Medicare Supplements or Medicare Advantage?

Some people love the freedom to design their own network of health care providers; others are overwhelmed by too many choices and prefer to leave all the decisions to their trusted doctor. Medigap vs Medicare Supplements is your first decision to determine which group you fall under.

If you prefer a managed-care plan with its own network of providers, called an HMO or PPO, you can opt out of Original Medicare parts A and B and go with a Medicare Advantage plan (Part C). The most popular plans of this type include drug benefits (Part D), too. You still pay the Part B premium plus the Advantage premium, but all of your services are provided through your private insurer, which contracts with Medicare to obtain parts A and B benefits.

You will need to learn the rules for getting services; going outside of your HMO network will cost you out-of-pocket, and you will need referrals to see specialists. Choosing a preferred provider option, or PPO, will give you more flexibility; you can select some of your specialists, for instance, and some have a national network of providers if traveling out of your home area. Doctors can decide which Advantage plans they want to work with, and if your doctor leaves your plan, you will be assigned to another office. HMOs and PPOs have varying copayments so your out-of-pocket expenses could be hard to predict if your health changes.

If you prefer more predictable health care expenses, a Medigap plan to fill in the gaps in Medicare may work best for you. These plans, also called Medicare Supplements, are offered through private insurers and are in addition to the Medicare Part B premium. Medigap is only available to those who have Original Medicare and covers your deductibles, coinsurance and copayments to various extents, depending on the plan you choose. Plan F, for example, covers all of these 100 percent, including excess allowable physician charges.

Medigap allows you to choose your providers nationwide. This is helpful if you travel often or just like to have the option of seeing a particular doctor or use a particular facility. Your only consideration will be whether they take Medicare, because doctors who accept Medicare also accept Medigap.

The choice is yours. If you go with an Advantage plan, you can still change your mind later and switch to a Medicare Supplement plan.