The U.S. had more than 40 million Medicare beneficiaries in 2010.
Medicare is a health insurance plan offered mainly to senior citizens in the U.S. Medicare comes in four main parts, labeled A, B, C and D. Parts A and B are original Medicare and have preventive and hospital benefits, while Part D was created in 2003 and covers only prescription drugs. Part C, Medicare Advantage, is designed to work differently than the other three parts. Medicare beneficiaries can also purchase Medicare Supplement plans, often referred to as Medigap. While users sometimes confuse Medicare Advantage and Medigap, they are not the same.
Function
Medicare Advantage and Medigap plans have completely different functions. Medicare supplements do offer additional benefits but are meant primarily to help fill in the holes of original Medicare by providing assistance for annual deductibles, co-pays, coinsurance and excess charges. Medigap does not replace any part of Medicare. Medicare Advantage (MA), however, completely replaces Parts A and B. It also lets users combine their original Medicare benefits along with additional coverage for vision, hearing or dental. Both kinds of policies are purchased from a private insurance company rather than the federal government.
Standardization
The benefits for Medigap plans are standardized by the government. The same Medigap policies offer the same benefits no matter where you live or which company you purchase them from, except for a few states that have permission to reorganize their Medigap plans, such as Minnesota and Wisconsin. The insurance companies that sell Medigap have more leeway. They must offer all the same Part A and B benefits as the government (except for hospice), but can choose which other benefits they add, if any. Most MA plans come with prescription drug coverage. Other may also also offer vision, hearing, health and wellness program or dental benefits.
Types of Plans
Medigap plans are usually offered only one way, as traditional fee-for-service plans that allow you to go to any doctor who accepts your insurance. Some states, but not all, also sell Medigap as Medicare SELECT, policies which are managed similar to HMOs. A Medicare SELECT user pays lower out-of-pocket costs in return for receiving all her medical services from approved providers that are part of her insurance company's network. By contrast, Medicare Advantage plans are sold as many types of plans. Besides fee-for-service plans, you can also find MA as HMOs, PPOs, special needs plans for people with certain health conditions and as policies which work with medical savings accounts.
Guaranteed Enrollment
Medicare Advantage and Medigap differ in how they handle guaranteed enrollment. Both kinds of policies have provisions for this, in which you cannot be turned away regardless of pre-existing conditions, health, age or gender. However, Medigap's guaranteed enrollment period is only during the first six months after you join Part B. After this, companies selling Medigap do not have to allow you to join unless state law requires them to do so. Medicare Advantage plans must accept you at any time, unless they are closed to all new members.
Tags: Medicare Advantage, Medigap plans, Advantage Medigap, Medicare Advantage Medigap, original Medicare