Q. Is Medicare Advantage the same as Medigap?
A. This is probably the most common question I get from people about Medicare. And it's especially common now, with Medicare open enrollment starting today and running through December 7. The answer: No. They are in no way, shape, or form the same thing, and confusing them can in some circumstances lead to tears.
Medigap plans, also called Medicare supplements, are a way for you to fill in some of the holes in Medicare Part A (hospitals) and Medicare Part B (doctors and other outpatient treatments). Those two together are often called "Original Medicare." In Original Medicare, your medical providers send bills for your care to the government, and the government pays, minus deductibles and coinsurance that you're responsible for paying out of your own pocket. Medigap plans cover all or most of those out-of-pocket costs, which can be substantial if you need a lot of health care. You can sign up for Medigap plans when you first enroll in Medicare. Here's our advice on how to find and price a Medigap plan.
Medicare Advantage plans are simply a different way for you to get your Medicare Part A and B benefits. Instead of getting them directly through Medicare, you get them instead through private insurance companies. You'll have a private insurance card, your providers will bill the insurance company, not Medicare, and if you owe anything out of pocket, the bill will come from the insurance company, not Medicare. To find a Medicare Advantage plan, use Medicare.gov's Medicare Plan Finder. Also check the rankings of Medicare Advantage plans from the National Committee for Quality Assurance (NCQA) on our website. Note that if you have Medicare Advantage you can not buy a Medigap plan to cover out-of-pocket expenses. In fact, if you have a Medicare Advantage plan, it is against the law for an insurance company to sell you a Medigap plan.
Health reform countdown: We are doing an article a day on the new health care law until Jan. 1, 2014, when it takes full effect. (Read the previous posts in the series.) To get health insurance advice tailored to your situation, use our Health Law Helper.
Here are some important things to know about Medicare Advantage vs. Medigap.
Enrollment: You can switch Medicare Advantage plans every year at open enrollment. With Medigap, once you sign up for a plan upupon first joining Medicare, it can be hard to switch plans later because outside of when you first enroll, Medigap plans can turn you down or charge you extra if you have pre-existing conditions. (Note that this is not changing with the new health law, because the law does not apply to "supplemental" plans like Medigap.)
Premiums: Medicare Advantage plans charge the same premium to everyone. Medigap premiums can vary greatly depending on the age at which you bought the plan, how long you have had it, and the state of your health.
Providers: Medicare Advantage plans cover care only from providers in their networks. If you go to an out-of-network provider, you can get stuck with a big bill, like the reader who once sent me an indignant email demanding to know why Medicare had stopped covering cataract surgery. It hadn't, of course; the reader had made the very expensive mistake of not realizing she had a network-restricted Medicare Advantage plan. If you stay in Original Medicare, you can go to any provider that accepts Medicare (which is practically all of them), and your Medigap plan will automatically pay all or most of whatever original Medicare did not, depending on the specific type of Medigap plan you hae.
In the next few weeks we'll be discussing some of the ins and outs of Medicare Advantage and Medigap. Which you will never mix up again, right?
Got a question for our health insurance expert? Ask it here. It helps if you include the state you live in.
— Nancy Metcalf
Consumer Reports has no relationship with any advertisers or sponsors on this website. Copyright © 2007-2013 Consumers Union of U.S.