Medicare Supplement vs Medicare Advantage in 2024

Are you comparing Medicare Supplement plans vs Medicare Advantage plans and wondering which plan is best? We have taken the difficulty out of this decision by covering all the ins and outs of the two plans to help you make an informed decision.

Understanding the Basics

Before diving into the specifics, it’s important to understand that both plan types require you to have Medicare Part A and Part B in place. Part A is generally premium-free if you have worked for 10 years, while Part B has a premium attached to it, which is $174.70 per month for most people in 2024.

What Are Medicare Advantage Plans?

Medicare Advantage plans, also known as Part C, are offered by private insurance companies. These plans combine your Part A (Hospital Insurance) and Part B (Medical Insurance) coverage, taking over your Original Medicare. Medicare Advantage plans often include additional benefits like dental, vision, hearing, and prescription drug coverage, depending on the plan. However, they usually have networks of doctors you must stay within.

What Are Medicare Supplement Plans?

Medicare Supplement plans, also known as Medigap, are also offered by private companies but pay secondary to Original Medicare. With these plans, your Medicare remains primary, allowing you the freedom to see any doctor in the country who accepts Original Medicare. Medicare is your primary coverage, and the Supplement pays after Medicare pays.

Pros and Cons of Medicare Advantage Plans

Let’s take a closer look at some pros and cons of this type of plan.

Pros

One of the biggest advantages of Medicare Advantage plans is the low monthly premium. Most plans are $0 per month, although you still have to pay the Medicare Part B premium. These plans often include the convenience of integrated drug coverage and additional benefits like dental, vision, and fitness perks.

Cons

There are some drawbacks to Medicare Advantage plans, including potential out-of-pocket costs, provider networks, and the need for prior authorizations for certain services. Most Medicare Advantage plans have a maximum out-of-pocket limit, which ranges from $3,000 to $7,000 annually, depending on the plan. Some HMO plans offer lower maximum out-of-pocket costs but come with a more restrictive network of doctors.

Another downside is the provider network restriction. HMO plans usually require referrals to see specialists and have more restrictive networks. In contrast, PPO plans offer more freedom but generally come with higher out-of-pocket costs for out-of-network coverage. Additionally, prior authorizations can cause delays in getting treatments like surgeries.

Pros and Cons of Medicare Supplement Plans

Now let’s look at some of the benefits and drawbacks of Medicare Supplement plans. 

Pros

Medicare Supplement plans provide the most coverage and flexibility compared to Medicare Advantage plans. They allow you to see any doctor nationwide who accepts Original Medicare without needing a referral. These plans also come with minimal out-of-pocket expenses, other than the Part B deductible on Plan G, which is the most popular Medicare Supplement plan.

Cons

The biggest downside of Medicare Supplement plans is the cost and the potential for rate increases over time. Premiums can range between $80-$150 per month or more, depending on your age and location. Additionally, these plans do not cover prescriptions, dental, or vision, requiring separate policies for these needs.

Which Plan Is Best for You?

Deciding on which plan option to go with largely depends on your financial situation. If you can afford the premiums on a Supplement plan and a separate drug plan, you will enjoy the most coverage and the least out-of-pocket expenses throughout the year. However, if you prefer lower premiums and are willing to take on more copayments and out-of-pocket costs, a Medicare Advantage plan might be the best option for you.

If you’re new to Medicare Part B, we generally recommend starting with a Medicare Supplement plan. You have a six-month window to purchase a Supplement plan without any health underwriting when you first enroll in Medicare Part B. After this period, you may have to answer health questions and could be denied coverage. While you can always switch from a Supplement to an Advantage plan without health questions, switching from an Advantage to a Supplement plan might require health underwriting unless you qualify for special circumstances like guaranteed issue situations.

Bluewave Insurance Is Here to Help

If you’re looking to compare plan options, give us a call at 800-208-4974 to book an appointment with us. We work with both Advantage and Supplement plans and charge nothing for our services.