Medicare Advantage or Traditional Plus Supplemental? Choose Wisely 

There’s no doubt about it: Evaluating Medicare’s alphabet soup of coverage options is challenging. There are Parts A, B and D to consider, plus the Advantage route and the opportunity to source supplemental coverage via Medigap plans, each with its own pricing and coverage dynamics to consider. It’s no wonder 75% of survey respondents said selecting coverage was a confusing and frustrating process, according to eHealth, an online health insurance marketplace. 

Despite the challenge, Medicare claiming must be part of the broader retirement planning process because of the significant impact healthcare costs can have on a client’s monthly cash flow, said Whitney Stidom, vice president of consumer enablement at the company. One key decision every retiree must make is whether to go with the all-in-one simplicity of Medicare Advantage or opt for the traditional Medicare route with a Medigap supplement. 

Both options have merit, Stidom told Retirement Upside, but the right coverage depends on individual factors such as the client’s health, anticipated medical needs, preferred care providers, travel habits, retirement income and comfort with unpredictable expenses. 

Advantage vs. Supplemental 

Medicare Advantage, also known as Part C, replaces Original Medicare through private insurers and bundles hospital, medical and (usually) drug coverage with extra perks like dental and vision. Medicare supplement, aka Medigap, works alongside Original Medicare to help cover out-of-pocket costs like copays and deductibles, offering total doctor freedom without networks. Clients cannot have both, so they should consider the following:  

• Medicare Advantage makes the most sense if they want low monthly upfront costs and bundled, everyday extras like dental and vision. 
• Traditional Medicare plus a supplemental Medigap plan makes sense if they prioritize absolute freedom to choose doctors and predictable healthcare spending without network restrictions.

In practice, Medicare supplement plans are often a superior choice, according to Stidom. “These plans work alongside Original Medicare and cover many of the deductibles, copayments and coinsurance costs beneficiaries would otherwise pay,” she explained. “Although clients generally pay a higher monthly premium than they might with Medicare Advantage, Medicare supplement coverage can make healthcare expenses more predictable.” 

Whatever route one chooses, enrollment timing is an important part of the decision. Clients generally receive a six-month Medicare supplement open enrollment period beginning when they are age 65 or older and enrolled in Medicare Part B. During this period, insurers generally cannot deny coverage or charge more based on the applicant’s health history. Afterward, Stidom warned, medical underwriting may apply, and some applicants could pay more or be denied coverage outright. 

Don’t Sleep on Advantage. Though preferred by many advised clients, a Medicare supplement is not the right choice for everyone. Medicare Advantage plans may offer lower premiums, for example, alongside bundled prescription drug coverage and additional benefits that Original Medicare does not cover. “Whether beneficiaries are enrolled in a Medicare Advantage, supplement or Part D plan, it is key to comparison-shop plan options every year, specifically during the Medicare annual enrollment period from Oct. 15 through Dec. 7,” Stidom said.