Medicare Advantage Plans or Medigap Plans – The New Choice for Retirees

Medigap Insurance, often referred to as the Medicare Supplement Plans, underwent significant changes on June 1, 2010. Medigap, which provides health insurance to cover deductibles and co-insurances Medicare beneficiaries are required to pay for access to health services, had a major transformation. Several plans have been canceled and new ones added.

Medigap plans E, H, I and J were eliminated. These were termed “Preventive Care Benefits” and “Home Recovery Benefit” plans. The new additions are the M and N plans, though it is not certain that all companies will offer the new ones. However, all new Medigap plans have added hospice care.

The new N Plan has similar benefits to Plan D, except there is a $ 20 medical fee and $ 50 additional emergency call. These co-pays are valid after the deductible of $ 155 has been paid. The new plan M also offers benefits similar to plan D, but only covers 50% of the excess part and none of the part B deductible. The cost of Plan N is approximately 70% of the cost of Plan F. And the cost of Plan M is approximately 85% of F. In total, the number of Medigap plans has been reduced from 12 to 10 plans.

While Medigap is an addition offered by private insurance companies to fill in the gaps in initial Medicare Part A and Part B, Medicare Advantage are offered by a private company with government contracts to implement your Medicare benefits. You must continue to maintain Part A and Part B and continue to pay the Part B premium if you choose a Medicare Advantage Plan.

The changes affecting the 2019 AARP Medicare Advantage plans,  including reduced fees and mandatory loss ratios, will offer fewer benefits to Medicare Advantage members. As an example, you can pay less for a Medigap Plan than for a Medicare Advantage Plan if you choose Medigap Plan N. In addition, the Medigap Plan N has no network restrictions, restrictive enrollment deadlines and no hospital expenses, among other features. Note, however, that Medigap does not have a prescription requirement while there are Medicare Advantage plans. With a Medigap plan, you must purchase a separate Part D prescription coverage.

Before you make a decision, you need to explore your options in depth with an agent who can help you navigate this complicated insurance labyrinth.

Perhaps most importantly, two new plans, Medigap Plan M and Medigap Plan N have been added. These plans added some cost-sharing features to reduce plan premiums. Plan M will cover only 50% of the Part A deductible ($ 1,100 / year for 2010). It will also not cover the excess of Part B (that’s $ 155 / year for 2010). Finally, Plan M has no benefits for “Part B surpluses”.

Plan N, like Plan M, will not cover Part B Deductible; However, it covers the deductible part A completely. Plan N uses cost sharing (ie co-pay) to keep premium costs low. The plan N co-pays are $ 20 at the doctor’s office and $ 50 at the emergency room.

In other words, Plan A from one vendor must be exactly like Plan A from another vendor. Plan B from one vendor must be the same as plan B from another vendor, and so on.