Medigap or Medicare Supplement plans versus Medicare Advantage Plans

The Original Medicare (Part A and Part B), Medigap, and Medicare Supplement plans are used exclusively for Original Medicare and cannot be used with Medicare Advantage plans. Medicare Advantage Plans (Medicare Part C) combine Medicare Parts A and B and, in most cases, include prescription drug coverage in Medicare Part D.

Medicare Supplement Insurance can only allowed to be purchased if you have Original Medicare.

Medicare Advantage Part C are offered by several different Medicare (CMS)-approved third-party private health insurance carriers. When Medicare beneficiaries choose these qualified plans, these plans satisfy the Medicare requirements to avoid the Medicare non-participating penalties imposed on Medicare-eligible beneficiaries.

1. Medigap or Supplements offer standardized benefits: There are 10 standardized Medigap / Supplement plans available in most states (Plan A" through Plan N) that offer specific benefits to help pay for out-of-pocket costs not covered by Original Medicare such as copayments, coinsurance, and deductibles. Only eight plans are available to new enrollees.

2. These Medigap / Supplement plans will cost an additional premium fee and add to your Medicare Part B premium cost. However, you are allowed more coverage for that additional out-of-pocket expense.

3. Medigap Supplement Insurance may or may not include some prescription drug coverage. Original Medicare beneficiaries who want coverage for prescription drugs must enroll in a separate Medicare Part D prescription drug plan. Not properly enrolling on a timely basis in Medicare Part D prescription drug benefits would cause Medicare requirement penalties for your Medicare account.

4. Original Medicare allows freedom of choice to visit any certified CMS health provider: Beneficiaries can visit any healthcare provider that accepts Medicare without being limited to a network of providers.

5. Original Medicare Parts A and B plus Medigap/Supplement plans will have a combined higher monthly total premium cost because of the added benefit of the Medigap Supplemental policy and the cost of the Medicare Part D prescription drug provision for Part D prescription coverage, as well as any Medigap/Supplement plan.

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6. Using Original Medicare, when you enroll in Medicare Part D prescription drug coverage, the beneficiary will pay a separate premium for the Part D plan.

Medicare Advantage Plans:

1. Medicare Advantage plans are offered by private insurance companies and offer a wide variety of ancillary benefits.

2. Medicare Advantage Plan benefits may provide such ancillary benefits as wellness, dental, vision, and hearing care, transportation, and possibly tier 1, 2, 3, and tier 4 prescription drug coverage. Advantage plans have slightly different benefit packages, so it's best to speak with a licensed health insurance agent.

3. As with Original Medicare, Medicare Advantage PPO plans give the Medicare beneficiary the freedom to see a physician specialist without a referral from a Primary Care physician.

4. If the Medicare beneficiary elects to enroll in a Medicare Advantage HMO (Health Maintenance Organizations) plan (different from a PPO plan), the Medicare beneficiary must obtain a referral from their Primary Care Physician (PCP), to see a specialist physician before they can be seen by the specialist.

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5. The Medicare Advantage HMO plans typically have to provide you with a referral from your Primary Care Physician (PCP) to see a physician specialist, in or out of the HMO network. (The standard Medicare Advantage PPO plan does not have that referral requirement to see specialists; only some HMO plans have that requirement.)

6. Medicare Advantage PPO and HMO plans have different networks of providers: The network of physicians in both PPO and HMO cases is based on geographic location.

7. Medicare Advantage HMO plans generally restrict you to a defined network of providers, with one insurance carrier as an exception, except in cases of emergency care, in which all HMO's allow for outside-of-network emergency care.

• Medigap or Supplemental policies do not work in conjunction with Medicare Advantage plans. If you have a Medigap policy and join a Medicare Advantage Plan (Part C), you must disenroll from your Medigap or Supplemental policy immediately after you enroll in a Medicare Advantage plan.
• If you have a Medicare Advantage Plan, it's illegal for anyone to sell you a Medigap policy unless you're switching back to Original Medicare Parts A & B. Contact your state insurance department if this happens.
• If you want to cancel your Medigap policy, you should contact your current insurance carrier and let them know.
• If you join a Medicare Advantage Plan for the first time and you aren't happy with the plan, you have a "trial right" under federal law to buy a Medigap policy and a separate Medicare drug plan if you return to Original Medicare within 12 months after joining the Medicare Advantage Plan.

Please go to our page describing "Trial Right" for detailed explanations of what Trial Right means. If you drop the Medigap policy, you might not be able to get the same, or in some cases, any Medigap policy, back.

It's important for beneficiaries to compare the costs, benefits, and limitations of both Original Medicare and Medigap/Medicare Supplement plans versus Medicare Advantage plans to determine which option best fits their healthcare needs and budget. Everybody is different!