Medigap vs. Medicare Advantage: What’s the Difference?

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There are few things in the world as confusing as Medicare. Medigap, Medicare, Medicare Advantage, Plans A, B, C… to say it’s overwhelming is an understatement.

If you’re trying to understand the difference between Medigap and Medicare Advantage, you’re not alone. Medicare benefits aren’t the easiest to understand, but you don’t have to be swimming in a sea of technical terms, either.

Here are the quick facts on the differences, the details, and what it all means to you.

The Four Medicare ‘Parts’

Medicare can be broken down into four distinct parts – A, B, C, and D.

Medicare Part A covers hospital care; Medicare Part B covers doctors, equipment needed, and major medical procedures; and Medicare Part D covers prescription drugs, a must for so many Americans.

You’ll note two things – we did not talk about Medicare Part C, and nothing here helps cover major out-of-pocket situations like deductibles, co-pays, and other costs that could wipe a savings account completely out if you’re ill.

These two are tied together and lead into our next subject: Medicare Advantage.

What Is Medicare Advantage?

Medicare Advantage, also known as Part C, is one of the ways that Medicare benefits can help protect you from major expenses that could seriously decimate your savings, especially if you’re on a fixed budget or out of work due to illness.

It helps protect against bills that Medicare won’t cover, and the patient is enrolled in private insurance to cover A, B, and D. Usually, the beneficiary pays the Medicare Advantage premium along with the Part B premium.

A Medicare Advantage plan is very similar to a private health insurance plan, and most “small” things are covered, like doctor’s visits, blood work, and more. A small co-pay is usually all that is paid.

What Is Medigap, Then?

Confused at what Medigap is? Well, it’s very similar to Medicare Advantage, so if you’re a little lost, it’s okay!

Medigap, or Medicare Supplement Insurance, is basically additional protection against extra expenses – just like Medicare Advantage.

Medigap, however, charges a premium in addition to what someone already pays for Part A. If you’re getting Part A for free, you could also receive Medigap for free or for a small additional cost.

What’s The Difference Between Medigap and Medicare Advantage, Then?

Sound like they’re both the same? It’s confusing, yes. But there are some key differences to keep in mind when choosing the best plan and coverage for you.

Medigap generally has a higher monthly premium for members but often results in lower out-of-pocket expenses when something does happen. Medicare Advantage, on the other hand, often has a lower monthly premium but the out-of-pocket costs are higher.

Be aware that if you’re a snowbird or you travel a lot, Medicare Advantage often only covers certain areas. If you travel internationally, Medicare Advantage will almost certainly not cover you. Medigap, however, has a better “chance” of covering out in numerous states or even out of the country.

If you like to go to an out-of-network doctor, Medigap might also be better for you. Medicare Advantage generally limits who you can see, which can put major restrictions on your care choices. If you’re already working with specialists or have a health care team you like, make sure they’re covered before you sign up with either choice!

You Don’t Have to Do It Alone

Signing up for Medicare, figuring out Medicare benefits, and choosing the right plan for you can feel like you’re all alone in a sea of technical terms and plan letters. But it doesn’t have to be like that!

Once you have a good grasp on the difference between Medigap and Medicare Advantage, you should take some time to go through the official government website (Medicare.gov) and use their tools to determine the price and coverage that fits into your budget and lifestyle.

Each plan has positives and negatives, and there is no universal “right” or “wrong” answer here. It’s all about what fits your lifestyle and your budget, so choose based on what is right for you, not for anyone else.