The Simple Need to Know About Medicare And Medigap Insurance

Well, you came to visit our site for some simple answers to your basic Medicare and Medigap Insurance questions.  So as too not waste to much time, let’s get right down to it.

In this article, I will discuss some basics you need to know about Medicare and supplemental insurance.

Your Medicare Options

There a 4 parts of Medicare offered by the federal gov’t.  If you have worked at least 40 quarters or 10 years, you are eligible for all of them once you have reached “eligibility.”  The “Parts” are not comprehensive plans but features you may choose to elect together to create some financial protection from medical expenses.  Part A of Medicare, for example, is just your hospitalization only.  It does not cover any visits to your doctor or any outpatient care for that matter.  You would need Part B for that.  Again,  the “Parts” are Medicare features you may choose to pay for.

Option 1 – Original Medicare

Now, there are two major options that a Medicare recipient will have.  The first is Original Medicare which is government run and strictly regulated.  It offers Part A , Part B and also Part D.  Stated previously, Medicare Part A is for hospitalization.  Part B is for outpatient care such as a doctor’s appointment, physical therapy or other outpatient medical services.  Skipping to Part D of Medicare…this is for prescription drug coverage.  You are able to enroll for a custom coverage plan right on the Medicare website that best fits your needs under Part D.

You can verify Medicare benefits by looking at your red, white and blue Medicare card.  If you are currently in Medicare open enrollment, both parts A and B of Medicare are a requirement to have a Medigap insurance policy.

For most seniors on Original Medicare, we highly recommend enrolling in Part D of Medicare if you have not already.  Part D offers prescription drug coverage. Even if you are currently taking no medications, things can change quickly.  Prescription medication can be thousands of dollars a year, literally.  Protect yourself.  Here is the link to that information.  There are many prescription plan options available directly on the Medicare website.  You will be seeing which plans cover medications you are currently taking to maximize your dollar spent.  This is the absolute best resource to pick out coverage, period.  Everything available is right there.

Since you can change your plan annually, we suggest you complete this on the Medicare website if at all possible.  There you will discover a “plan finder” tool which will allow you to shop and purchase drug coverage on their website.  The Medicare “plan finder” tool allows you a lot of flexibility in selecting prescription coverage ideal for your needs.  Remember, Part D of Medicare is not required, but we recommend it to our clients who are on Original Medicare.  Prescription expenses can be outrageous on wipe out many, many seniors financially.

Option 2 – Medicare Advantage (Part C)

The second major option Medicare eligible folks have, is Medicare Advantage.  This is otherwise known as Part C.  The Medicare premiums you pay monthly are sent to a private company who manages your healthcare.  The number of providers that you can receive health care from depends on how restrictive the plan is.  Care is directed by the private company, not the providers.  All Medicare Advantage plans are required to offer the same basic benefits of Original Medicare. The insurance carriers must provide this as a minimum b

Medicare Supplements aka Medigap plans are not available if you elect Medicare Advantage (Part C) instead of Original Medicare.


You are no longer on Original Medicare at that point. 

Medicare Advantage can however offer some nice bells and whistles that Original Medicare does not.  For example, dental, vision, hearing…even a gym membership. 

Be aware, these bells and whistles vary from plan to plan.  Expect to have copayments for services and being responsible for up to 20% of some treatments such as Chemotherapy.

An important fact about Medicare Advantage…it is a private program. While CMS (Center for Medicare and Medicaid Services) have plenty of oversight rules in place, insurance companies offering the insurance plans are allowed to make various decisions on your health care and taylor health care plans to limit certain treatments or facilities you may receive care at.   

Tuck your red, white and blue Medicare card away in a safe place.  You will not need it as your coverage has been transferred to a private insurer.

What Should I Concern Myself With On a Medicare Advantage Plan (Medicare Part C)

If you live in a rural area be very careful about going down this path.  Make sure a good network of providers is available in your area prior to decision time.  Not all doctors and hospitals participate in Medicare Advantage networks.  You may end up extremely disappointed if your chosen providers are out of network.  You are responsible for all charges for non participating providers.

You may have rights if some of your providers are removed or leave the network. That is beyond the scope of this article and best left to a Medicare consultation with us.

Be sure you have not enrolled in Medicare Advantage (Part C) if you want traditional, Original Medicare coverage and a Medicare Supplement (Medigap Plan).  Medicare Advantage (Part C)  is not Original Medicare.  

Carefully consider your decision with electing the Medicare Advantage path. While some people with poor health may find it is truely the best option for them, we do not encourage seniors to elect Part C (Medicare Advantage) unless your financial means makes it your only option or you do have “deep pockets” with a solid rainy day fund in place.

Part C can look very, very appealing for some people as it is a low cost option.  Very nice on a fixed income, right?   We all like to save our hard earned money, don’t we?  Heck, some MA plans have no cost to the insurance company other than the Medicare premiums you pay each money out of your Social Security check.

Be aware of the potential for high out of pocket costs in a Medicare Advantage (MA) program. Understading OOP (Out of pocket) maximums in the various Medicare Advantage plans is very important. $10,000 in treatment for cancer treatment is common.  You would be responsible for 20% of that bill under most MA plans. What if the doctor needs to repeat the chemotherpy treatment again next year? Do you have a solid rainy day fund in place to cover the costs of chemotherapy?  Timing of treatments can easily become double just for rolling over into the next year.

Realize that behind the lower costs and amenities offered… there are limitations. Having dental, vision and hearing care which is not offered on Original Medicare is a nice perk. You must realize though, this option for you have for care is a private program. Since this is not Original Medicare, Medicare is not paying your health care claims. Always make sure your preferred doctor(s) is/are part of the Medicare Advantage plan you are considering before taking action.

Entering a Medicare Advantage plan is a 12 month contract though under some circumstances, you may disenroll.

Be it as it is, MA is a choice you may elect and change annually during AEP (annual election period) which is October 15-December 7 each.  This applies specifically to a move from any Medicare Advantage plan to another MA plan if you desire. If you currently have a MA or MA-PD (Medicare Advantage, prescription drug plan) you may also change between January 1 and March 31 of each year. This season is called OEP or Open Enrollment Period.

If you are planning on dropping Medicare Advantage and changing to Original Medicare, you may only do this between January 1 and February 14.  A separate Part D prescription drug may not be added outside AEP if you switch to Original Medicare. You will be required to wait until October 15 to enroll unless you meet certain criteria which is outside the scope of this article.

Medicare does not make any healthcare decisions in a Medicare Advantage plan.  Medicare Advantage is not a supplemental plan.  It is a health care option by itself.  MA plans essentially combines Parts A, B and in some cases, Part D of Medicare. The later is called MAPD.  Your premiums for those elected parts are paid to the private insurer running the MA plan you elect and typically deducted from your Social Security.

Since the potential for high out of pocket expenses is definitely there and care options are limited due to being in a network of providers, you may want to consider something that has stable and predictable costs each year.  Since Medicare is not determining the course of treatments you may be approved for, it is important to know the integrity and standards of the MA plan itself.

Original Medicare and Medigap Insurance: Taking Full Control of Your Healthcare

If you want maximum healthcare choices and have access to the vast majority of healthcare providers across the country, you should consider being enrolled in Original Medicare.  Similiar MA plans, Original Medicare, Parts A and B will cover 80% of all Medicare approved charges for your care. 

In addition, you may opt to purchase Medigap insurance (Medicare Supplement plan) from a private insurer that covers up to the remaining 20%.  You, your doctor and Medicare are now in the drivers seat versus a private company. There is no healthcare manager or referral required under original Medicare even if you purchase Medigap Insurance.  Balances of approved and paid claims by Medicare are electronically sent over to any purcharse Medigap plan (if you own one). The insurance company who issued the supplemental policy is fully responsible to pay the remainder according to the standardized benefits in the coverage.  Black and white and no grey areas. Medicare regulates the plans.

If you elect Original Medicare, be aware that you will not have dental, vision screenings or even hearing benefits as many Medicare Advantage plans offer. However, this could be solved by purchasing a dental, vision, hearing insurance (DVH) policy if you would like those holes “plugged” so to speak. Buying a separate, policy to cover this type of care is available to seniors.

If you reference the Medicare and You Guide Book, you will find all the Medigap insurance plans are standardized and strictly regulated by Medicare.  The different plan options are lettered “A” thru “N.”  Each plan has different benefits to “supplement” your Part A and Part B of Original Medicare.

Medicare Supplement Policies That Are Commonly Purchased

The three most popular Medicare Supplement plans have been the Plan F, Plan G and Plan N.  The benefits of these plans are beyond the scope of this article and but the subject of others on this site.  Here a some general points we stress with consumers… Plan F is the “top of the line plan.”  It pays ALL of the 20% balance of Medicare approved claims. As a side effect, you pay for having first dollar coverage. As of January 1, 2020, you must have been previously entitled to Medicare to be able to purchase Plan F. Plan G is the “best value” plan available and a great alternative to the Plan F.  Plan N is a more affordable Medigap insurance that makes sense to some seniors, though small co-payments for outpatient care visits are at the discretion of your provider. This co-payment maximum is strictly regulated by Medicare.

In the end, our clients want protection from paying out thousands of dollars for the financial impact of healthcare.  Original Medicare is the answer for a good number of people in the US.  This, when combined with a good Medigap Policy will protect you from serious healthcare claims down the road. No surprises or potential financial disaster of the wrong Medicare choice.

FYI here… No Medicare Supplement company or plan will pay anything unless Original Medicare first approves and pays it’s portion of your healthcare claim.  Medicare Supplements are linked to Original Medicare as the “decision maker.”  Medicare Supplements are regulated by the government.  You should also know that all companies must pay exactly the same according to the Medigap plan’s letter (F, G, K, N etc). This is unlike a Medicare Advantage plan.

In regards to Medicare Supplement Plans (Medigap Insurance)…If you refer to the Medicare and You guide, it clearly states that the price for identical plans can vary significantly from one insurer to the next.  Be aware of this.  Many seniors are grossly overcharged for their plan of choice.

Remember, these are not $0 dollar plans (Part C Medicare Advantage). You are getting maximum healthcare choice with Original Medicare. Supplemental insurance companies are not in control of treatments nor is there a network involved. This combination can greatly reduce or eliminate your healthcare out of pocket risk quite effectively while giving you access to the doctors, treatments and hospitals you choose.

Make sure you speak to a professional who can shop Medicare Supplement plans out for you to find the a good price on a stable carrier for the supplemental plan you desire.

Each standardized, Medicare created plan offered by private insurers is identical in payment assuming you compare plans in a apples to apples comparison.  Since all Medigap polices are labeled A-N, comparison from one company to the next is simple.  Days of apples to oranges comparison is gone. 

Comparable Medigap Insurance plans all have to pay the same.  They have to pay the same since they are regulated by Medicare and your state. What you need to know in terms of Medicare Supplement insurance is the letter of the plan (A-N), how much it costs and the companies financial strength.  Picking the right carrier will require an experienced professional who knows the insurance companies who keep their premiums competitive over time in your state. The sweet deal for year 1 may quickly fade in the near future. This is beyond the scope of this article. Contact a seasoned pro.

Original Medicare w/ Medigap Insurance vs Medicare Advantage – Short and Sweet

What the two choices boil down to is this…

Do you value the lowest cost for health coverage and some bonus perks (includes dental and vision etc)?  Can you accept that you will only have access to network providers as a general rule? Are you willing to accept the potential of high out of pocket costs for cancer treatment? Are you willing to be denied certain treatments because the private company managing the care denies your the recommended medical treatment?


Do you want access to the the top providers without all the network restrictions and worry if you could need cancer treatment at some point? Do you want the best care possible?

If you selected the first option to save potential upfront money, Part C or a Medicare Advantage plan is your best option.  Pairing it with a good cancer plan is recommended however.

Now, if you lean towards unrestricted access to providers across the country including the Mayo Clinic and the like, Original Medicare (Parts A & B) combined with Medigap Plans F, G, N or even High Deductible Plan F or G are really the way to go.  Pairing it with optional senior dental, vision and hearing insurance coverage makes this the best coverage combo.

If you want the best, option 2 is the ticket. Yes, this is clearly more expensive, but you are in control with your doctors instead of the other way around.

Medicare and Medigap Insurance Conclusion

Medicare Advantage (Part C) can be an effective, low cost alternative to traditional Medicare as long as you understand its limitations.  It is intended to be the most affordable option. 

Is it meant to be top of the line…probably not.  The potential for high out of pocket expenses exist in the vast majority of Medicare Advantage plans.  There are ways to plug some of the holes to reduce catastrophic expenses for you thru the purchase of non Medicare, health insurance policies. We frequently suggest a Cancer policy to protect Medicare Advantage policy owners from the high cost of chemo and other cancer medications. Again, this is outside the scope of this article. Please call to discuss this with us if you have questions or check with this page or the alternate resource page for some extra help.

With that said, MA plans do offer some nice bonus features. For many, some dental care, vision or hearing benefits are very useful. This is certainly of value if you utilized them. 

Understand that unpaid claims with Original Medicare are almost always related to charges Medicare did not approve. It could be a wrong billing code or that the Medigap plan purchased was not full featured.  The top Medigap plans are F, G, N and High Deductible plans F, G.

In 1992 Medicare “standardized” the Medicare Supplement plans insurers could offer. This eliminated comparision problems from one plan to the next. It allowed seniors to shop their desire plan strictly by the “plan letter.”  Older Medigap plans are history as they varied greatly and were tough to compare.  I saw many of them when I started my career in the late nineties.

Nowadays, Medigap insurance companies all pay claims by the official Medicare rule book just like clockwork.  Medigap, Medicare Supplement insurers are strictly regulated at a Federal and State level and linked to any Original Medicare payments, electronically.

If you are turning 65 and are in open enrollment, no insurer can ask you any health questions.  They must accept you regardless of any health condition you may have.  This is the case on any Medicare Supplement plan you choose. 

If you have a medical condition that may prohibit you from changing in the future, it is very important to make a good decision now.   You see, the key to changing in the future is dependent on being able to qualify based on your health.  It may be your only opportunity to lock your benefits in.

Be aware, an insurance company with a recognizable name does not necessarily make them a good choice for you.  In fact, I have seen some of the largest rate increases come from some of the big name insurers.  Then again, some small, new to the Medicare insurance market carriers can and do have the same history. 

Big name rules definitely apply to Medicare Advantage insurers as well…the name does not matter at all.  Find the best plan in your area you can afford and ask people you know who may have had serious medical care under that plan.  What was their experience with their MA plan?  Did they feel the healthcare was great or was it compromised in some way?  This is my best piece of advice.  Medicare Advantage is a bit of a grey area you must accept that if you are electing it. Are you going to have access to the best treatments available on it?

Last tip here… make sure you have an independent specialist to help you out.  An agent who has been around the block that works in senior benefits can advise you on all the best Medigap insurance options to look at.  What is good for you now may not be so good 2 or 3 years later.  Takes time being in the business to see how to best serve your clientele in the long run and we take this very seriously.

Designing a health insurance strategy to optimize your care and protect your finances is important. Getting the help of a seasoned, independent agent is free to you. They are paid by the insurance company that issues any coverage on you purchase.  Reach out and get a healthcare advocate for yourself.  Medicare can be overwhelming for a lot of people.

If you have further questions, feel free to look around the website, drop us an email or simply give us a call.  We’re always here to help.  Glad to do it. 269-244-3420.