When it comes to Medicare coverage, there is a fork in the road: you either have to go left or right. There are 2 coverage options you can choose from.
While you can rethink this decision every year, you can only be on one path at a time. Neither path is “good” or “bad”, it is dependent on your situation and what you want.
Medicare: The 2 Paths of Medicare
What are the 2 paths of Medicare?
Almost everyone on Medicare is going to have Part A and Part B, which make up Original Medicare. Part A covers your hospital and inpatient expenses. Part B covers your doctor and outpatient expenses.
While Part A and Part B alone cover many health care expenses, they do not cover everything. The 2 paths of Medicare were designed to cover the large gaps beneficiaries are responsible for under Original Medicare. The 2 paths are:
- Original Medicare + Medicare Supplement
- Medicare Advantage
While both of these paths have pros and cons, if used correctly, both paths make sure you are not left with tens of thousands of dollars in bills every year.
The 2 Paths of Medicare: Original Medicare + Medicare Supplement
Original Medicare is made up of Part A and Part B. When on the Original Medicare path, you are receiving your coverage from the government.
Like we mentioned, Original Medicare alone is going to leave you with a lot of coverage gaps. Original Medicare leaves you with a 20% uncapped coinsurance. This is where a Medicare Supplement comes in; a Medicare Supplement is designed to cover these gaps completely.
What are the pros of Original Medicare + Medicare Supplement?
- You can go to any doctor or hospital across the United States that accepts Medicare.
- Depending on the Supplement plan you choose, you have almost no copays or coinsurance. Most people on a Medicare Supplement go to the doctor and pay nothing.
- You can switch your Medicare Supplement at any time during the year, not just during the Medicare Annual Enrollment Period in the fall every year.
- You get to pick your Part D plan separately so you can guarantee it will cover your prescriptions.
What are the cons of Original Medicare + Medicare Supplement?
- Medicare Supplements have a higher monthly premium, around $100 – $200 per month in most of the country. In some states, such as New York and Floria, Supplements are typically priced in the $300+ range.
- With a Medicare Supplement, you have to purchase a separate Part D Drug plan. This will be an additional cost on top of paying for the Supplement. You also have to purchase separate dental and vision coverage if needed.
The 2 Paths of Medicare: Medicare Advantage (Part C)
Medicare Advantage plans are an alternative to Original Medicare where you opt to receive your Medicare coverage (Part A & Part B) from a private insurance company instead of the government. Your Medicare Advantage plan replaces your Original Medicare coverage.
Medicare Advantage is also referred to as Part C. Like a Medicare Supplement, Medicare Advantage plans are designed to cover the gaps in Original Medicare.
What are the pros of Medicare Advantage?
- Medicare Advantage plans are affordable. Many have low or even no monthly premium.
- Medicare Advantage plans include drug coverage; you do not have to purchase a separate Part D plan.
- Many Medicare Advantage plans include extra benefits. Benefits such as dental coverage, vision coverage, hearing coverage, health wellness programs, and more are regularly included with many Medicare Advantage plans.
What are the cons of Medicare Advantage?
- Medicare Advantage plans have networks. You have to go to their doctors and their hospitals to receive care.
- You do not get to choose a drug plan, it is just going to come with the Medicare Advantage plan you choose.
- You can only change Medicare Advantage plans during the Medicare Annual Enrollment period every fall.
Should I go with Medicare Advantage or a Medicare Supplement?
You cannot mix and match the 2 paths of Medicare, it is either one or the other. The path you choose is highly dependent on your individual situation at the time.
For example, we had some adult children of a client come to us wondering why their dad was paying so much for a Medicare Supplement. He was in a nursing home, and since he had not been able to change his Supplement for many years, they were paying about $250/month.
We talked it over with them, and since their father had no plans of traveling or moving, we switched his coverage to a Medicare Advantage plan. We found a plan that included all the doctors and hospitals in his area in the plans network, and were able to save the family $200/month in premium.
We had another client come to us after her Medicare Supplement price increased a little. We were talking and she let us know she was recently diagnosed with cancer. She needed to be able to go to research hospitals so that she could see the best doctors for her particular illness.
For this reason, we kept her on her Medicare Supplement. Even though it costs a little more than an Advantage plan, it allows her to go to any doctor and hospital she wants, even research hospitals across the country.
Both the 2 paths of Medicare provide excellent coverage. The one that will best work for you is highly dependent on your circumstances and needs.
This is why we so highly recommend working with a Medicare expert who specializes and sells both Medicare Supplements and Medicare Advantage plans for multiple companies. They will be able to talk to you, understand your needs, and recommend the path of Medicare that will fit your situation.
At Cardinal, we walk people through these 2 paths everyday. If you want assistance deciding which type of Medicare coverage might work better for you, give us a call or fill out the form below!