How to Find the Right Medicare Plan for Your Situation
- Deciding the type of healthcare network you want (national or regional);
- Deciding the level of coverage you want; and
- Understanding how much you can pay each month.
Both Medicare Advantage and Medigap (Medicare Supplements) have pros and cons. They help pay some of the costs not covered in your Original Medicare, but they do so differently.
Medigap, for example, works in conjunction with Original Medicare to fill the coverage gaps. By comparison, Medicare Advantage replaces your traditional Medicare benefits with similar benefits, managed by the plan.
Medigap vs. Medicare Advantage
Which type of health plan is right for you? Both types of Medicare insurance have their advantages and disadvantages. Using the three questions above, you can easily decide if Medicare Advantage or a Medigap plan is best for your situation.
What type of provider network do you want?
Medigap offers the exact same national network of doctors and hospitals as traditional Medicare. It’s the largest doctor and hospital network in the USA. You can use any healthcare provider that accepts Medicare.
In most cases, a Medicare Advantage plan works like an HMO and requires you to stay within their local doctor and hospital network to avoid additional charges. If you use a healthcare provider outside of the network, you pay all the costs or an increased cost (depending on the plan).
Which provider option works best for you?
- I’m ok getting medical care in my home area only.
- I want access to medical care locally AND nationally.
What level of coverage do you want?
Medigap offers comprehensive coverage. Most plans offer an additional 360 days of hospital coverage and foreign travel emergency coverage. They also help pay all or some of your deductibles, copays, and coinsurance. If you choose a Medigap plan, you will still need to enroll in a prescription drug plan (Part D), averaging $20 to $40 per month, as prescriptions are not covered by Original Medicare.
Medicare Advantage replaces Original Medicare with equivalent benefits but is not required to fill in the coverage gaps. Most Medicare Advantage plans include a prescription drug plan and may include other benefits, such as dental, hearing and vision. In most cases, Medicare Advantage charges deductibles, copays, and coinsurance, however, out-of-pocket expenses are capped at a maximum of $6,700 per year.
Which coverage option works best for you?
- I want benefit replacement coverage, with added benefits, as offered by Medicare Advantage.
- I want comprehensive cost coverage, as offered by Medigap.
How much can you afford each month?
Depending on the plan you choose, Medigap costs between $50 and $200 per month for people turning age 65. As you age, monthly premiums will increase. Increases are based on inflation and how the insurer rates their plan.
Medicare Advantage plans typically cost less, largely due to their smaller network and less coverage. The monthly cost of Medicare Advantage usually ranges from $0 to $75.
Which cost option works best for you?
- My budget can afford $50 to $200 per month for a Medigap plan plus $20 to $40 for a prescription drug plan.
- My monthly budget can afford $0 to $75 for a Medicare Advantage plan that includes prescription drug coverage.
Evaluating your answers
If all your answers were #1, you clearly want and can afford Medicare Supplemental insurance. Your next step is to go look at the plans and carriers available in your area. Use our Medigap Plan Finder.
If all your answers were #2, you’re ready to learn about the benefits and options available with Medicare Advantage. In this case, head on over to our Medicare Advantage Plan Finder to see which MA plans are available where you live.
If your answers were mixed, you’re not alone. Most people get stuck on the cost factor of a comprehensive Medigap plan. If this is your situation, answer another important question:
Can you afford to pay up to $6,700 a year in deductibles, copays, and coinsurance if you get sick?
You see, Medicare Advantage is great for younger, healthier seniors, but it’s costly and frustrating when we’re older or if we have chronic health conditions.
Look at it this way. If you have an MA plan, with prescription drug coverage and a $6,700 maximum out-of-pocket limit, that has a $50 monthly premium, your annual exposure is $7,300 plus the cost of your medications (deductible and copays). Contrast this with a Medigap Plan F at $200 per month and a prescription drug plan at $40 per month. In this case, your annual exposure is $2,880 plus the cost of your medications (deductible and copays).
See the difference? It really pays to do the math. Even if your Medigap Plan F spikes to $500 per month when you reach age 75, most people realize savings.
Compare Medicare Supplement quotes in your area and discover how much you can save.
Shop the Best Medicare Plans by State
The Medicare plan information on this page is maintained by David Bynon and was last updated on .