Medicare supplemental insurance and Medicare Advantage programs are both options for additional or alternative medical coverage for individuals enrolled in the Medicare program. Although some similarities exist within the programs, a number of differences also exist.
Senior with Medicare Advantage in a hospital
History
The Balanced Budget Act of 1997 provided Medicare recipients the right to obtain health coverage through private companies. Known as Medicare+Choice, this eventually became known as Medicare Advantage with the passage of the Medicare Prescription Drug, Improvement and Modernization Act of 2003.
Features
Medicare supplement insurance is essentially a program in which seniors can get additional coverage from a private company. Medicare Advantage allows a senior to roll Medicare coverage into a private insurance organization.
Function
Since Medicare Advantage allows beneficiaries to roll the financial cost of their benefits package into private companies, private companies stipulate the terms of use for the enrolled individuals, such as networks and payment limitations.
Significance
The major advantage of Medicare supplements over the Advantage plan is that seniors still retain the basic Medicare coverage. Since a supplement is simply more coverage, the individual is always guaranteed the federally-backed insurance.
Considerations
Medicare Advantage usually has the bonus of better prescription drug coverage than basic Medicare Part D. The private insurance companies are able to negotiate with drug companies, while the federal government does not have that right.
Tags: Medicare Advantage, private companies, Advantage allows, basic Medicare, into private
