Comparing Medigap and Medicare Advantage: The Key Differences

As you approach age 65, it's important to understand your options under Medicare, the federal health insurance program. August is a common time for churches and individuals to begin planning for the coming year, making it an ideal moment to review your health care coverage and financial strategy.

Navigating Medicare can be complex, but gaining a clear understanding of coverage types, enrollment periods, costs, and supplemental options will help you make informed decisions with confidence and faith.

Key Enrollment Periods

Your Initial Enrollment Period (IEP) begins three months before your 65th birthday and ends three months after. Missing this window may result in late enrollment penalties, so timely action is essential.

Understanding Medicare Parts A and B

Medicare is divided into several parts, each offering different types of coverage:

Part A (Hospital Insurance): Covers inpatient hospital stays, skilled nursing facility care, and some home health services. Most people don’t pay a premium for Part A due to Medicare taxes paid during employment.
Part B (Medical Insurance): Covers doctor visits, outpatient care, preventive services, and more. Everyone pays a monthly premium for Part B, which varies based on income and changes annually.

Together, Parts A and B form Original Medicare, which typically covers about 80% of approved health care costs. The remaining 20% is your responsibility, and there is no cap on out-of-pocket expenses.

What Original Medicare Doesn’t Cover

Original Medicare does not include coverage for most prescription drugs; dental, vision, and hearing services; and long-term care or home health care.

To fill these gaps, many people choose additional coverage through:

Medicare Supplement Insurance (Medigap)
Part D Prescription Drug Plans
Medicare Advantage Plans (Part C)

Medigap vs. Medicare Advantage

Medigap is optional supplemental insurance sold by private companies to help cover out-of-pocket costs like deductibles and coinsurance. It works only with Original Medicare and cannot be combined with Medicare Advantage. Keep in mind some limitations to Medigap coverage, such as eligibility and possible pre-existing conditions and state regulations -- especially outside of the initial enrollment period.

Medicare Advantage (Part C) is an alternative to Original Medicare and is offered by private insurers. These plans often bundle hospital, medical, and prescription drug coverage, and may include extra benefits like dental, vision, and hearing. The most common types of Medicare Advantage plans are Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), and Private Fee-For-Service (PFFS) plans. To join a Medicare Advantage Plan, you must be enrolled in Medicare Parts A and B.

Considerations When Choosing:

Cost: Medicare Advantage plans often have lower premiums but may include higher out-of-pocket costs.
Provider Flexibility: Medigap offers broader access to providers nationwide.
Additional Benefits: Medicare Advantage may include bundled extras like dental and vision.
Health Needs: Medigap may be better for those with chronic conditions or who need frequent medical visits.

A Third Option: MMBB’s Group Retiree Insurance Plan

Did you know MMBB offers a Group Retiree Insurance Plan from The Hartford for eligible members over 65? This plan supplements Original Medicare but does not replace it. It also provides some pluses over Medicare Advantage:

Freedom to choose any provider that accepts Medicare
Nationwide access with no network restrictions
Prescription drug coverage through Express Scripts, one of the broadest pharmacy networks
Coverage for services like acupuncture and chiropractic care, which many private plans exclude¹

This plan is administered by UMR and is an alternative to Medicare Advantage and Part D. To learn more, contact UMR at 866-868-0502.

Choosing between Medicare Advantage, Medigap, and MMBB’s Group Retiree Insurance Plan depends on your health needs, financial situation, and personal preferences. Review each option carefully and consider speaking with a Medicare specialist and your financial planner to align your health coverage with your retirement goals.

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