If you are enrolled in Medicare Parts A and B only, you’re putting yourself in a risky position. Yet, in 2022, 3.2 million people enrolled in Medicare and no other coverage. While Medicare covers a variety of medical expenses, beneficiaries have to pay some sizable out-of-pocket costs. To minimize the financial burden, many people enroll in a Medicare Advantage or Supplemental plan.
Let’s discuss the differences between Medicare Advantage vs. Medicare Supplement so you can determine which plan is best for you.
How are Supplemental and Medicare Advantage Plans Similar?
Before diving into the differences between Medicare Advantage and Medicare Supplement plans, there is one key similarity. You must be signed up for Medicare Parts A and B before you can get an Advantage or Supplemental plan. But that’s the only thing they have in common.
Differences Between Medicare Advantage vs. Medicare Supplement
Now, let’s dive into the six key differences between Supplemental and Advantage plans.
1. Out-of-Pocket Costs
The first difference is your out-of-pocket costs. If you take a Medicare Supplemental plan, you pay a monthly premium. Your monthly premium will vary slightly depending on your age, your gender, and where you live, but it’s usually $100 to $300 per month. In addition to paying your premium, you may also have to pay the Medical Insurance deductible ($283 in 2026) before your inpatient and outpatient services will be covered by your Medicare Supplemental plan.
So, besides your premium (and possibly a deductible), the insurance company assumes all other responsibilities and costs.
However, if you choose a Medicare Advantage plan, you’ll have to pay copays instead of a monthly premium. If you see a specialist, go to the hospital, or have a test or procedure, you will have a copay. You’ll continue to pay copays until you hit your max out-of-pocket amount for the year.
In short, a Medicare Supplemental plan is premium-based, and in most cases, the insurance company is responsible for all responsibilities and costs except the Medical Insurance deductible. In contrast, a Medicare Advantage plan is pay-as-you-go with copays.
2. Provider Networks
The second difference between a Medicare Advantage plan and a Medicare Supplement plan is the provider networks. Supplemental plans are still part of the Medicare system, so your network is open-access. That means that any services you receive will be covered so long as the facility or provider you visit accepts Medicare.
On the other hand, Medicare Advantage plan networks are separate from Medicare and are instead created by the insurance carrier. That means your access to medical providers will be more limited in the network. In addition, Medicare Advantage plans are set up as HMO or PPO networks, which can also limit whether or not you can receive care from a physician outside your plan’s network except for urgently needed or emergently needed care. If you have a PPO Advantage plan, you can go out of network, but usually at a higher cost.
3. Pre-Certifications
Pre-certifications are another key difference between Medicare Advantage and Medicare Supplement plans. When you’re on a Medicare Supplement plan, your doctor has the final say on whether or not you need a treatment or procedure. So, if your doctor wants you to have an MRI or CT scan, that procedure will be covered by Medicare; no additional approval is needed.
However, with Medicare Advantage plans, your doctor has to follow a pre-certification process where any procedures your doctor wants done need to be approved first. Ultimately, the insurance provider has the final say in whether or not you can get the procedure done.
We recently had a client who needed hip replacement surgery. The doctor said she needed the surgery, but since she was on a Medicare Advantage plan, the surgery had to go through the pre-certification process. The insurance company told her she needed to undergo physical therapy for nine months. If she still needed a hip replacement after the physical therapy ended, then the plan would cover the procedure. This is a perfect example of how the pre-certification process determines the procedures and tests approved for you.
4. Plan Inclusions
Most Supplemental plans only provide medical and hospital coverage. Advantage plans may offer additional benefits that are not included in Original Medicare. Benefits vary by plan and location, and limitations may apply. Contact a licensed agent to learn more.
5. Prescription Drug Coverage Plans
The fifth difference between Medicare Advantage plans and Medicare Supplement plans is prescription drug coverage. Those with Supplemental plans need to purchase a Part D drug plan.
With a separate drug plan, you get to choose from about 20 to 30 drug plans in any given zip code. This variety gives you the freedom to pick from lots of different drug plans and decide which one is best for you based on the medications you take.
If you’re on a Medicare Advantage plan, your prescription drug plan might be included. If drug coverage is included, you can’t pick and choose your Rx plan when you take a Medicare Advantage plan.
6. How to Switch Plans
Finally, Supplemental and Medicare Advantage plans differ in their switching procedures. Suppose you’re on a Supplemental plan and want to switch to an Advantage plan during Medicare’s Annual Enrollment Period (between October 15th and December 7th). In that case, you’ll only have one question to answer: “Do you have end-stage renal disease (permanent kidney failure)?”
If you answer yes to that question, meaning you are either on dialysis or are waiting for a transplant, you cannot make the switch from an Advantage plan to a Supplement plan—and you wouldn’t want to since the care is very costly and would increase your out of pocket costs.
Conversely, if you’ve been on a Medicare Advantage plan for more than a year and want to switch to a Medicare Supplemental plan, you’ll have to go through an underwriting process. This means you’ll be required to answer about 25 health questions, submit a list of prescription drugs, and get a statement from your doctor. You don’t have to be perfectly healthy to be approved; if you have a serious health condition, the insurance company won’t approve the switch.
Which is Better: The Medicare Supplement Plan or The Medicare Advantage Plan?
Medicare Supplement plans offer more flexibility and coverage, allowing you to choose your own doctors and specialists without a referral. You also have the freedom to select a separate prescription drug plan. However, they typically come with higher monthly premiums.
Medicare Advantage plans may offer additional benefits that are not included in Original Medicare. Benefits vary by plan and location, and limitations may apply. Contact a licensed agent to learn more.
The best choice for you depends on your individual needs and your budget.
Find Additional Medicare Coverage with Medicare School
Are you struggling to determine whether a Medicare Advantage plan or Supplemental plan is right for you? One call to Medicare School is sure to clear up any confusion. Our team will listen to your situation and help you weigh your options. If you need one-on-one assistance, schedule an appointment with a licensed agent today!
Want to learn more about Medicare Advantage plans vs. Medicare Supplement plans? Watch our free Medicare workshop now.
FAQs
Are Medicare Supplemental and Medicare Advantage Plans Similar?
The only similarity between these two plans is that you must be enrolled in Medicare Parts A and B to qualify within the enrollment period.
What Are the Differences Between Medicare Advantage Plans vs. Medicare Supplement Plans?
Medicare Advantage and Medicare Supplement plans have multiple differences, including out-of-pocket costs, provider networks, pre-certifications, plan perks, prescription drug coverage, and plan switching.
Is Medicare Advantage or Medicare Supplement Better?
Determining which plan is better depends on your situation, medical needs, and budget. Medicare Advantage plans offer more comprehensive coverage and lower out-of-pocket costs but have medical provider network restrictions and require pre-certifications. Medicare Supplement plans offer more flexibility, allowing you to choose your own doctors, but they typically come with higher monthly premiums.
Do Medicare Advantage and Medicare Supplement Plans Include Dental and Vision Coverage?
Most Medicare Supplement plans do not include these perks and require separate purchases for such benefits. Medicare Advantage plans provide additional benefits not covered by Original Medicare. The specific benefits vary by plan and location.