Before choosing a plan, we want to be sure you know the difference between your many options; In particular, how Medicare Supplements and Medicare Advantage Plans differ. Many people sign up for Advantage Plans thinking they are Supplements - they are not. A Medicare Supplement is used in conjunction with Original Medicare. Any provider that accepts Medicare will take a Supplement because they only need to bill Medicare. Medicare pays their part (generally 80% of Medicare covered benefits) and then sends the remainder of the bill to the Supplement, which pays their part, (generally 20%). It is important to note that Supplements do NOT include Prescription Drug Coverage, (Part D, or PDP), and for those that do not get a PDP when first eligible, there will be a penalty when they do get one, (although there are exceptions to this). A Medicare Supplement does not change from year to year, as they are standardized, although the premiums do generally go up annually.
A Medicare Advantage plan works differently than a Medicare Supplement. With a Medicare Advantage Plan a private insurance carrier takes over for Medicare, (you continue to pay your premium(s) for Original Medicare, (Part A & B). These plans follow the same type of module as many group plans, such as HMOs or PPOs. With this type of plan, it is important to remember several things: First, most Advantage Plans have Networks to adhere to, so you want to make sure your Doctor, Hospital, and auxiliary care are contracted within the network. Otherwise you will be paying higher costs, and in some cases are responsible for 100% of care outside the network). Second, Advantage Plans have co-pays associated with them. It is important to be aware of these because they can add up to be quite a bit of money, annually. Third, most Advantage Plans have the Part D (Rx) “built in”, which is a nice bonus, but you must be aware that when switching to a Supplement from an Advantage Plan you will also need to add stand-alone Part D coverage. (There are several types of Advantage Plans that do NOT have Part D built in, so this is something to keep in mind when choosing any plan.) Lastly, Advantage Plans typically have value added benefits. These benefits vary between plans, but typical benefits include Health Club membership, limited dental, eye and/or vision coverage – sometimes at an additional premium.
Also, not all Part D Rx plans are the same. Although they are required to be at least as good as the Medicare model, they can vary greatly in costs, co-pays and specific drugs that are covered in their formulary. It is important to check which one suits you and continue to check each year because, (like Advantage Plans), they do change every year.
Because these plans vary even from county to county, we strongly recommend that you talk to an independent insurance agent to help you choose the one that best suits your needs.