage

Jane’s costs with
Medicare Supplement

Part B premium

$1,735

$1,735

Plan premium

$0

$2,400

Part D premium

$0

$400

Annual routine physical exam

$0

$200

Routine vision exam

$0

$200

Annual mammogram

$0

$0

Maintenance lab testing

$0

$0

Outpatient cataract surgery at an in-network surgical center

$175

$0

Annual total

$1,910

$4,935
























*Costs are for illustrative purposes and exact amounts may vary. Martin’s Point Generation Advantage plan premiums range from $0 to $99/month