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Medicare Supplement Vs. Medicare Advantage Decision Guide

The #1 question most Colorado seniors ask is if they should get a Medicare Supplement or a Medicare Advantage plan.  Whether you are getting ready to turn 65, are retiring after age 65 or simply want to make sure you made the right choice, this decision guide will help you determine if a Medicare Supplement or Medicare Advantage plan is right for you.

3 Options, But Only 2 Good Ones 

  1. Original Medicare (Part’s A & B)
  2. Original Medicare (Part’s A & B) with a Medicare Supplement – aka Medigap plan
  3. Medicare Advantage – Also known as Medicare Part C

The first (and worst) option is to just have original Medicare Part’s A & B.  If you just have Original Medicare, you are responsible for 20% of the covered Part B expenses with no out of pocket maximum for Medicare Part B expenses. That means that if you have outpatient surgery that runs $70,000, you would owe 20% of $70,000 ($14,000) and continue to pay 20% of additional Part B expenses for the remainder of the year. Because costly treatments like chemotherapy fall under Medicare Part B,  if a person has a bad year health wise that can be a recipe for a financial disaster.  We would never advise having just Original Medicare, but if you did you would also want to get Part D prescription drug coverage or face a substantial penalty for late enrollment. Fortunately, there are $0/month premiums for Part D plans available in 2024.

Colorado Plan G Medigap plans

The second option eliminates almost all the financial risk of Original Medicare, while providing access to the greatest number of providers. A Medicare Supplement, sometimes referred to as a “Medigap” plan is layered on top of Medicare Part’s A & B.  Most commonly, Seniors will get a Plan G Medicare Supplement, as it has fairly comprehensive coverage and is priced attractively.

Simply put, the Medicare Plan G Supplement is a standardized plan that covers Part A and Part B services after the Medicare Part B deductible ($240, in 2024).  This coverage works with any provider who takes Original Medicare, which includes the vast majority of Specialists and Hospitals, not just in Colorado, but nationally.  The Plan G Medicare supplement gives you exceptionally low out of pocket costs for Part A and Part B services.  That same $70,000 claim in the previous example would be covered at 100%, after paying the annual Part B deductible ($240 in 2024).

Medicare Supplements are often considered the “gold standard” for Medicare coverage, as the plans work with any provider who takes Original Medicare nationally and the most popular Plan G Medicare Supplement limits your financial risk far better than Medicare Advantage plans.  Medicare Supplements  are surprisingly affordable, especially when you consider the incredible financial protection and provider access you get with a Medicare Supplement like Plan G.

Don’t forget to enroll in separate Part D prescription drug coverage or you will face a substantial penalty for late enrollment. Fortunately, there are $0/month premiums for Part D plans available in 2024, though the best plan will be determined solely by the medications that one is taking. More on that later.

Medicare Advantage plans in Colorado

The third option is Medicare Advantage. Medicare Advantage plans have a variety of network options, so it’s very important to make sure that your provider is in-network, that your prescriptions will be covered and that you understand how the plan will work when you travel outside the plan’s service area. Medicare Advantage plans may have $0 deductible or higher, but will have a variety of copays and coinsurance for many different services.   Medicare Advantage plans often, but not always, include an embedded Medicare Part D benefit and most carriers offer $0/month premiums for their most popular Medicare Advantage plans.

While popular Medicare Advantage plans often have $0/month premiums and may promote embedded dental, vision and hearing benefits, the plans’ out of pocket maximums are typically range from $3,500 to $8,850/year.  Medicare Advantage plans often limit access to providers, may require referrals and prior authorization for many procedures. That is how the plans stay profitable for the insurers.

If you choose a Medicare Advantage plan without a Part D benefit, you’ll want to get separate Part D coverage (premiums as low as $0/month in 2024) or face a steep late enrollment penalty.

Colorado Medicare Supplements Plan G and Medicare Advantage plans

The Final Part of the Medicare Puzzle: Medicare Part D – You absolutely want to get Part D prescription drug coverage.  In 2024, there are $0/month Part D insurance policies, so there is no reason to not get a Part D plan, even if you don’t take any prescription medications.  If you get a Plan G Medicare Supplement, have a Medicare Advantage plan without Part D benefits or have just Original Medicare, you need to get a Part D prescription drug plan or the government can and will charge you a late enrollment penalty – for the rest of your life.

The best resource to find the right Part D plan is at Medicare.gov, using their Part D Plan Finder tool. That is something you’ll want to shop each year during open enrollment, as your medications may change and the plans themselves may change from one year to the next.  It pays to be a smart consumer and shop for the right Part D plan each year during open enrollment.

Still awake and want to learn more? Good for you.  Read the Wall Street Journal Special Report: Big Mistakes People Make In Medicare – And How To Avoid Them

Questions? Give us a call at (303) 456-7967 or toll free at (800) 416-4481. We’re glad to help!  Or fill out a Personalized Medicare Quote Request and we’ll be happy to explain all the options and send your a quote for you to review at your convenience.

* Best Price Guarantee:  Because health insurance rates are filed with and regulated by the Colorado Division of Insurance, you won’t find the plans we sell offered for less anywhere else. If you buy from Colorado Health Insurance Brokers, another agent or directly from the health insurance company, you’ll pay the same monthly premium for the same plan.