Insurance is crucial to protect against the “what ifs” of life: fender benders, wet basements, and even changes to travel plans. Especially when one’s health and life are involved, picking the right health insurance is vitally important. For folks over 65, this entails navigating through Medicare plans to select the best coverage. Individuals should start by understanding the basics and letting the experts guide them through the particulars.

Medicare Advantage (Medicare Part C) and Medicare Supplement Plans (Medigap) are options for individuals who are eligible for Medicare, but they serve different purposes and have distinct characteristics. Here are the key differences between Medicare Advantage and Medicare Supplement Plans.

Type of coverage Medicare Advantage plans are private health insurance plans offered by Medicare-approved private insurance companies. They are an alternative to Original Medicare (Medicare Part A and Part B) and provide all the benefits of Part A and Part B.

Additional benefits Many Medicare Advantage plans offer additional benefits not covered by Original Medicare, such as prescription drug coverage (Part D), vision, dental, hearing, and wellness programs. Some plans may include fitness club memberships and other perks.

Network restrictions Medicare Advantage plans often have provider networks, including Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), and others. You may need to use doctors and hospitals within the plan's network to receive full coverage. Going out of network may result in higher costs.

Cost structure Medicare Advantage plans typically have very little to no additional premiums in addition to the Medicare Part B premium. Costs like copayments, coinsurance, and deductibles vary by plan and may be different from Original Medicare. Out-of-pocket maximums provide some financial protection by capping your annual costs.

Prescription drug coverage Many Medicare Advantage plans include prescription drug coverage (Part D) as part of the plan. This can be convenient for those who want an all-in-one solution for their healthcare needs.

Type of coverage Medigap plans are also private insurance policies, but they are designed to work alongside Original Medicare. They are intended to fill the "gaps" in coverage left by Medicare Part A and Part B; hence the name "Medigap."

Benefits Medigap plans help pay for Medicare deductibles, copayments, and coinsurance that you would otherwise have to pay out of pocket with Original Medicare. They do not typically include additional benefits like prescription drug coverage, vision, dental, or wellness programs.

No network restrictions Medigap plans do not have provider networks. You can see any healthcare provider that accepts Medicare patients without referrals.

Cost structure Medigap plans have monthly premiums in addition to the Medicare Part B premium. They may have higher monthly premiums compared to some Medicare Advantage plans but offer more predictable out-of-pocket costs.

Prescription drug coverage Medigap plans do not include prescription drug coverage (Part D). If you want prescription drug coverage, you would need to purchase a separate Part D plan.

In summary, the main difference between Medicare Advantage and Medicare Supplement Plans is that Medicare Advantage plans replace Original Medicare and often include additional benefits, while Medigap plans work alongside Original Medicare to cover out-of-pocket costs. The choice between the two depends on individual healthcare needs, budget, and preferences for provider flexibility and additional benefits. It's essential to carefully compare plan options and consider your specific circumstances before making a decision.

The best advice is to speak face-to-face with an experienced professional to discuss your personal situation—an individual approach to evaluating your needs to identify the best plan for your particular circumstances. What is best for your neighbor or friend may not be best for you.

At Chester Perfetto Agency, we help people with the Medicare process from start to finish. We also offer a complimentary review of your current Medicare Advantage, Medicare Supplement, and Prescription Drug plan, and make recommendations based on your changing needs. Schedule your appointment at 610-743-7823 or perfettoinsurance.com. We have expanded to the Lehigh Valley and are located at 6081 Hamilton Boulevard, Suite 600, Allentown, PA 18106.