Medigap versus Medicare Advantage

2014 Medicare and Medigap Updates

Medigap versus Medicare Advantage

The debate about Medigap versus Medicare Advantage has always been one of the most important questions that people in their retirement years need to answer fairly quickly. However, the complexity of the matter leaves little room for an immediate decision to be made. Today, there remains to be no straightforward answer to such a question leading to confusion by many. At its core, the Medigap or Medicare Advantage question boils down to which of the two plans match your need vis-à-vis the cost effectiveness of both plans.

In the following post, we will detail the nuances of the Medigap versus Medicare advantage debate so seniors can have a simple but effective reference when deciding on a Medigap policy or Medicare advantage plan.

Medigap. At its core, Medigap is the only true Medicare supplemental health insurance available on the market. It can only be availed of if you already have a basic Medicare plan in place. It is also critical to remember that while Medigap is heavily restricted by legislation, it is a system that is run by private health insurance corporations who try to outbid each other for new clients. As of the end of 2012, there are 10 different packages in total comprising of various coverage items, from deductibles to emergency medical coverage during foreign travels. A key facet of the Medigap market is that competition among providers has led to different pricing schemes even if the offered plans have exactly the same scope. This makes it doubly important for interested parties to take the time to look through all available options before jumping into one the plans without close inspection.

Medicare Advantage. This is not a supplemental plan to Medicare; rather, it can be considered as a substitute to basic Medicare. The concept of Medicare Advantage also leverages the idea of competing businesses among private health care providers that also administer Medicare Advantage. The law mandates that the Advantage plans being offered should, at the very least, match the scope of basic Medicare. On top of that, providers can maneuver their plans by offering lower co-payments or providing extra benefits where applicable. However, one has to remember that enrolling into a Medicare Advantage plan nullifies your eligibility to Medigap. The debate between Medigap versus Medicare Advantage therefore arises because of the mutually exclusive nature of these two health insurance policies.

Choosing to go Medigap or Medicare Advantage is never an easy decision but if proper care is taken to assess which plan meets your needs best at a price that is affordable and advantageous, you can always expect to be successful in this regard. If you want help on comparing plans, you can call your State Health Insurance Assistance Program (SHIP) and get in touch with a professional who can walk you through the details. Especially if your personal knowledge in this area is limited, it never hurts to consult with the experts to guide you in making the right decision when chooing between Medigap or Medicare Advantage.

Remember; your decision on Medigap versus Medicare Advantage must be squarely based on how these plans meet your needs at a price that you can afford. Consider that the most basic mantra in selecting a health insurance plan and you can never go wrong with your final decision.