Medicare

Medicare health plans are an important component in retirement planning. The following information provides a starting point for understanding available options.

Medicare Advantage plans are comprehensive policies run by private companies that offer Part A, Part B, and often Part D (drugs) coverage, dental, vision, and other benefits, but restrict you to an in-network provider network.

Medicare Supplement (Medigap) plans are sold by private companies to fill the gaps in Original Medicare (Part A and B) but do not include drug or other benefits, work with any Medicare-accepting medical provider, and require a separate Part D plan for drug coverage. You must choose between having either a Medicare Advantage plan or a Medigap plan, as you cannot have both.

Medicare Advantage Plans 

Combines Coverage:  Bundles Part A and B services into one plan, and often adds Part D prescription drug coverage, dental, vision, and hearing benefits.  

Provider Networks:  You must generally use providers and facilities within the plan's network.

Costs:  May have lower monthly premiums, sometimes even zero, but you will pay co-payments and co-insurance for services.

Limitations:  Provider networks can change, and you may not be able to see your preferred doctors.

Medicare Supplement (Medigap) Plans 

Fills Gaps in Original Medicare:  Helps pay for out-of-pocket costs not covered by Original Medicare, such as deductibles, co-payments, and co-insurance.

No Network Restrictions:  You can see any doctor or hospital that accepts Original Medicare, anywhere in the country.

Separate Drug Coverage:  Does not include prescription drug coverage; you must also purchase a separate Part D plan.

Costs:  Usually have higher monthly premiums but can offer lower out-of-pocket costs when you need care.

Key Differences to Consider 

Choice of Doctors:  Medigap plans offer more freedom to choose medical care providers than Medicare Advantage plans.

Included Benefits:  Medicare Advantage plans often include extra benefits like dental and vision, which are not included with Medigap.

Complexity:  Medicare Advantage plans are one-stop shops for benefits, while Medigap requires Original Medicare and separate Part D coverage.

Trial Periods:  You have a limited trial period to switch from a Medigap to a Medicare Advantage plan.

Which Should You Choose?  

Choose Medicare Advantage if:  You want lower monthly premiums, additional benefits like dental and vision, and don't mind using specific network providers.

Choose Medigap if:  You want the freedom to see any doctor that accepts Medicare and want predictability in your costs for healthcare services.