Medicare: Medigap vs. Medicare Advantage

If you have Original Medicare, the traditional health insurance program run by the federal government, it pays for most of your health care. However, it doesn’t pay for everything. The out-of-pocket costs can get expensive for people who need a lot of health care.

There are two ways you may be able to lower your costs. One way is to keep Original Medicare and buy supplemental insurance to help pay your out-of-pocket costs. Medigap plans are supplemental insurance you can buy. Medigaps work only with Original Medicare, not with Medicare Advantage Plans. Private insurance companies sell Medigaps.

Another way you may be able to save money is to get your Medicare benefits through a Medicare Advantage Plan instead of Original Medicare. Medicare Advantage Plans, or Medicare private health plans, are also sold by insurance companies. They’re usually HMOs or PPOs. Medicare Ad-vantage Plans must cover the same benefits as Original Medicare, but your costs may be different. When you’re in a Medicare Advantage Plan, you pay more for some types of health care and you pay less for other types of care.

If you have insurance from a job, never join a Medicare Advantage Plan without checking with your employer insurance first. Find out how joining a Medicare Advantage Plan will affect your ben-efits. This is important whether you’re retired or still working.

If you’re choosing between Original Medicare with a Medigap or a Medicare Advantage Plan, look at your needs and what you can afford. Here are some facts about both to help you decide.

Medigaps

 Let you keep Original Medicare. You can go to any doctor or hospital in the country that accepts Medicare. The Medigap will help cover your Medicare out-of-pocket costs.

 Are standardized by law. Plans sold between July 31, 1992 and May 31, 2010 cover a certain set of benefits. Plans sold on or after June 1, 2010 cover a slightly different set of benefits.

 Are labeled by letter. All Medigaps of the same letter cover the same benefits no matter which insurance company sells them.

 Are sold by different companies. These companies can charge different prices for the same coverage. It pays to shop around. Medigap prices vary based on where you live and your age.

 Only let you enroll at certain times. Each state has its own rules about when you can buy a Medigap. A few states let you to enroll any time.

Medicare Advantage Plans (HMOs or PPOs)

 Must cover all benefits Original Medicare covers. They may also cover extra benefits that Original Medicare doesn’t cover, such dental or vision care.

 Have different rules and costs than Original Medicare. May restrict when and how you get care.

 Have yearly out-of-pocket spending limits. These limits can be high but protect you if you need a lot of care.

 May have networks of doctors and hospitals you must use if you want to pay the lowest price.

 Only let you enroll in or switch plans at certain times. Once you buy a Medicare Advantage Plan, you must usually stay in that plan until the next enrollment period.