Medicare Advantage Plans Cheaper than Medicare supplement?
Is Medicare Advantage REALLY cheaper than a Medicare supplement?
Are Medicare Advantage plans cheaper than a Medicare supplement?
When most people ask that question, they are comparing premiums.
For that comparison, YES Medicare Advantage plans have a lower premium than a Medicare supplement. But premium isn’t the only thing to consider when comparing your options.
There are reasons the monthly premium is cheaper. So we need to dive deeper to find which option will give you better value for what you pay.
Here’s a few key differences to consider:
Monthly Premium
The average Medicare Advantage plan costs $25 per month. Many Medicare supplements are $80 to $120 per month for someone who is 65 years old. Obviously $25 is significantly less than $120.
So the clear winner here is Medicare Advantage.
Maximum out of pocket
Maximum out of pocket is the amount you have to pay in a worst case scenario. If you reach this amount, then the insurance company pays 100% for the rest of the calendar year.
In 2020, the average Medicare Advantage plan had a maximum out of pocket of $4,925. But that limit is only for in network benefits. If you see a doctor out of network, then this could be significantly higher. Some plans don’t offer out of network coverage so you’d pay everything on your own if you see a doctor that isn’t in their network.
A Medicare Supplement Plan G helps pay what Medicare doesn’t except for the Medicare Part B deductible. In 2021, that amount is only $203. So after you pay $203, you are done. No more copays. No more deductibles.
$4,925 vs $203 is an easy win for Medicare supplement Plan G.
Which doctors can I see?
Medicare Advantage plans restrict you to a network. Some PPO plans offer out of network coverage. But the doctor needs to be willing to accept that plan. And they don’t have to accept any plan they don’t want to.
So with Advantage plans, you NEED to stay in a network. In certain parts of the country, this is pretty easy to do because many of the doctors and hospitals are in a network.
Other people need to make choices about which doctors are critical to them. I’ve worked with people who had 3 or 4 doctors but no Advantage plan allowed them to see each one. So they had to choose which doctors were really important and find new specialist doctors to start over with.
Medicare supplements allow you to see any doctor that accepts Medicare. That’s true nationwide. So you have significantly more flexibility to go where you want. All you need to do is verify they accept Medicare which almost all doctors do.
Medicare supplements get the win here.
Extra Benefits
Many Medicare Advantage plans include extra benefits that Original Medicare and Medicare supplements do not include.
You can typically buy these if you don’t have an Advantage plan. But that comes with an extra premium. One example you can buy on your own is a dental, vision, and hearing plan.
Some examples of these extra benefits include:
- Dental insurance
- Vision insurance benefits
- Hearing aid coverage
- Gym memberships
- Over the counter allowances
Some of these perks are really helpful. Others rarely get used. You know better which of these would be helpful for you and which ones wouldn’t.
But since they don’t cost anything extra, Advantage plans get the win in this category.
Additional Hoops to jump through
99% of Medicare Advantage plans require prior authorization for some services.
That means you need to contact the insurance company and follow their process to ask them to cover what you need done. Then they decide if you actually need it or not.
If they say yes, then you can move forward with your treatment.
If they say no, then you don’t get the treatment or you pay for it on your own.
Medicare supplements insurance companies don’t get to decide what’s covered or how it’s covered. Medicare decides and the Medicare supplement insurance company pays their share after Medicare pays its share.
No contest here. Medicare supplements are far less hassle for you which is an easy win.
Which options sounds more appealing to you?
This is your insurance and it should be based on your priorities. I work with both plans and both can be a good fit.
I believe Medicare supplements offer better value. This is because it’s easier for you. I’m willing to pay more for something to be easy.
They also greatly reduce exposure if you do need to use your coverage for something major like a cancer treatment.
And they give you the flexibility to go where you want to go. So you are in charge of your care. Not an insurance company
Advantage plans aren’t bad.
But you need to understand how they work BEFORE you enroll. So you don’t get stuck with a huge bill because you didn’t follow an insurance company’s exact process which was buried in the fine print.
That’s what I try to do.
Because the Joe Namath commercials only tell one side of the story.
So I help educate you on the differences between them such as the major pros and cons of each. And I can be transparent with what your options actually are. That’s why I’m independent. I don’t work for one insurance company. Instead I can help you compare all of your options at once.
But I’ll make it easy for you because I know how overwhelming this can feel for people new to Medicare.
If you’d like help from me you can call me directly at 855-712-7316, email me at Mike@askMedicareMike.com or fill out the form below and I’ll reach out shortly.