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Deciding Between Medigap and Medicare Advantage


Original Medicare often comes with high out-of-pocket costs. If you want more coverage than Original Medicare provides, you have two options. Either supplement with a Medigap plan or purchase a Medicare Advantage plan. Both plan types offer more coverage than Original Medicare. But understanding how the plans differ from each other is important.

“Choosing whether to go with Medigap or a Medicare Advantage plan is really a personal choice,” says Ellen Galardy, Vice President of Senior Markets Product and Strategy at Highmark Health. “We always recommend that you speak with an insurance agent to find the plan that best fits your needs. But before you have that conversation, you should understand the options.”


Answer the following questions to see if a Medigap or Medicare Advantage plan is right for you:

Do you prefer à la carte coverage or a package deal?

Medigap plans pay for the deductibles and coinsurance that come with Original Medicare. But you may need to purchase extra coverage for prescription drug, dental, or vision. Costs can add up but choosing each of your plans lets you personalize your coverage. 

Worried about doing it all yourself? Highmark has a number of options, like Whole Health Balance, that bundle prescription drugs, fitness memberships, dental, vision, and hearing aids into one convenient package. Be sure to consider your long-term needs when choosing your plan. Many people who select a Medigap plan stay with the same plan over time. They do so because changing it in the future may result in higher rates or fewer coverage options based on age or new medical conditions.   

Medicare Advantage plans roll all your coverage into one plan, allowing you to make just one decision. Medicare Advantage plans also include extra services, like nurse case managers who can help you manage a chronic condition or support your wellness goals, and other wellness benefits.  As your needs change, you'll also have the flexibility to change your plan once a year without regard to your age or medical condition. Open enrollment takes place from Oct. 15 through Dec. 7.

What is your spending style?

Medigap and Medicare Advantage each use very different approaches to spending. Medigap plans have larger monthly premiums, but you’ll pay very little when you visit a provider. It is easy to budget for your health care with Medigap plans. You’ll know exactly how much you’ll be paying each month.

With a Medicare Advantage plan, monthly premiums are low. Premiums for each plan are the same for every person, regardless of age or health history. Since you’ll only pay for the health care you use, there will be considerable savings upfront. Yet you will be responsible for copayments and coinsurance, which can be unpredictable from month to month. There is a cap on out-of-pocket spending, though most members do not reach that cap.

What are your provider needs?

Before deciding on a plan, you’ll want to consider the providers you see as well as your lifestyle. With Medigap, you’ll be free to visit any physicians or hospitals in the country as long as they accept Medicare. This is a bonus if you travel a lot, or don’t want to concern yourself with whether your provider is in-network.

Medicare Advantage plans take advantage of a defined provider network, where plans partner with trusted doctors and hospitals to offer you high-quality services at a lower cost. Other larger carriers, like Highmark, may also cover costs for you to visit providers outside of your plan’s network. Seeing in-network providers is usually less expensive, but you may have preferred providers you want to see instead. Either way, be sure to check the plan’s provider directory and out-of-network benefits before choosing a Medicare Advantage plan to keep your costs to a minimum.

Galardy believes the best choice is the plan that fits your lifestyle and budget needs. “In Pennsylvania, about 50 percent of people are choosing a Medicare Advantage plan, which means the other half are likely to choose Medigap,” says Galardy. “They are both good options, but it’s important to find the right fit for your unique preferences.”

 

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