Fight Night: Medicare Supplement VS Medicare Advantage Insurance

Seniors trying to decide which way to go with their Medicare benefits for the best coverage at the lowest cost with the least financial risk need to understand the pros and cons of Medicare Supplement Plan G – or Medigap coverage – and Medicare Advantage.

Medigap is Medicare Supplement Insurance that helps fill “gaps” in Original Medicare and is sold by private companies. Original Medicare pays for much, but not all, of the costs for covered health care services and supplies. 

Get the full story in the 2020 Guide to Choosing Your Best MEDICARE Plan

A Medicare Supplement Insurance (Medigap) policy can help pay the remaining health care costs, like:

  • Copayments
  • Coinsurance
  • Deductibles

Some Medigap policies also cover services that Original Medicare doesn’t cover, like medical care when you travel outside the U.S. If you have Original Medicare and you buy a Medigap policy, here’s what happens:

  1. Medicare will pay its share of the Medicare-approved amount for covered health care costs.
  2. Then, your Medigap policy pays its share.

Note, you must have Medicare Part A and Part B to be able to then ‘supplement’ that plan.

A Medigap policy is different from a Medicare Advantage Plan.  MA plans are ways to get Medicare benefits, while a Medigap policy ‘supplements’ your Original Medicare benefits.

NOTE: You’ll need to purchase a separate Pharmacy Plan with Supplement Plan G, as this plan does not cover prescription drugs. You should definitely purchase the pharmacy plan because if you don’t buy a pharmacy plan when you are first eligible, then you will pay an increased premium penalty for the rest of your life.

Now, let’s compare some big differences between Advantage and Supplement Insurance.

The Story You Haven’t Heard About Medicare ADVANTAGE and Medicare SUPPLEMENT PLAN G

There have been several studies done by the Henry J Kaiser family foundation. 

The studies found that half of all Medicare Advantage enrollees would incur higher cost than a boomer that just has part A and part B Medicare with no supplement. 

After five days in the hospital, the individual that had a Medicare Advantage Plan would still be out of pocket 50% more than an individual that did not even have a supplement. In other words, people who ONLY had Medicare A and B would pay 50% less than those that had Medicare Advantage.

That same study at the Kaiser family foundation also found that for the average Medicare Advantage enrollee, their average out-of-pocket would be $4,980.00 for ‘in-network’ services – meaning hospitals in their network. 

Or, the enrollee would pay $8,828.00 of their out-of-pocket costs if they were to go ‘out-of-network’ when compared to an individual that had a Medicare Supplement Plan G. 

A Supplement Plan G for 2020 only has a $198.00 deductible. During the year 2020, everything else is paid 100% by Plan G and Medicare Part A and Part B. 

The actual maximum out-of-pocket cost to a Medicare Advantage enrollee is $6,700 for the year of 2020 for ‘in-network’ medical costs.

After that Medicare Advantage would pay 100% of everything else. 

If that same individual had a Supplement Plan G, they would, again, only pay their $198 deductible plus their supplement premiums for the year 2020 before Plan G, Part A & Part B paid 100% of all remaining medical costs. 

FACT: Monthly insurance premiums change from year to year, so we can only calculate what you’ll pay in the year of 2020 and you should plan on it changing in the year 2021. 


In a Nutshell

As you can see, Medicare Advantage Plans have the edge on… 

  • extra perks
  • pharmacy plans included 
  • lower monthly premium

Medicare Supplement Plan G takes the prize of the best health insurance option for what matters most…

  • low annual deductible
  • out-of-pocket costs for any medical costs you have throughout the year
  • freedom to choose your desired medical services providers from a broad network of options

That’s freedom, flexibility, and peace of mind.

PRO INSIGHT: Most Medicare Advantage plans also require that if you need durable medical equipment, spend days in a nursing home facility after a hospital stay or go to the hospital for a non-emergency event, you must have pre-approval and permission/authorization or there is no coverage. 

Gain INSTANT ACCESS to the tell-all, fresh-off-the-presses report called 2020 Guide to Choosing Your Best MEDICARE Plan

  • Dispel the myths and finally get the INSIDE SCOOP everyone should know about Medicare benefits 
  • Break through the cloud of confusion and misinformation and once-and-for-all gain clarity on how Medicare Advantage vs. Medigap ‘Supplement’ Plans work 
  • Discover the best next step to maximizing your Medicare benefits while minimizing costs and financial risk based on your unique needs

None of these headaches exist with Medigap insurance. 

With Medigap Insurance, if you feel like you have to go to the hospital you go. If your doctor believes that you need to have a surgery or that you need to see a specialist then you go to whoever you want to go and see without any pre-approval or penalties.

Take the Best Next Step!

Schedule a No Cost, No Obligation MEDICARE SOLUTIONS CONSULT with the Health Insurance Expert, Aubrey Allred. In this video meeting or phone call, you’ll get all your questions answered and find the very best Medicare insurance solution for your individual needs.