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Medicare Supplement plans vs. Medicare Advantage plans – What’s the difference?


As you near your Medicare eligibility date, you’ll begin seeing and hearing a lot about Medicare plans on commercials, in the mail, and seemingly everywhere you turn. It can become overwhelming. To help provide clarity, our team has outlined standard Medicare plan types.

Medicare Supplement Plans

Medicare Supplement plans, also known as Medigap, are health insurance plans sold by private insurance companies. They’re designed to “fill in the gaps” that Original Medicare doesn’t cover, meaning that they help cover your portion of the costs for Medicare-approved services.

Supplement plans don’t have required provider networks, so you can see any doctor or specialist who accepts Medicare. You typically pay little to $0 in out-of-pocket expenses for covered medical services. However, on this plan type, you pay an additional monthly premium.

Since Original Medicare doesn’t cover prescription drugs, individuals with Supplement plans usually purchase a standalone Prescription Drug plan (PDP) to help cover the costs of their prescriptions.

Medicare Advantage Plans

Medicare Advantage (MA) and Medicare Advantage Prescription Drug (MAPD) plans are also sold by private insurance companies. While all plans include coverage for Medicare-approved services, these plans generally feature low to $0 monthly premiums and deductibles and have copay cost-sharing features. MA and MAPD plans have an annual cap on out-of-pocket expenses to help protect you from high medical expenses.

These plans typically cover:

  • Medical
  • Prescription drugs (MAPD plans only)
  • Dental, vision, and hearing
  • A range of additional benefits such as fitness memberships, grocery gift cards, over-the-counter allowances, and more

MA and MAPD plans can be classified into two different categories: health maintenance organization (HMO) and preferred provider organization (PPO). With an HMO plan, you are required to go to health care providers in the plan’s network unless it is an emergency. On the other hand, with a PPO plan, you can receive medical care from health care providers in or out of the plan’s network, so long as they are contracted with Medicare. However, you will pay less if you use in-network providers. Most MA and MAPD plans have very broad networks. If you choose one of these plans, our team can help you find a plan that covers your current providers.

Need help with Medicare?

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If you are currently a RetireMed client and have questions about Medicare or your plan, schedule a call with a client advisor.