I’m on a Medigap plan so I pay a premium each month. Most of my friends have a Medicare Advantage plan with no premium and laugh at me. Some say they don’t even pay when they go to their doctor plus they have other benefits such as vision and dental. Am I making a mistake? What do I say to them?
While it’s true that many of the Medicare Advantage plans have $0 monthly premiums and often include ancillary benefits such vision, hearing, dental, etc., there are significant differences between Medicare Advantage and Medicare Supplement (Medigap) plans.
You may want to ask your friends the following:
Q: Can they go to any doctor they want who accepts Medicare?
Answer: No, they can’t. They’re restricted by networks—in-network and out-of-network providers (who charge more than in-network providers). If they do go out-of-network, they should contact the doctor to make certain he or she will accept their plan. You, however, can go to any doctor in the country who accepts Medicare (which is approximately 95 percent of them) and they must accept your Medigap plan. This is written into Social Security law.
Q: What happens if they have an issue with their insurance carrier over a denied claim?
Answer: Medicare Advantage plans are offered by insurance companies that are contracted with Medicare. The insurance company administers all aspects of benefits, billing, and costs. This means that they will need to deal with the insurance carrier if there are any disputes. In contrast, your doctor sends your bill to Medicare, and if Medicare deems it to be medically necessary, Medicare pays 80 percent of the Medicare-approved amount and then directs your Medigap plan to pay their share. In other words, your medical decisions are between you and your doctor. In your friends’ case, the insurance carrier is involved in the decision-making process.
Q: Are your friends comfortable with needing prior authorizations for certain medical tests?
Answer: With Original Medicare and a Medigap plan, you don’t need prior authorizations. If your doctor deems it necessary and it meets Medicare's standards, your Medigap plan will pay its share of the Medicare approved amount.
Q: Are your friends aware of their potential annual maximum-out-of-pocket expenses (MOOP)?
Answer: Medicare Advantage plans can have MOOPs as high as $7,550 for in-network providers and $11,300 for out-of-network providers (the MOOP can be lower).
Medigap policies can help pay for some of the costs that Original Medicare doesn't, like copayments, coinsurance, and deductibles.
Medigap plans are standardized. Each standardized Medigap policy under the same plan letter must offer the same basic benefits, no matter which insurance company sells it. *Three of the most popular Medigap plans are below:
Plan G, which covers all the gaps in Original Medicare except for the $233 annual deductible (2022). (It covers 80 percent of foreign travel up to plan limits.)
Plan N pays 100 percent of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to a $50 copayment for emergency room visits that don't result in an inpatient admission.
The High-Deductible Plan G has a deductible of $2,490 that acts like a MOOP. If you reach your deductible, it then acts like Plan G. (There is a separate deductible for foreign travel emergency services.)
Our bodies are like vintage automobiles. As we age and accumulate mileage, we may need more repairs or replacement parts. Which kind of plan do you want to own when/if this is necessary?
*Plan F is not available to people new to Medicare on or after January 1, 2020.