Medicare Supplement vs Medicare Advantage Plans
When selecting a Medicare plan you have two choices: Supplement or Advantage
Medicare Supplements are designed to supplement Original Medicare and to help pay for things that aren’t covered. Original Medicare has Part A (hospital insurance) and Part B (medical insurance). Medigap, or Medicare Supplements are added on to that, as a supplemental plan, much like a prescription drug plan. Original Medicare is administered by the government, instead of a private company. We pay our premiums to the government and they pay the claims from hospitals, doctors, and other providers. With Original Medicare, the government acts as the insurance company. As such, they pay the claims submitted by the doctors and other healthcare providers.The doctors submit the bills directly to Medicare.
HMOs and PPOs get flat rate fees from the government to administer Medicare so you can pick whichever supplement you want. According to Medicare Supplement Specialist John Shinn, “most people choose Medicare Supplement because there are no network restrictions, meaning you can go to any doctor and any hospital. Medicare Advantage is all network cost containment.”
Medicare Advantage is made up of private insurance companies that administer Medicare. Medicare has outsourced the whole process to Medicare Advantage.