Seniors looking for health insurance are today faced with a dizzying array of choices. Just a few years ago most seniors would cover themselves with Medicare parts A and B and perhaps one of the 10 Medicare supplement options.
These plans can provide good coverage and are a good option for many seniors. But how do they compare with Medicare Advantage policies?
Medicare Advantage policies can be HMOs, PPOs or Private Fee for Service Plans. These plans are not all the same. The level of benefits offered by one plan can be very different from another plan.
The same is true of Medigap or Medicare Supplemental policies. No two are alike.
However, Medicare Advantage or Part C plans are fundamentally different from Medigap policies. People insured by these plans are no longer insured by the federal government. An insured, waives his or her right to Medicare in order to get one of these policies.
When you are insured by a Medicare Advantage policy, the federal government pays the insurance company for insuring you. Since the government is no longer on the hook for your next hospital stay, it will send the insurance company some of the money that you paid into Medicare over the years.
This means that many Medicare Advantage policies are very inexpensive when compared to the Medigap premiums one might expect to pay for similar coverage. Sometimes these policies are even free to the insured. The private insurers can often give you a much better deal than the government can for health insurance.
But there is a trade off. Although Medicare Advantage policies are excellent for many people, those who travel a lot and those who have a second home will likely be better served with a traditional Medicare and a Medicare Supplemental policy.
This is because you will probably find that getting non emergency medical treatment from a non-participating physician isn’t covered, or is covered poorly by most Medicare Advantage policies.
The most important difference between how medical expenses are covered by traditional Medicare Supplemental policies and Medicare Advantage policies is the way care is paid for when you use an out of network provider. If you travel or own a second home be for you buy anything be sure to ask pointed questions about how medical expenses are covered when you are out of your policy’s servicing area.