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MediGap Vs MA Plans





Medicare Supplement Plans (MS)
Medicare Advantage Plans (MA)

  1. MA plans generally have lower premiums than MS plans.
  2. MA plan premiums are not age rated (the insured pays the same premium whether age 65 or 95).
  3. Some MA plans include a Medicare Prescription Drug Plan.  However, if a Medicare PDP is included, that portion of the plan has co-pays and deductibles separate from medical expense co-pays and deductibles and has the same "doughnut hole" or "gap" as stand alone PDP plans.
  4. MA plans are medical plans offered by private insurance companies that operate in place of Original Medicare Parts A & B.  The beneficiary does not lose Original Medicare Parts A & B, but so long as enrolled in an MA plan, claims will only be received, reviewed and paid, if approved by the plan, by the MA plan insurance company. Any claims sent to Medicare will be rejected without review.
  5. Some MA plans have no maximum annual out-of-pocket limits.  The beneficiary is liable for plan co-pays and deductibles without annual limits.
  6. Some MA plans require that the beneficiary obtain all services from contracted providers except bona fide emergency care.
  7. MS are not medical plans but plans that supplement Original Medicare Parts A & B.  Medicare regulations specify plan design details and require that MS be labeled A through L.
  8. In general, MS beneficiaries pay higher premiums that are age banded and must purchase a separate Medicare PDP plan but enjoy lower or no co-pays and deductibles for medical expenses and have PDP expenses that are similar if not the same as those with MA plans that include PDP within them.

Medicare Advantage Plans have their place and for some are the preferred option.  But the buyer must understand plan limitations, some of which may be significant.

It is my opinion that not only does Medicare steer the buyer toward Medicare Advantage Plans, but many private insurance companies fail to adequately disclose the differences between Medicare Advantage Plans and Medicare Supplement Plans.

When MA buyers do become disillusioned it is almost a given that both Medicare and the company will claim that the problem was created by agent misconduct. Perhaps?

When you delve into the fine details, it is my opinion that it will become apparent that the genesis of the problem is with Medicare AND the companies.  Medicare pays the companies monthly capitation rates of more than $800 per Medicare Advantage Plan enrollee!  If a company enrolls 1,250 new beneficiaries their cash flow will be increased by more than $1 MILLION a month.  Selling Medicare Supplement Plans to 1,250 enrollees will not likely increase the cash flow to the insurance company $200,000.

Follow the money!

Jim Spahr/Petaluma, CA 2010



Jackie and Jim Spahr
call or fax toll free:
1.800.237.0107 fax  1.888.356.5956
Jackie Spahr  Jim Spahr