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Medicare Advantage Plans

Medicare Advantage Plans are health plans approved by the federal government and run by private companies. These plans are also sometimes referred to as Medicare Part C. Medicare Advantage Plans are not supplemental insurance and must follow rules set by Medicare.

Medicare Advantage Plans will provide benefits at least equal to those in Medicare Part A - Hospital and Medicare Part B – Medical.  Medicare Advantage Plans may have different doctor co-payments, hospital coinsurance, and deductibles for than original Medicare coverage.  Key differentiators for Advantage plans are the maximum out-of-pocket expenses that could possibly occur in a twelve (12) month period, current doctor’s network and your current formulary of prescriptions supported in the plan.  These three (3) areas are recommended to be confirmed before final selection of any advantage plan.
Depending on the plans in your state, some Medicare Advantage plans have a maximum out-of-pocket expense MOOP that is at $6,700 per year.  There is a balance between making sure you are comfortable with your plan and understanding the financial risk versus lower premiums. 
Medicare Advantage Plans might also offer added benefits as incentives, such as some benefits for vision, hearing, dental, and/or health and wellness club membership programs and most will include prescription drug coverage for an additional cost.

Most companies offering Medicare Advantage Plans have automatic claims filing. That means you do not have to worry about filing a claim with the insurance company.  With Medicare Advantage claims, your doctor submits an approved medicare service bill to the insurance company, the insurance company checks it against its covered services agreement with medicare, then the insurance company pays the doctor.  The services agreement made with Medicare can change each year.  It does not have standardized coverage like a Medicare Supplement Plan.  Before renewing a Medicare Advantage plan each year, you should check your coverages as per that plan.

Types of Medicare Advantage Plans

  • Health Maintenance Organization (HMO) – Offers low to no co-payment for doctor office visits and no deductibles. However, you are required to receive a referral from your Primary Care Doctor before seeing a specialist, and to receive full benefits, you must use doctors and hospitals that are within the provider’s network.
  • Preferred Provider Organization (PPO) – These plans also offer low co-payments that are usually slightly higher than those of an HMO. But also allow freedom of choice when choosing a doctor or hospital as long as they are part of their network.
  • Private Fee-for-Service (PFFS) Plans – PFFS plans usually offer the most flexibility. As they allow you to choose any doctor or hospital of your choice because there is no provider network. However, your doctor or hospital must accept the plans conditions prior to treating you, except in the case of emergencies.
  • Medical Savings Account – This is a very popular option. This plan combines a high deductible health plan with a medical savings account. The government will put money in this account, which you can use to pay your deductible or other out-of-pocket medical expenses such as dental and vision care.

What are the differences between Medicare Advantage Plans and Medicare Supplements?

Medicare Advantage Plans

  • Medicare contracts with private insurance companies to administer your Medicare health plan benefits.
  • Total Maximum-Out-of-Pocket MOOP costs are typically at $6,700 per year.
  • Monthly premiums may or may not be higher that Medicare supplemental plans.
  • Some plans will include Medicare Part D prescription coverage.
  • Many plans have co-pays for doctor visits, coinsurance per day for hospital stays, rehab and other services.
  • Typically you are required to see a doctor within a network, unless specifically stated as freedom of choice.
  • Premiums can increase each year and co-pays, coinsurance and deductibles can change according to the insurer.

Medicare Supplement Plans

  • The government administers Original Medicare health plan benefits and has established ten (10) Medicare Supplement plans designated A through N in all states except for Massachusetts, Minnesota, and Wisconsin.  The insurers that provide plans A through N must coordinate payments according to the guidelines of the plans. 
  • Monthly premiums may or may not be higher than Medicare Advantage plans.
  • Total Maximum-Out-of-Pocket MOOP costs are typically at $0 per year for Plan F to $147 per year and a $20 doctor copay for Plan N.
  • Prescription coverage is not provided but Medicare Supplemental Advisors will help you select the most cost effective plan based on your prescription drug formulary.
  • You have the freedom to choose any doctor or any hospital in any state that accepts Medicare.
  • Premiums can increase with your age as most plans are based on attained age.
  • Plans are guaranteed renewable which means benefits are paid regardless of health for as long as you own the policy and pay the monthly premium.

Sterling Insurance is an independent broker agency specializing in Medicare Supplement, Dental, Vision, Hearing and Medicare Part D Insurance Plans and is not connected with or endorsed by the United States Government or with the Federal Medicare Program.

Contact Sterling Insurance for a free consultation to learn about the differences in plans.