Medicare Advantage plans combine the components of Original Medicare — Part A and Part B — into a single plan, while Medicare supplements help pay for costs that Medicare doesn’t cover. Seniors looking for lower costs or better coverage may want to explore their Medicare Advantage options. For seniors who already have Original Medicare, a supplement is a good way to reduce out-of-pocket costs.
Original Medicare separates inpatient and outpatient coverage into Part A and Part B. Part A covers inpatient services, such as hospital stays, temporary stays in skilled nursing facilities and home health care, while Part B covers outpatient services, such as wellness visits, diagnostic tests and preventive health care. A Medicare Advantage plan combines inpatient and outpatient coverage into a single plan.
Some Medicare Advantage plans have $0 premiums, which means a Medicare Advantage plan may help seniors save money every month. Medicare Advantage plans may also have lower co-payments or coinsurance requirements than Original Medicare, which can reduce a senior’s out-of-pocket medical costs. Finally, many Medicare Advantage plans have annual out-of-pocket maximums, which limit a senior’s out-of-pocket expenses. Original Medicare doesn’t have an annual maximum, which may make services received under a Medicare Advantage plan more affordable.Another advantage of choosing a Medicare Advantage plan over Original Medicare is that some plans include vision and dental coverage. Original Medicare doesn’t cover routine dental care or eye exams for the purpose of getting glasses or contact lenses, so purchasing a Medicare Advantage plan may reduce a senior’s out-of-pocket costs by covering some of these services.
Medicare supplements are ideal for seniors who have Original Medicare and need help paying some of their out-of-pocket costs. Known as Medigap insurance, a Medicare supplement covers things like co-payments, coinsurance payments and deductibles. It may also cover services that Original Medicare doesn’t cover. A Medicare supplement isn’t a replacement for Original Medicare or a Medicare Advantage plan; it simply supplements the coverage provided by Original Medicare.Medicare supplements are only available to seniors enrolled in Original Medicare. Seniors with Medicare Advantage plans may not purchase any Medicare supplements. Seniors may want to keep in mind that Medicare supplements sold after January 1, 2006, can’t include prescription coverage. Seniors in need of drug coverage may want to look into purchasing Medicare Part D, a type of Medicare that provides coverage for prescription medications.