When approaching Medicare eligibility, one of the first things to research and understand is the differences between Medicare Advantage vs Medicare Supplement. Sometimes people make a decision to purchase insurance to go with Medicare before they are given the whole picture. Since it can be like comparing apples to oranges, I’ve written this article to help you understand the important differences.
Facts regarding Medicare Advantage plans are listed in bold.
1. Replaces Original Medicare. Medicare contracts with an insurance company to repackage the benefits of Medicare. You are no longer covered by Part A or Part B. However, you still pay the Part B premium to social security. With a Medicare Supplement, you keep Original Medicare and the supplement fills in the gaps.
2. The company may cancel your plan or change your benefits each calendar year. Out of pocket costs could reach $6,700/year for in-network services. Your benefits with a Medicare Supplement are guaranteed renewable for life. The company cannot cancel your plan or change your coverage if you continue to pay the premiums. Benefits are coordinated with changes in Medicare.
Sometimes come with lower premiums. Everyone pays the same rate. Lower premium, cost-sharing plans are available. Attained Age policies have age-related increases. Issue Age policies do not.
Some Advantage plans include drug coverage and/or optional basic dental and vision riders. Part D drug plans and dental plans are always separate policies. Vision riders can be added to some dental plans.
3. Normally come with network restrictions. The plan can change the network of doctors each new calendar year and a doctor could choose to leave the network. With a Medicare Supplement, you can go to any doctor, hospital or clinic that takes Medicare patients, anywhere in the U.S.
4. Between April 1st and December 31st of each year, you cannot change to another plan or go back to Original Medicare, except for special circumstances. With a Medicare Supplement, you can leave the plan anytime and keep Original Medicare.
5. Medicare Advantage plans are not required to include State-mandated benefits. In Wisconsin, Medicare Supplements include state-mandated benefits as required by the Wisconsin Commissioner of Insurance. These benefits are written into your policy and can be taken with you, even if you move out of state.
6. If you do not follow the Medicare Advantage plan rules, you could be responsible for paying the bill. If Medicare covers the medical service, your Medicare Supplement will also cover the service.
7. Medicare Advantage plans often have limited service areas. With a Medicare Supplement, you are covered anywhere you travel throughout the United States.
8. Some Advantage plans require a referral to see a specialist. No referrals of any kind are required to see a specialist, with a Medicare Supplement.
9. Though these plans must provide benefits equivalent to Medicare by itself, they are not required to provide supplemental benefits. A Medicare Supplement provides supplemental coverage, in addition to Medicare.
If you move out of state, you may have to enroll in a new plan. With a Medicare Supplement, you can take the plan with you and have the same coverage you have always had.
We hear real-life stories from our clients that confirm these differences:
We recently helped a retired surgeon and his wife disenroll from an Advantage plan because they said, “the network is not what it used to be.”
My mother was able to get a second opinion that may have saved her life. Her Medicare Supplement allowed her to do that because there are no network restrictions. See my blog post to read her story.
Several attendees at our Medicare seminars have told us about friends or relatives who had skilled nursing claims denied by Medicare because they did not satisfy the 3-day hospital requirement. The hospital had their status listed as “under observation” vs. admitted. Fortunately, the Medicare Supplement paid the entire skilled nursing stay, under the Wisconsin State Mandated Benefits.
Retired skilled nurses and physical therapist clients of ours have told us that Medicare Advantage plans seem to treat claims differently than Original Medicare and Medicare Supplements. They said they have seen patients with Advantage plans sent home before they thought they were ready.
If you or someone you know is currently enrolled in a Medicare Advantage plan and considering returning to Original Medicare, you may be interested to hear about the new open enrollment period:
v Effective for 2019, the existing MA dis-enrollment period that currently takes place from January 1st through February 14th of every year, will be replaced by a new open enrollment period (OEP) that will take place from January 1st through March 31st annually.
You can return to Original Medicare without answering health questions. However, Medicare Supplement applications may be subject to underwriting approval.
When you’re new to Medicare Part B, you have an open enrollment that gives you a guaranteed right to purchase a Medicare Supplement, without having to answer any health questions. In Wisconsin, this open enrollment lasts 6 months from your Medicare Part B start date.
If you are currently enrolled in a Medicare Advantage plan and would like to switch to Original Medicare and a Medicare Supplement, don’t be discouraged if you are no longer new to Medicare! You can always apply for a Medicare Supplement and wait for approval before canceling your Medicare Advantage plan.
When applying between January 1st and March 31st, we recommend applying no later than mid-March, for an April 1st effective date. When applying between October 15th and December 7th, we recommend applying by mid-November for a January 1st effective date.