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4 ways Medicare Advantage and Medicare supplement differ

Two options explained

When starting your research about Medicare, you’ve likely discovered that Original Medicare (Part A and Part B) doesn’t cover everything. That’s why most people choose to purchase a plan that provides extra coverage through a private insurance company, like Wellmark Blue Cross and Blue Shield.

Two of the most popular types of coverage you can choose from are Medicare Advantage and Medicare supplement. Before jumping into how these types of plans are different, let’s start with the basics.

Medicare Advantage and Medicare supplement: A quick explanation

Medicare Advantage — also known as Medicare Part C — combines Medicare Part A (hospital costs), Medicare Part B (medical care) and often Medicare Part D (prescription drugs). While exact details of Medicare Advantage coverage depend on the plan you select, most plans cover things like preventive services and screenings, dental, vision and hearing care, prescription drugs, plus much more.

Medicare supplement — often referred to as Medigap coverage — helps pay for some health care costs and services not covered by Original Medicare, such as deductibles Glossary popover, copays Glossary popover and coinsurance Glossary popover. If you need dental, vision, hearing, or prescription drug coverage, you’ll likely need to purchase that separately.

While both plan types help you pay for your health care costs during your Medicare years, there are some basic differences between these two types of coverage.

4 ways Medicare Advantage plans and Medicare supplement plans differ

  1. Medicare Advantage plans have a network of health care providers or hospitals you can use.

    With Medicare Advantage plans, you may be able to choose from either a PPO or HMO network. PPO networks have a broad network of doctors and hospitals to choose from with no need for referrals. HMO networks have a network of doctors and hospitals, too. However, you may need a referral for care outside of the network. With both PPO and HMO, you'll choose providers from your plan's network when receiving routine care. With some plan options, you can even get routine care while traveling, or if you spend part of your year at a second home.

    With a Medicare supplement plan, you can see any Medicare-participating provider. That means you have access to a large percentage of providers across the United States. In fact, 9 out of 10 primary care physicians accept Medicare External Site, according to the Kaiser Family Foundation. You also don’t have to worry about a referral to see a specialist with a Medicare supplement plan.

  2. You can switch Medicare Advantage plans at certain times of the year.

    If you’re interested in switching your Medicare Advantage plan, the time to do it is during the Annual Enrollment Period, also known as AEP. AEP runs each year from Oct. 15–Dec. 7. If your circumstances change outside this timeframe, like you move out of Iowa or South Dakota or lose other insurance coverage, you may qualify for a 60-day Special Enrollment Period (SEP). There's one more timeframe to note with Medicare Advantage — the Open Enrollment Period (OEP) — which goes from Jan. 1–March 31 every year. If you've enrolled in a Medicare Advantage plan and want to switch to a similar plan — this is the time to do it. It's kind of like a return policy for your plan.

    With a Medicare supplement plan, you can switch your plan at any time, but you may have to answer health questions.

    For both types of plans, if you’re newly eligible for Medicare, you can enroll during your seven-month Initial Enrollment Period.

  3. Medicare Advantage plans typically have a low monthly premium.

    With a Medicare Advantage plan, you often pay a low or $0 monthly premium, in addition to your Part B premium. When you use your benefits, you’ll be responsible for copays, coinsurance and deductibles.

    With a Medicare supplement plan, you’ll pay your monthly premium and the Part B premium. When you seek care, Medicare will pay its share of the Medicare-approved costs. Then, your Medicare supplement policy pays its share. This means your out-of-pocket costs are more limited when getting health care services.

  4. Medicare Advantage plans typically include prescription drug coverage (Medicare Part D).

    Instead of purchasing prescription drug coverage on its own, Medicare Advantage plans typically have prescription drugs bundled within the benefits. In addition, they often include other benefits like dental, vision and hearing, and even gym memberships, like SilverSneakers®.

    If you choose to enroll in a Medicare supplement plan, you’ll have to purchase your Part D coverage as a stand-alone benefit. Keep in mind, you can only switch your prescription drug coverage during AEP or if you experience an SEP.

Choosing the right Medicare plan for you

Now that you know the key differences between a Medicare Advantage and Medicare supplement plan, you can decide which type of coverage may work best for you.

A Medicare Advantage plan could be a great fit for a person who:

  • Prefers a lower monthly premium and higher out-of-pocket costs
  • Is comfortable with choosing a doctor who participates in a plan network
  • Wants all coverage bundled together in one plan

On the other hand, someone who might want to consider Medicare supplement coverage:

  • Prefers monthly premiums with few out-of-pocket costs
  • Values freedom to see any doctor
  • Wants to mix and match different coverage options to meet their needs

Want to learn more? Let Wellmark help. If you live in Iowa or South Dakota, you can request your free Medicare Get-Ready guide Opens New Window to learn more about the different parts of Medicare, your coverage options, and when you're eligible to enroll. You can also call us directly at 800-336-0505.

If you live outside Iowa or South Dakota, visit the Blue Cross Blue Shield Association website External Site or call 888-630-2583 to find a Blue plan near you.