With more 44 million Americans taking part in Medicare, it’s important to know the best way to make the most of your Medicare. It’s not an easy task, and understanding the entire Medicare system can seem intimidating.

What’s Medicare?

Medicare is the name for the federal health insurance program. If you’re 65 or older, under 65 but with a qualified disability, or have End-Stage Renal Disease, you’re eligible for Medicare.

Okay, I’m Eligible. What Now?

Medicare is divided into four parts. Parts A and B (called Original or Traditional Medicare) cover things like hospital stays, hospice services, clinical and lab services, physical therapy, and so on. Technically, Part A is hospital coverage and Part B is medical insurance.

Part C is simply an alternative method of obtaining the coverage listed in Parts A and B. Part C is also known as “Medicare Advantage”.

Part D is coverage for prescription drugs. Known as the “Part D Prescription Drug Plan”, Part D is stand-alone. You can combine your Part C and Part D into a single plan.

What’s This “Gap”?

If Original Medicare (Parts A and B) is your umbrella, you’re still probably going to get a little wet. Medigap insurance helps cover those out-of-pocket expenses that Original Medicare doesn’t. Medigap insurance is like a pair of good rain boots—it just helps your Original Medicare keep you covered.

Can’t I Have It All?

Parts A and B (Original Medicare) are your umbrella. They have the coverage that you need. But if you want a different umbrella (a cheaper or more flexible one, perhaps), you can go with Medicare Advantage (Part C). You’ll get broadly similar coverage, but there are some differences in logistics that may make it a better fit.

Medicare Advantage Plans

Medicare Advantage Plans, also known as “Part C” or “MA Plans”, exist as an alternative to Original Medicare. Medicare Advantage is a type of health insurance that covers all the same services as Original Medicare and is usually offered at a lower cost from a private insurer.

Intended to act as a lower-cost option for people who can’t afford Original Medicare, Medicare Advantage plans use managed care plans to keep access to services within a certain network. While it may seem confusing, it’s not so bad: you just need to use a doctor, hospital, or service provider that is part of your HMO (health maintenance organization) or PPO (preferred provider organization).

Premiums

While Original Medicare usually requires you to pay several monthly premiums, Medicare Advantage Plans have a lot more flexibility in what and how you pay. Since they are serviced by third-party private insurance companies, you can receive full coverage based on your actual needs.

Medicare Supplement Plans

Medicare Supplement Insurance, also known as “Medigap”, acts as an addition to your existing Original Medicare coverage. A Medigap policy helps to cover some of those pesky additional costs that creep up in Original Medicare such as:

  • Copays
  • Deductibles
  • Coinsurance

Think of Medigap as a supplement to your existing Original Medicare benefits. It helps to imagine Original Medicare as your healthcare umbrella—it’ll keep you mostly dry, but you’re likely to get wet and muddy here and there. Medigap is that additional layer that keeps you extra comfortable.

In return for a monthly premium, Medigap insurance acts to protect you against the holes, or gaps, present in Original Medicare.

Do I Need to Choose?

You can’t have both Medicare Advantage and Medigap insurance. You’ll need to choose, and that choice ultimately comes down to your specific needs.

Medicare Advantage plans typically cost less and cover a wider range of services. That’s a big selling point for a lot of people—MA plans are very flexible and versatile instruments. On the other hand, Medigap insurance usually ensures lower out-of-pocket payments at the cost of a higher monthly premium. When it comes to cost, only you can really make that choice.

A principal way that MA plans keep costs down is by limiting access to only doctors, hospitals, and clinics within a network. These HMO/PPO plans do not cover you if you go to a doctor or hospital outside the network. If you go with the MA plan, you’ll be limited to only in-network service providers. For many people, this isn’t a big deal, but if you require a certain specialist or specific hospital, a MA plan may not be the best choice.

On the other hand, Medigap insurance and Original Medicare are accepted at any location that accepts Medicare (no networks to worry about). MA plans are usually limited to specific physical areas and don’t cover international travel. Original Medicare and Medigap coverage may be a better option if you’re an avid traveler.

Let the Professionals Help

Your health should be about you, not your money. With most Americans overpaying for their Medicare coverage, it’s vital to take a moment and shop around for the best available rate. Our talented staff is standing by to help you find the coverage that you need at the cost you want. No more overpaying for unnecessary coverage!

We deal with pesky health care professionals and unscrupulous health insurance agents so you don’t have to—you end saving money (usually 45% or more!). Take a few minutes and take control away from insurance companies: let them come to you. If you have any questions or comments, contact us today!