Medicare Insurance Quote

Difference Between Medicare Advantage and Medicare Supplement

Written by Carl Snyder

Shopping for a medicare insurance plan can be a frustrating process if you go about it the wrong way.  From the beginning you’ll be tempted to listen to what your neighbor has to say.  You’ll get bombarded by insurance agents who all seem to have a different recommendation.  You’ll get shiny brochures in the mail with pictures of seniors smiling with their families.  Pouring over the details of all of the copayments and the premiums and HMO’s and star rating’s and . . . AHHHHH!  You’ll end up buried in details that muddle together.  Your head will be spinning in no time and you’ll be ready to call it quits.  In order to save yourself from all of this start your search by first answering the eternal question.  What’s the difference between medicare advantage and medicare supplement?

Medicare Advantage Plans

Medicare Advantage Plans otherwise known as MAPD’s are private insurance plans that replace the benefits that Original Medicare would offer and includes coverage for doctor bills, hospital bills, and usually prescription drugs.  These health plans all abide by and are regulated by Medicare part C meaning they have specific health insurance benchmarks that they need to meet including a requirement to provide coverage at least as good as what medicare offers.  The portion of medicare that governs the plans is Medicare Part C (not to be confused with plan C, I’ll explain later).  Among the hallmark characteristics of the advantage plans are that they all have some form of a doctor network, and that you’ll pay for medical services in the form of copayments as you use them.  Which advantage plans you have access to depend on what county you live in so if you move to a different county you’ll need to update your plan by speaking with a licensed insurance agent.  Generally, MAPD’s are a much lower costing option that is a good choice for someone healthy that is looking to save money.

MAPD’s are built on convenience and savings.  The convenience of having one card and one plan for all you need medically.  With one card, you can visit your doctor’s office, the hospital, your local pharmacy, and any ancillary benefits included with your plan.  While you do need to keep your Original Medicare ID card it’s not necessary to have it with you and it’s best left at home with sensitive documents.  The ancillary benefits that come with the plan are unique to each one and are benefits you can’t get with medicare or a supplement. These benefits can include dental, vision, gym memberships, hearing, over the counter medication allowance, transportation and a number of others.  The savings with an MAPD come from notoriously low monthly premiums which can often time be as low as $0.  If you’re relatively healthy and not visiting the doctor very frequently then you don’t have to worry about revisiting your expenses at the end of the year and asking yourself why you spent so much money on a plan that just isn’t  being used.  

 Similar to having Original Medicare alone, your monthly expenses with an MAPD can be little to nothing but the MAPD’s have a built in safety measure that Original Medicare does not called a Maximum Annual Out of Pocket, or MOOP.  This is one of the most misunderstood features of the plans and often will be confused with a deductible when it’s anything but that.  Just like it sounds, the MOOP is the maximum you can spend in a single calendar year before the plan will step in to pay all of your expenses fully.  This feature alone is the single best reason to choose an advantage plan over Original Medicare; it’s pure protection.  

 Another characteristic of the MAPD’s is the doctor networks they’re associated with.  It’s important to note that virtually all major medical plans have doctor network’s so the plans that you’ve been using your entire life already include these parameters.  HMO plans require you to see providers that are within their network and are typically the most cost effective.  Furthermore the HMO’s typically will require you to have a referral from your primary care provider in order to see a specialist.  PPO plans are more flexible allowing you to see doctors outside of the network they have but at a higher cost.  No referrals are necessary with these but be careful to figure out if a specialist is in network with your plan or if they accept the insurance out of network.  HMO-POS plans are a hybrid of the previous two mentioned where often times referrals are still needed but you do have the flexibility of going out of network for specific reasons.  PFFS plans are more popular in rural areas due to their lack of a network in most situations but doctors and hospitals have the choice of accepting or not accepting the plans on a case by case basis even if you’ve used the plan with them previously or not.

Supplement Plans

Supplement plans otherwise known as Medigap plans are insurance policies offered by private insurance companies designed to pay the out of pocket expenses that Medicare parts A and B do not.  They are a supplement to Original Medicare which means that you’ll have access to see any doctor, hospital or clinic in the nation that takes Original Medicare.  This is a unique quality whereby this insurance has no network of doctors at all.  The other notable characteristic that stands out with all supplement plans that the plans themselves are not written by the insurance carrier at all.  They’re written by Medicare.  This is an important distinction for a few reasons.  The first is that because the coverage is written and designed by medicare the insurance carriers have no authority or ability to make any changes to the plans at all.  It also means that there is no room for negotiation, denial of payment partial or full.  The second is that because all of the plans are identical, doing an apples to apples comparison becomes very easy.  If you choose a supplement plan you’ll need to select a stand alone prescription drug plan as well through Medicare Part D as the supplements will only pay out of pocket expenses associated with Medicare Parts A and B.

There are a total of ten different plans all designated with a single letter of the alphabet for identification.  All of the plans are put together in a very easy to understand chart found in your Medicare and You guidebook.  Since all of the plans themselves are identical with every insurance carrier, finding plan you like at the right cost is the key and the costs will vary by a number of factors including gender, the state you live in, age, tobacco usage and a number of others.  Your insurance broker can assist with choosing a good plan at the right price.  

When you’ve taken medicare part B for the first time you have a full 6 month window of time to choose any supplement plan you want from any carrier no questions asked. Once that initial period ends however, in most cases you’ll be subjected to medical underwriting in order to qualify for a supplement plan which means if you have certain pre-existing conditions you could potentially be denied coverage on a policy.  If you have an existing medical condition that has you visiting your doctor frequently it is strongly recommended you consider a supplement plan due to it’s superior coverage and limited availability.

Which is Best?

Now that you’ve got a good understanding of the two options at hand how do you decide which of these two options are best for you?  The disappointing answer is that there isn’t a universal “best” option.  It really depends on a number of factors including your budget, your tolerance for risk, your health, and your concern for doctor selection.

Doctor Selection:

This is a big one.  If you’re considering an MAPD as your primary insurance one of the first things you’ll want to look into is whether your doctors will accept the plan.  Don’t assume that just because a doctor at a specific clinic or hospital accepts your plan doesn’t mean all others will as well.  If you travel or have homes in multiple states there are plenty of plans out there that give you the flexibility to switch your network to follow you as long as you notify them.  If you’re not super picky about your doctors then an MAPD might be just right for you.

Risk Tolerance:

Your tolerance for dealing with medical costs varying from month to month is a good thing to consider when choosing your plan.  Do you like to have a set number to count on for cost from month to month?  If so a supplement plan will accomplish that very well as it is a virtually risk free option giving you the same monthly premium every month in good health and in bad.  If you’re fine with handling some inflated costs during months that medical treatment or hospitalization is needed then you might be better suited for an MAPD.


Have you considered what your monthly expense budget will be for a plan?  Budgeting for a supplement is much much easier as the premium for your supplement and prescription plan are the same from month to month.  Budgeting for the MAPD can be a bit more difficult as the monthly premium is usually low to nothing but keep in mind that you will need to use your insurance at some point so try keep something set aside for eventualities.  If you’re looking to save as much as possible then an MAPD might be just what you’re looking for.

Your Health:

Take an honest look at your health and how much medical care you anticipate needing here in the near future and this just may be the answer to the question of what type of insurance to take.  If you’re healthy and very infrequently visit your doctor an MAPD would be an inexpensive option to consider since you’re only paying for services that you use.  If you’ve got health concerns, anticipate surgery or some type of expensive treatments in the near or distant future there is no substitute for the coverage that a supplement will offer.


If total freedom and control over your doctor selection is what you’re looking for there really is no substitute for a supplement plan.  No matter where in the states you go, no matter what insurance company you’ve got or which plan you’ll have access to see any doctor, clinic or hospital without question.  If you move your primary residence from one state to another you can keep your plan.  If you’ve been frustrated in the past with a plan that restricted what doctors you were allowed to see then a supplement plan is right for you.

Questions?  Comments?  Complaints?  Comment below and I’ll gladly respond.

About the author
About the author

Carl Snyder is a licensed insurance agent that specializes in life insurance and medicare insurance options.  He is also a husband, a father, a fisherman of sticks, a runner, a world class donut eating champion, and a fan of all things practical.

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