Did you know you need more than just Medicare A & B coverage? That’s right. Without additional insurance coverage, you’re putting yourself in a very risky position. Now when it comes to your options there are only two choices, Supplemental plans and Advantage plans. 

Today, we’re going to talk about these two additional insurance products. We’ll briefly explain their similarities, and then address the six key differences between them so you are better prepared to choose which plan is right for you. 

How Supplemental & Advantage Plans are Similar 

Before we dive into the six key differences between Supplemental and Advantage plans, let’s first uncover what these plans have in common. The one key similarity is this: to have a Supplemental or Advantage plan, you must first be enrolled in Medicare A & B. However, this is where their similarities end. 

How Supplemental & Advantage Plans are Different 

Now let’s dive into the six key differences between Supplemental and Advantage plans. 

#1 Out-of-Pocket

The first difference is your out-of-pocket costs. If you take a Supplemental plan, you pay premiums. Your premium will vary slightly depending on your age, your gender, and where you live, but it’s usually within the ballpark of $100 to $125 per month. In addition to paying your premium, you may also have a small deductible, however, all your expenses for inpatient or outpatient services will be covered by that Supplemental plan. So besides your premium (and possibly a deductible), all other responsibilities and costs are transferred to the insurance company.  

If you choose an Advantage plan, however, you’ll have to pay copays. So instead of paying that monthly premium and letting the insurance cover the rest, you’ll be responsible for a certain amount of co-pays out of your own pocket. If you see a specialist, go to the hospital, or have a test or procedure, you will have to pay a copay. You’ll be required to pay those co-pays until you hit a certain max out-of-pocket amount for the year. 

In short, Supplemental plans are premium-based (you pay a fixed amount each month), while Advantage plans are pay-as-you-go with copays.

#2 Networks

The second difference between Supplemental and Advantage plans is the network process. Supplemental plans operate on an open-access system. This means if you’re on a Supplemental plan (it doesn’t matter which one), you can go to any doctor or health care provider who takes Medicare. As long as they accept Medicare, they’ll never turn you down. 

Advantage plans operate under the network system. If you have an Advantage plan, you will have a specific network of doctors and hospitals that you can visit. Sometimes you can go out-of network but that will usually come at a higher cost to you.

#3 Pre-Certifications

The third difference between Supplemental and Advantage plans is the pre-certification process. When you’re on a Supplemental plan, your doctor has the final say on whether or not you need a treatment or procedure. If your doctor wants you to have an MRI or CT scan, then you can get that procedure or test done, and Medicare will pay; no approval is needed. 

However, with Advantage plans, your doctor has to run procedures and tests through Medicare first to get approved. This is called the pre-certification process, and 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 an Advantage plan the surgery had to go through the pre-certification process. The insurance company told her to first go to therapy for nine months. Afterwards, if she still was in need of a hip replacement then they would cover it. This is a perfect example of how the pre-certification process determines the procedures and tests approved for you.

#4 Perks

The next difference between the two types of plans is perks. Most Supplemental plans do not include things like dental plans, vision plans, or gym memberships. A few companies sometimes add these perks to their Supplemental plans, but by and large, if you want to have these extra things covered, you’ll have to pay a separate cost for them. 

On the other hand, Advantage plans always include perks like dental, vision, and gym memberships. Now the coverage is often limited under these plans, but they still offer some benefits. So if perks like a gym membership or dental are important to you, you may consider an Advantage plan. 

#5 Rx Plan

The fifth difference between Supplemental and Advantage plans is prescription drug coverage. Supplemental plans do not include drug plans. They are always separate. So if you get a Supplemental plan, you’ll have to get a separate drug plan. 

Now, this is a good thing because if you have a separate drug plan, you get to choose from typically 20 to 30 drug plans in any given zip code. This means with a Supplemental plan, you have the freedom to pick from lots of different drug plans to decide which one is best for you based on the medications you take. Typically, a separate Rx plan’s monthly premium will cost anywhere from $13 to $30. 

If you’re on an Advantage plan, your prescription drug plan will be included. Some of these plans are very good while others are mediocre at best. Unfortunately, you can’t pick and choose your Rx plan when you take an Advantage plan. Instead, you’re stuck with whatever plan comes with your chosen coverage, so it can be either good or bad depending on which one you end up with. 

#6 Switching

Finally, Supplemental and Advantage plans differ in their switching procedures. Let’s suppose you’re on a Supplemental plan, but you want to switch to an Advantage plan during Medicare’s open enrollment period (between October 15th and December 7th).

There’s only one health question you have to answer to make that switch from Supplemental to Advantage. The question is, “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 a Supplemental plan to an Advantage plan. (Honestly, you wouldn’t want to switch your plan if you did have end-stage renal disease since it’s very costly care and you’d be paying more out-of-pocket.) So that’s the one question you’re asked and if you say “no,” you’re free to switch over to an Advantage plan. 

Now, if you are on an Advantage plan for more than one year and want to switch over to a Supplemental plan, you’ll have to go through an underwriting process. This means you’ll be required to answer a series of around 25 health questions. The underwriter will also have to know which prescription drugs you’re on and get a statement from your doctor. While you don’t have to be in perfect health to get approved, if something serious is going on with your health, the provider won’t approve you for the switch. 

Six Key Differences Between Supplemental & Advantage Plans

So we’ve learned there are six key differences between Supplemental and Advantage plans, ranging from different perks and Rx options to distinct pre-certification and switching processes. Hopefully, now that you understand these differences, you can better decide which plan type is best for you.

We understand how difficult making the right Medicare decisions can be.  To take the next step, click here to watch our full course or schedule a free one-on-one call with a certified Medicare School Guide who can answer your questions, compare plans options, and even help you enroll. Click here to schedule an appointment.

 

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