When it comes to enrolling in Medicare, you have plenty of options to compare and contrast. One of the biggest questions many people debate is whether a Medicare Advantage or Medicare Supplement plan is the better fit.
The answer isn’t nearly as quick or easy as some people would have you believe. And the reasons are as varied as the health and financial circumstances of each person asking the question.
At Florida Medicare Specialists, we understand that your health and financial considerations will be unique, so we make it a practice to never tell anyone which is the best plan for them.
Instead, we help educate each of our clients so they can feel empowered to make the best decisions for themselves. We also keep abreast of new developments in Medicare and of misleading information that might cause harm.
Recently, we’ve seen several postings that emphatically stated they would never enroll in Medicare Advantage Plans (Part C), or they would enroll only in Medicare Supplement Plans. Supporting their opinion, many times they chose to exaggerate costs of treatment (copayments or coinsurance) of Medicare Advantage Plans, or in some instances, warn that these plans routinely deny diagnostic tests or treatments purely for purposes of savings in order to support their opinion.
So why would you be so strongly advised to avoid Medicare Advantage Plans?
Frequently, these posts encourage viewers to seek out answers from licensed sales agents, hoping to sell you on what they think is best.
At Florida Medicare Specialists, we inform; we don’t sell. We provide you with unbiased facts, so you can decide what is best for your circumstances. We base our information on the costs and benefits of Medicare Advantage vs Medicare Supplement Plans in the state of Florida. You can view specific costs and benefits for your zip code service area for Medicare Supplement and Medicare Advantage Plans.
Monthly Costs and Benefits of Medicare Advantage vs. Medicare Supplement
This discussion will compare Medicare Advantage to Medicare Supplement Plan G (the highest benefit plan). There are several different Medicare Supplement Plans from which to choose, with varying premiums and coverages, such that it would simply bog you down and confuse you to include each of the additional plans.
In comparing Medicare Advantage to Medicare Supplement, I believe focusing on a fair discussion of monthly premiums (if any), provider networks, out of pocket costs at time of treatment, and ancillary benefits, will answer the question “which is best for you?”
Ultimately, doesn’t the question boil down to cost vs benefits? And your preference?
All Medicare Supplement Plans charge a monthly premium. Plan G, because it is the highest benefit plan, also has the highest premium. And these monthly premiums are subject to increases, typically, on an annual basis.
In the state of Florida, Medicare Advantage Plans do not charge a monthly premium, except in extremely rare instances. This is one of the important differences between Medicare Advantage and Medicare Supplement. At least in the state of Florida, this is a significant driver toward Medicare Advantage.
However, in your state, you may find most, if not all, Medicare Advantage Plans charge a monthly premium. As the difference in premium closes, of course, this difference favors Medicare Supplement Plans.
Medicare Supplement Plans, including Plan G, have no provider networks that restrict you from seeking care from licensed medical providers anywhere in the US. According to Medicare, this isn’t really true, because medical providers have the right to decline participation in the Medicare System, which means they are not bound by the Medicare Fee Schedule.
While all Medicare Supplement Plans state benefits are limited to covered expenses that fall within the Medicare Fee Schedule (aka, Medicare Approved Amounts), Plan G also covers charges exceeding the Medicare Fee Schedule.
Practically speaking, because of this “excess fee benefit,” there are no Provider Networks to limit access to any provider in the US. Please note that Medicare Supplement Plans other than Plan G do not include the excess fee benefit. Take that into consideration when comparing Medicare Supplement Plans other than Plan G.
Out-of-Pocket Costs At Time of Treatment
Before we discuss this point, let’s review how Medicare Supplement Plans work.
These plans “supplement” Medicare by paying Part A and Part B covered medical expenses not paid by Medicare. With Plan G these expenses are Part A hospital deductible, and the Part B deductible and 20% of medical expenses that you must pay (office visits, blood work, etc.).
Except for the Part B deductible, what Medicare doesn’t pay, Plan G will pay. The result is 100% coverage between Medicare and Plan G.
With Medicare Advantage Plans, each time you receive medical care you will pay a contractually stipulated copayment or coinsurance (typically 20%). In some instances, the copayment will be $0, for example for a primary care doctor office visit or blood work.
In other instances, there will be a copayment in varying amounts. The largest will always be for a hospital in-patient stay.
Annual Maximum Costs
Cost considerations are broader than simply comparing monthly premiums and out-of-pocket costs at the time of treatment. Knowing if there is a limit to annual out-of-pocket medical expenses is a common concern when discussing these plans.
When that question arises, with regard to Plan G and Medicare, I think it is reasonable to explain the limit on out-of-pocket expenses is the total of annual premiums plus the Part B deductible ($226 for calendar year 2023). Considering there are no copayments or coinsurance (20%), that seems to be the only way to quantify out-of-pocket expense maximum with Plan G and Medicare.
Conversely, with Medicare Advantage, since there is no premium (Florida) but there are copayments and possibly coinsurance, the question becomes, is there a limit to annual out-of-pocket medical expenses?
The answer is yes.
Medicare requires every Medicare Advantage Plan to include, contractually, a maximum out-of-pocket expense limit (MOOP) for each plan year. This maximum out-of-pocket may increase or decrease each year. Over the past ten years MOOP has declined each year.
The advantage with regard to annual maximum out-of-pocket expense is easy to determine. Which is lower, Plan G annual premiums plus Part B deductible, or Medicare Advantage Plan MOOP?
Basis of Coverage
Basis of coverage simply means that any medical care approved by Medicare must be covered by Medicare Advantage Plans and Medicare Supplement Plans. For example, cataract surgery is a covered treatment under Medicare, so it must be covered by these plans also.
This is consistent for every covered medical treatment incurred under Medicare.
It is common for Medicare Advantage Plans to include benefits for vision, hearing, dental, prescription drugs, over the counter (non-prescription items), and a health club membership.
From plan to plan, these benefits may vary significantly, so don’t assume that every plan includes each of these, or that the benefit is the same when included. Medicare Supplement Plans may include health club memberships, and discount plans for vision, hearing, and dental. However, Medicare Supplement Plans do not include prescription benefits.
Medicare Advantage Plans vs. Medicare Supplement Plans: Which Is Best for You?
My hope is you have come to the conclusion that you should closely examine both Medicare Supplement Plans and Medicare Advantage Plans available in your area before you decide which is best for you. Remember, you can find every Medicare Advantage and Medicare Supplement Plan available in your zip code.
Is this likely to be tedious and frustrating? Yes! But that’s why we encourage you to seek advice and guidance from licensed professionals.
At Florida Medicare Specialists, our goal is to equip you with enough knowledge to make an informed decision as to which type of plan is best for you.
It is best to seek a local agent for assistance, rather than a national agent with a toll-free number. A local agent will, hopefully, be someone with whom you can rely on for on-going assistance after you have enrolled in a plan.
If you’re a Florida resident looking for help in finding the best Medicare coverage for you, call Florida Medicare Specialists to get the guidance you need.