Medicare Supplement vs Medicare Advantage. What is the difference?
First of all, original Medicare provides Part A and Part B. Briefly, Part A covers hospital expenses and is payed for by those payroll deductions you had taken out of your paycheck for years. Part B costs about $120 a month and is usually deducted from your monthly social security check. There is also a Part D that you need to pay for. Part D covers prescriptions. You can be satisfied with this or elect a Medicare Supplement or Advantage plan. Following is what I learned when researching both...
Before retiring I decided to look into Medicare Supplements. That is when I found out about Advantage plans. I received a lot of information in the mail concerning supplements, their coverages and rates.
There are various Medicare Supplement plans ranging from Plan A through Plan N (Please do not mistake "Plan" A and B for Medicare "Part" A and B}. The plans vary by what they cover along with deductibles, copays, etc. Although all insurance companies offer the same plans with the same coverages the rates will vary by company. In most cases the rates will also vary by age, either the issue age when you first applied or your attained age each year when you renew. For the most comprehensive supplement (Plan F) the rates can be about $195 to $400 a month. That doesn't include Medicare Part D. You still need to pay for that separately. Quite costly, huh? Doctors still need to deal with Medicare. The bad thing is many doctors prefer not to.
So, is there an alternative? Yes! I have a Medicare Advantage plan, Keystone 65, from Independence Blue Cross. The word "Advantage" is fitting. The biggest difference is that it costs absolutely nothing! All I pay is the $120 that is taken out of everyone's Social Security. It also includes Part D for prescriptions. Not all Advantage plans include Part D, it is an option, but since it is free why wouldn't you want it? Don't get me wrong, some Advantage plans cost money. For instance Keystone Basic covers everything I need. It has a "0" copay for my primary physician and a "0" annual deductible (compared to an annual deductible of over $2000.00 for some Medicare Supplements). My plan has yearly maximum "out of pocket" of $6800.00. The Keystone 65 Select plan is $68 a month but has a lower annual out of pocket and a couple of other minor differences. Most Advantage plans are HMOs but some are PPOs and are priced accordingly. Finally, Advantage plans are treated like group plans. For plans with premiums the premiums are not based on age. Everyone pays the same regardless of age. You have a medical card from the insurance company which is accepted by more doctors. Your Medicare card is not needed.
Oh, one more thing... with a Medicare Advantage plan you can also get Dental, Eyeglasses, and Hearing Aid coverage for a somewhat low cost.
For my wife and I the decision was easy, pay hundreds of dollars a month for a supplement or get an Advantage plan with great benefits for free.