Should You Enroll In Medigap or Medicare Advantage?

Slide4A reader in IL asked this question earlier this week.  I thought it was appropriate.  Below you will find her question and my answer.

I turned 65 in Oct.2013 should I become enrolled in Medigap or Medicare

That is an excellent question.  Both programs have good and bad points.  You are going to have to make a decision.


On the positive side of the ledger, Medigap is “Guaranteed Issue.”  That means that the benefits can never be changed as long as you pay the premiums.  The coverage that you get at age 65 will be the same at age 85.  However, the premiums can be increased over the years.  It can be relatively expensive, but not as expensive as your health insurance was when you were 64.

The other thing is that with Medigap, you preserve your freedom to go to any doctor in the U.S. who accepts Medicare.

That means that if you are out west enjoying the Grand Canyon and Las Vegas, you do not have to fly back to IL just because you caught strep-throat and need a prescription.  With Medigap and original Medicare, you can go to a doctor out west and not have to worry that you are not covered.

Just remember that if you elect to get a Medigap plan, they do not cover prescriptions.  You also will need to get a Medicare D (PCP).


Medicare Advantage plans are normally inexpensive.  Many have no premiums due, other than what you pay Medicare for Medicare B.   However, those contracts are annually renewable with Medicare.  That means that both the premiums and benefits can change from year to year.  If you elect Medicare Advantage, you will need to pay close attention to a letter you get each September that will let you know about any changes in your plan for the following year.  If your plan makes changes that are unacceptable, you will need to change plans during Medicare’s 6 week Annual Election Period.

Also, if you do much travel, pay close attention to your plan.  It is probably more restrictive than you like.  Most Medicare Advantage plans are HMO style plans.  You are only covered for non-emergency treatment if you use a provider that is within the plan’s network.  If you use a doctor or hospital for non-emergency health care, it is likely that your insurance company will not pay you anything.

If you elect Medicare Advantage, I recommend that you choose a plan that is a PPO.  That way you still have some protection if you make a mistake.  A PPO also has a network.  The difference is that if you use a provider that is not in the network, your insurance company will still reimburse you something.  Your reimbursement will not be as good as if you used a network provider, but it will be a whole lot more than if you were covered by an HMO and got nothing.

PPO plans are typically a little more expensive than HMO plans, but, in my opinion, are worth the extra money.