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How to compare Medigap and Medicare Advantage Costs

by Guest Blogger

Whether you’re enrolling in Medicare for the first time or taking advantage of the 2021 open enrollment period to explore your options, it can be hard to evaluate whether Medigap coverage or Medicare Advantage make more sense for your wallet. Have you ever thought to yourself, “how much does Medicare cost?” Figuring it out is far from simple. Here, we’ll explain the difference and how to identify which option will work best for you.

Understanding Medigap and Medicare Advantage

Medigap and Medicare Advantage can seem similar, in that both are different options for Medicare coverage and you can only choose one or the other. However, there are core differences between the two.

Medigap is a supplement to Original Medicare that helps pay for what Original Medicare doesn’t — which may include deductibles, coinsurance, and copayments. However, Medigap will also charge an additional annual premium on top of your Original Medicare premium depending on the plan you choose.

Medicare Advantage Plans are replacements for Original Medicare. Rather than supplementing Original Medicare coverage, Medicare Advantage Plans are private insurance plans that offer a variety of coverage levels at different premiums.

You can find Medicare Advantage Plans that offer $0 premiums, as well as plans that cover care Original Medicare doesn’t — such as dental and vision.

Key factors to compare

Are you willing to switch doctors?

Many of the lower premium Medicare Advantage plans are HMOs (health maintenance organizations), which only have a network of providers that they provide coverage for. If you want to switch to a Medicare Advantage plan, make sure that either your doctor accepts that insurance, or you’re willing to switch doctors to an in-network one.

How much do you plan to travel?

One of the advantages of Original Medicare is its wide acceptance nationwide at hospitals and private practices. If you plan to split your time between two locations, or if you simply want to spend a lot of time travelling in the future, Medigap may have a more appealing flexibility than Medicare Advantage plans.

What’s your IRMAA?

Some, but not all, Medicare Advantage plans include prescription drug coverage. Those are known as MAPD plans, and if you have a MAPD plan and earned a higher income, you’ll have to pay what’s known as an IRMAA, or Income-Related Monthly Adjustment Amount.

The IRMAA charges a progressive fee to high earners based on their tax returns, and you can be charged an IRMAA on both your Part B and Part D plans. However, as Part D is optional insurance coverage, if you don’t have Medicare Part D or a MAPD plan, you don’t have to pay the additional IRMAA (although you still have to pay one for Part B).

Do you have a pre-existing condition?

If you’re eligible for Medicare for the first time, you have a one-time, 6-month-long open enrollment period where you can buy a Medigap plan without any sort of medical screening.

However, unless you live in CT, MA, ME or NY, Medigap plans can deny you coverage or increase your premiums if you apply after that initial open enrollment window. If you fall into that category, you should fully investigate whether Medigap is worth the investment now so that you can have it for decades to come.

About the Author

Shana Aguilar is a content strategist at a digital marketing agency where she helps companies connect to people through informative and authoritative content. She is currently working with businesses in the healthcare finance sector to help doctors and dentists live their best financial lives.


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