Medigap and Medicare Advantage

Category: Medicare Originally Posted: February 22, 2016 by Quinn Korzeniecki Last modified: February 22, 2016

As a Medicare beneficiary, you have many different options for plans in which you can enroll. Depending on your needs, Original Medicare might provide enough coverage. However, Original Medicare does not cover all the costs associated with your hospital, prescription drugs or other expenses, so it might be worth your while to look into other options. Private insurance companies offer both Medigap and Medicare Advantage plans. These two plans differ in both what they cost and what they cover.

What are Medigap plans?

Medigap plans, also known as Medicare Supplement plans, were introduced to help fill in the gaps in coverage that Original Medicare leaves behind. These coverage gaps can get expensive, so Medigap plans help cover some of the health care costs that Original Medicare does not cover, such as coinsurance, copayments and plan deductibles.

There are ten standardized Medigap plans available (with different standard plans available in Massachusetts, Minnesota and Wisconsin), each denoted by a letter. Every plan of the same letter must offer the same standardized benefits. For example, Medigap Plan F in New York must provide the same coverage as Medigap Plan F in California. The only difference between these plans lies in the cost of the plan premium, which is set by the private insurance company offering it. You can enroll in a Medigap plan during your Medigap Open Enrollment Period.

If you choose that keeping Original Medicare and enrolling in a Medigap plan to offer additional coverage is right for you, we recommend finding the lettered plan that is right for you, then shopping around for these available plans in your area to find the most cost effective option.

What are Medicare Advantage plans?

Unlike Medigap plans, Medicare Advantage plans do not cover Original Medicare costs. Medicare Advantage plans are offered through private insurance companies and take the place of
Original Medicare, providing at least the same coverage and sometimes offering additional benefits such as vision and hearing benefits.

There are different types of Medicare Advantage plans available, including Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), Private Fee-for-Service Plans (PFFS), Special Needs Plans (SNPs), and Medicare Medical Savings Account (MSA) Plans. Most Medicare Advantage plans provide prescription drug coverage. You can enroll in a Medicare Advantage plan during your Initial Enrollment Period (when you first become eligible for Medicare due to age or disability) or during the Annual Enrollment Period (an open enrollment period running from October 15 to December 7 of each year).

Can Medigap and Medicare Advantage plans work together?

Medigap and Medicare Advantage plans cannot work together. You must choose which benefits would better suit your needs and choose to enroll in one or the other. If you have a Medigap plan and enroll in a Medicare Advantage plan, you may want to drop your Medigap policy since it does not fill in the gaps in your Medicare Advantage plan coverage, so you would be paying more for no additional benefit.

On the flip side, if you are enrolled in a Medicare Advantage plan, it is illegal for a private insurance company to sell you a Medigap plan. If you feel that Original Medicare with a Medigap plan is the right combination of coverage for you, then you will have to contact your Medicare Advantage plan to disenroll and enroll in Original Medicare. If you are outside of your Medigap Open Enrollment Period (beginning on the first day of the month that you are both over age 65 and enrolled in Medicare Part B, and lasting for six months), then companies selling Medigap plans could charge you a higher premium based on pre-existing conditions you may have.