Hands down, when clients visit with us about their Medicare plan options, the question we are asked most often is: Should I get a Medicare supplement plan or Medicare advantage plan? Which is the better option?
Allow me to suggest, the better question is: Which plan is a better fit?
Medicare supplement plans and Medicare advantage plans both have pros and cons. So, the real issue is, which will work better for your particular situation.
Let’s take a look at some general things that might get you headed in the right direction.
The good news about Medicare supplement plans is they have no networks of medical providers to worry about. Any medical provider that accepts Medicare, will accept your Medicare supplement plan. Also, Medicare supplement plans can keep your medical out-of-pocket expenses at a very reasonable level.
For instance, a very popular Medicare supplement plan is plan G. Enrolling in plan G means you are responsible for satisfying the Medicare part B annual deductible. The 2019 part B deductible is only $185. Once you satisfy that deductible, all other medical expenses are covered by Medicare part A & B, and your supplement plan.
Monthly premiums for supplement plan G range from about $95 - $250 per month depending on zip code, marital status, tobacco use, and age.
Be aware, if you need prescription drug coverage, then you will need to enroll in a Medicare prescription drug plan, in addition to your Medicare supplement plan. Premiums for these plans range from about $11 - $100 per month, again depending on zip code. The selection of the drug plan that best fits your needs is most often dictated by the prescriptions you take on a regular basis.
Now let’s consider Medicare advantage plans. All Medicare advantage plans in the north Texas market have one thing in common: They have a network of medical providers. So, before enrolling in a plan, it is important to determine whether the doctor(s) you want to see are in-network for the plan. If not, then you need to be prepared to change doctors.
One great benefit of Medicare advantage plans is the monthly premium is almost always less than a Medicare supplement plan, and in some cases is even $0. In a few cases, enrollment in an advantage plan will actually reduce your Medicare part B monthly premium. (It’s like getting paid to enroll).
Another benefit is, most advantage plans include part D (prescription coverage) as part of the plan.
If there is a downside to advantage plans, other than what we’ve already addressed, it’s this: By their design, these plans work more like commercial health insurance. There are copays and in some cases co-insurance you are responsible for when you use medical services. So, the potential for your medical out-of-pocket expenses to exceed what you might experience with a supplement plan is greater. Now, all advantage plans have an annual out-of-pocket maximum. This provides protection against catastrophic medical expenses. Annual out-of-pocket maximums range from about $3400 - $6700, assuming you are using in-network medical providers.
So, let’s sum this up: If you are looking for the greatest level of convenience, don’t want to be concerned with provider networks, and don’t mind paying a monthly premium for your supplement and Rx plans, then a Medicare supplement plan might be the better choice for you.
On the other hand, if you want to keep your monthly premium payments to a minimum (maybe zero) depending on where you live, your doctor is in-network for a plan in your area, and you can handle paying up to the plan’s out-of-pocket maximum – if something catastrophic should happen, then an advantage plan might be a good choice.
At Sargent Insurance we’d be honored to help you with either.
Lonnie Thibodeaux is the owner of Sargent Insurance and Financial Services. He specializes in Medicare health plans and prescription drug plans.