Compare Advantage Vs. Medicare Supplement
In the Medicare 2020 chart below, the red letters are disadvantages and green letters are advantages. The chart gives you a side by side comparison of Medicare Advantage verses Medicre Supplement.
2020 Medicare Advantage vs Medicare Supplement
Medicare Advantage has a smaller, local network of providers. While Medicare Supplement network has over 800,000 providers nationwide. You must have Medicare Part B and pay $198 deductible for a Medicare Advantage plan. However, a Medicare Supplement plan pays the 20% co-insurance expense of Medicare Part B and the deductible of Part A ($1408 in 2020). Medicare Advantage has set co-payments. While Medicare Supplement covers your co-pays for hospital stays, skilled nursing facility care, hospice and home health care. Essentially, Medicare Supplement fills the holes in Medicare so you don’t have any surprise bills. That’s why it is also called Medigap. For example, when you go to the hospital, the Supplement plan pays your $1408 deductible. However, Medicare Advantage charges you around $300 per day each day for days 1-7. As a result, spending a week in the hospital with Medicare Advantage will cost you $2,100.
Referrals and Underwriting
Medicare Supplement plans have consistent benefits from year to year. On the other hand, Medicare Advantage plans may change their benefits. So you will have more homework to review upcoming Advantage plans. Medicare Supplement plan require no referrals. So you can quickly go to any doctor or hospital without a referral or prior authorization. However, HMO Advantage plan requires you to get referrals. There is no medicare underwriting requirements for Supplement plan as long as you apply within your initial 6 month enrollment period (get more details on Medicare Supplement plan). Likewise, all health conditions are accepted except End-Stage Renal Disease (ESRD).
Medicare Advantage plans have lower monthly premiums. However, you will pay extra every time you use your benefits by paying fixed co-payments and co-insurance. Moreover, you will continue to pay for benefits until your reach your maximum out-of-pocket limit of about $7,000. On the other hand, Medicare Supplement plans have higher monthly premiums. However, the plan pays all copays and co-insurance costs for Medicare covered services. In other words, you total out-of-pocket equals your annual premium amount. Therefore, you get a predictable monthly expense.
Medicare Supplement require you to add Medicare Part D plan to cover prescription drugs. To avoid late enrollment penalty, you want to enroll in Medicare Part D during your initial open enrollment period October 15 – December 7. If you missed open enrollment, the new open enrollment is January 1 – March 31, 2020. Click here for details on Medicare New Enrollment 2020. Most HMO Medicare Advantage plans cover prescription drugs. Likewise, PPO and PFFS plans may also cover prescription drugs.