Prior to selecting a healthcare plan, it is essential to have a clear understanding of the distinctions between various options, particularly Medicare Supplements and Medicare Advantage Plans. Many individuals mistakenly enroll in Advantage Plans, assuming they are Supplements, when in fact they are not.

A Medicare Supplement is utilized alongside original Medicare. Any healthcare provider who accepts Medicare will accept a Supplement since they only need to bill Medicare. Medicare covers their portion (usually 80% of Medicare-covered benefits) and sends the remaining balance to the Supplement, which covers its portion (usually 20%). It is important to note that Supplements do not include Prescription Drug Coverage (Part D, PDP). Individuals who fail to obtain a PDP when initially eligible will face a penalty when they do eventually enroll in one, with some exceptions. A Medicare Supplement remains unchanged from year to year, although the cost generally increases while the coverage remains the same.

In contrast, a Medicare Advantage plan functions differently from a Supplement. With a Medicare Advantage Plan, a private company takes over for Medicare (though you remain in the Medicare system), and Medicare is no longer responsible for your medical bills. These plans operate similarly to many group plans, such as HMO or PPO. When considering this type of plan, there are several important factors to remember. First, most Advantage Plans have networks, so it is crucial to ensure that your doctor, hospital, and auxiliary care providers are within the network. Otherwise, you will face higher costs and, in some cases, be responsible for 100% of care obtained outside the network. Second, Advantage Plans involve co-pays, and it is essential to be aware of these costs as they can accumulate significantly. Third, most Advantage Plans include Part D prescription drug coverage as a built-in feature. However, if you switch from an Advantage Plan to a Supplement, you will also need to add Part D coverage. It’s important to note that there are certain types of Advantage Plans that do not have Part D included, so this is a crucial consideration when selecting any plan. Lastly, Advantage Plans typically offer additional benefits, which may vary depending on the plan. These benefits can include health club memberships, limited dental, eye, and/or vision coverage.

Furthermore, it is important to understand that not all Part D plans are identical. While they are required to be at least as comprehensive as the Medicare model, there can be significant variations in costs, co-pays, and the specific drugs covered. Therefore, it is crucial to assess which plan suits your needs and to review your options annually since both Advantage Plans and Part D plans undergo changes each year.

Given the regional variations in these plans, it is strongly recommended that you consult an independent insurance agent to assist you in selecting the plan that best meets your requirements.

We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1 (800) MEDICARE to get information on all of your options.
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