How do you know which is better for your client, Medicare Advantage or Medigap which is a Medicare Supplement?
In this post, we’ll take a look at the pros and cons of both plans as well as what a sample client’s needs might be in each case.
Finally, we’ll wrap up with some additional things to consider when presenting the information to your clients. Of course, there is no one-size plan that fits all circumstances when it comes to putting together a personalized health care plan, but we hope the information below helps you guide your clients towards the decision that’s right for them.
The simplest way to think of Medicare Advantage is that this plan bundles your Part A, Part B, and usually Part D coverage into one plan offered by private carriers that are approved by Medicare and follow special rules. (Source: Medicare.gov)
Medicare Advantage Pros
Low Monthly Premium
Medicare funds the premium either partially or fully through an insurance carrier.
Plans may include coverage not included in Original Medicare (Parts A and B) such as dental, vision, and services.
Special Needs Plans (SNP) are available in some markets for beneficiaries who are dual-eligible, veterans or have been diagnosed with specific chronic conditions.
Drug Coverage Included
Plans usually include drug coverage, eliminating the need for another policy.
Medicare Advantage Cons
The plans are network-based which may limit your clients’ access to services.
There will be co-payments for services used, and these payments add up, making it a less optimal choice for some clients.
The maximum out-of-pocket costs may be too high for a client who will use the plan a lot.
Since plans might change annually, your client may have to shop for coverage more often.
Medicare Advantage Sample Client Needs
- Providers are in-network
- Travel frequency is minimal except to see family and friends
- No pre-existing conditions that require frequent usage
- Extra benefits are important to them
- They want low premiums
Medigap – Medicare Supplement
Medigap is Medicare Supplement Insurance that helps fill “gaps” in Original Medicare and is sold by private companies. Original Medicare pays for much, but not all, of the cost of covered health care services and supplies. A Medigap policy is different from a Medicare Advantage Plan. A Medigap policy only supplements your Original Medicare benefits. (Source: Medicare.gov)
Works Wherever Medicare Does
For clients who like to travel or live in multiple locations, they only have to follow Medicare’s networks.
Change Plans Anytime
That’s right, with Medicare Supplement or Medigap plans, clients can switch plans anytime. There are no special election or enrollment periods. Clients may be required to go through the underwriting process to be approved by a carrier.
Most plans will come with a premium and some minor costs, with limited out-of-pocket costs.
Premiums will typically be higher than Medicare Advantage plans and rates can rise as the client ages.
No Extra Benefits
Plans do not include any extra benefits. If Medicare does not pay, neither will the supplement.
Poor health conditions may prevent clients from enrolling into a new or different plan if they already have a policy.
No Drug Coverage
Clients will need a separate drug (Part D) plan to cover prescription drugs.
Medigap Sample Client Needs
- Does not want to pay co-payments
- Travels a lot for long periods
- A plan that allows for high utilization
- An unrestricted provider network is important for them
Things to think about …
Cost is not the only concern. Sometimes when a client has been with a carrier for many years and is comfortable with the claims process, they may prefer to stay with that carrier even if it costs more.
Different carrier brands have additional benefits that may be important to your client. These perks can range from discounts on claims to vision and hearing, etc.
Sometimes couples will have very different coverage needs. For one client, Medicare Advantage might be the best, whereas their spouse might need a Medicare Supplement Plan.
MA Trial Right
Depending on circumstances, clients who are first enrolling into a Medicare Advantage plan may have a 12-month trial right. This means that they can leave the plan within the first 12 months and return to their Medicare Supplement plan.
For clients who want to enroll in a Medicare Advantage plan outside of AEP, Special Election Periods (SEP) may be available.
Do you have a better understanding of when to offer Medicare Supplement and Medicare Advantage?
If you found this helpful, let us know in the comments below. Also, let us know what you want to learn more about to grow your book of business.
Join our team! If you are a Medicare agent and have questions about Sales or Medicare, call Arnie Fulmer at 702-820-3133. Arnie Fulmer is a Senior Market Advisor and the principal owner of Fulmer Insurance Group, a Medicare Brokerage Agency located in Las Vegas and licensed in multiple states.
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