A. We have discussed two common yet confusing Medicare questions in Part A and Part B of the series, now we turn to the third confusing question which is the difference between Medigap policy and an Advantage plan.
Medicare supplemental insurance policies
Aka Medigap policies, they provide additional benefits and can reduce out-of-pocket costs when combined with parts A and B.
They're provided by private insurance companies and require additional premium payments. Because they usually exclude prescription drug coverage, you may need to add Part D coverage to it. That means most people could end up with three different monthly insurance premiums to pay and coverage plans to manage - Part B, Medigap, and Part D.
There's a vast marketplace for Medigap policies, so you should shop around and get the one that fits your needs.
If you find it hard to manage the different premiums, the Advantage plans combine Medicare parts A, B and sometimes D. In essence, these policies bundle coverage into a single Medicare-approved health plan offered by a private insurance company. The level of coverage varies depending on the plan chosen; again, there are numerous options available and you should shop around.
The Bottom Line
If you still have employer health plan coverage, it can sometimes act as a Medigap plan, so usually additional coverage is not necessary. Otherwise, if you have a special health situation, a traditional Medicare combined with a Medigap plan is probably a good idea.
Advantage plans are more like the traditional employer health plans; they are great if you are willing to pay a little more for the convenience.
Finally, you can get personalized health insurance counseling at no cost from your local State Health Insurance Assistance Program.
The following are great official Medicare resources if you want to learn more: