FAQ Friday: What is a Medicare Advantage Plan?

A Medicare Advantage Plan is not a Supplement Plan, it is a private alternative to Medicare. A Medicare Advantage Plan will not pay the bills that Medicare would normally pay. Instead, a Medicare Advantage Plan will charge you a different deductible, different copays, and different co-insurance compared to Medicare.

Medicare Advantage Plan

  • Low monthly premium. (Sometimes advertised as $0.00 per month)
  • You will usually have to pay a fee every time you use the plan. ($15.00 copay for PCP visit, $300.00 per day each day you are in the hospital, etc.)
  • You may have to go to certain Doctors, Hospitals, and Providers. (HMO versus PPO Network)
  • You may have to get prior authorizations for some procedures.
  • You may have to get referrals to go see a specialist.

A Medigap plan fills in the gaps that Medicare and Advantage plans don’t pay. For example, as a hospital inpatient, your Medicare Supplement Plan will pay your Part A deductible of $1484 in 2021. Furthermore, most Medigap plans cover your 20% coinsurance for medical services, such as lab work and doctor visits.

With a Medicare Supplement Plan, you often pay more per month. However, the benefits you pay for include:

  • Flexibility – You can go to any doctor that accepts Medicare without prior authorizations (referrals).
  • Predictability – You know that as long as you pay your monthly Medigap premium, you will rarely have a bill that you have to pay. (My favorite Medicare Supplement Plan is G. With Plan G, all you pay is the Part B Deductible of $203 in 2021.)

Which Medicare coverage is best for you? 

You may choose a Medicare Supplement Plan, and pay $145 per month, and have a good year with your health. For example, you don’t really use the Supplement Plan that much. Would you consider $145 per month a waste of money?

Most Medicare beneficiaries are age 65 or older. Since you are more likely to use health insurance in the next 5 years compared to the previous 5 years.  Isn’t the $145 per month is a cost of living (and not a waste of money)?

Last Updated on July 8, 2021 by Brian Kondas