Consumer Guide: Medicare Supplement & Medicare Advantage Insurance

Medicare Supplement and Medicare Advantage Insurance

If you are nearing 65 or already enrolled in Medicare, it is important to know that Original Medicare alone doesn’t cover all medical expenses. This is where Medicare supplement insurance or Medicare Advantage plans come in. However, with so many options available, finding the right plan can be overwhelming. This is where a knowledgeable insurance agent can help. A good agent will help you understand your options, including the differences between Medicare supplement and Medicare Advantage plans, as well as help you find a plan that fits your specific needs and budget. In this consumer guide, we will provide you with tips on how to choose the right agent to help you navigate the complex world of Medicare insurance.

The Centers for Medicare & Medicaid Services (CMS) has strict rules regarding the sales and marketing of Medicare Supplement and Medicare Advantage plans. Individual states also have insurance regulations in place. The following tips are not intended to replace or interfere with existing CMS or individual state rules and regulations already in place. Be sure to visit the official US Government website for Medicare at and your state’s insurance commissioner for a complete listing of current rules and regulations.

Tips From the Experts: Key Factors to Consider When Working with a Medicare Insurance Agent or Brokerage Company

Note: Any item listed with an asterisk (*) below is a NAOSA Gold Standard of Professional Practice™ and is required for NAOSA professional membership. For more details, please visit the  NAOSA Consumer Guides page.

Agents should be an unbiased advisor*

In accordance with CMS regulations, members must remain unbiased and may not steer you to a specific policy or insurance company. Be wary of agents who push one plan over others without explaining the reasons why

Be sure the agent presents coverage from more than one insurance company*

Review plans from multiple insurance companies to ensure you receive a complete comparison of benefits and premiums. CMS and individual states have regulations in place, but, at a minimum, review policy benefits, premiums, out-of-pocket costs (including, but not limited to: deductibles, maximum out-of-pocket risk, co-payment, and co-insurance), prescriptions, and provider network. NAOSA members are required to present coverage from more than one insurance company. Be wary if an agent does not.

Compare Both Medicare Supplement and Medicare Advantage Plans*

Medicare Advantage plans may be lower in initial premium, but many have higher copays and deductibles as well as limitations in their provider network. Copays are especially important if you are currently ill or become ill. Be sure to take this into consideration before
making a decision. You may find that premiums for Medicare Supplement in your state are cost prohibitive, but you still want to check to be sure.

Be sure to receive a quote for Medicare Supplement Insurance*

When reviewing your options, you should always ask for a quote for Medicare Supplement Insurance and should not just review quotes from Medicare Advantage Plans (with the possible exception of individuals on medical assistance). Why? Medicare Advantage Plans are generally less expensive than a Medicare Supplement Policy; however, the lower premiums usually come with higher out-of-pocket costs if you become ill. This may be especially important if you choose to switch plans at a future date due to cost. Switching insurance plans may require additional underwriting and you may be ineligible to change plans due to medical history.

NAOSA members should always follow the guidelines above. If you are not working with a NAOSA member insurance agent, be very wary of an insurance agent who is pushing Medicare Advantage over a Medicare Supplement. Even with lower premiums, the commissions to the agent are generally higher.

Ask for a full disclosure of potential Out of Pocket Costs of a Medicare Advantage Plan*

If choosing Medicare Advantage Plan, you should be comfortable with the potential of paying the deductible if applicable, and the maximum out-of-pocket costs of the Medicare Advantage Plan. You should clearly examination the potential future costs, especially if you are currently undergoing treatment for an illness, have a history of extended hospital stays, and/or are being treated for other major chronic conditions that would require ongoing treatments. Even though Medicare Advantage Plans may be cheaper initially, serious consideration should be given to potentially higher costs due to illness.

Be very wary of an insurance agent who is pushing Medicare Advantage over a Medicare Supplement.

NAOSA members should always follow the guidelines above. If you are not working with a NAOSA member insurance agent, be very wary of an insurance agent who is pushing Medicare Advantage over a Medicare Supplement. Even with lower premiums, the commissions to the agent are generally higher.

Zero Premium Medicare Advantage Plans

Zero Premium Medicare Advantage plans may have higher out-of-pocket costs, such as annual deductibles, copayments, and coinsurance than other plans. As stated previously, always compare.

Make sure you thoroughly compare physicians and other medical facilities offered in company network before buying

A Medicare Advantage Plan physician and provider network may be limited and may not include your doctor, hospital, or other providers. Before choosing any policy, be sure to perform a thorough review of your current medical providers to verify participation and discuss alternatives if applicable. Note: Medicare Supplement ‘Select Plans”, available in a few states, have limited networks as well. Be sure to check if you choose this option.

Review your prescriptions

Your prescriptions must be reviewed to ensure your current medications are listed on the suggested plan’s formulary. This is especially important when comparing Medicare Supplement vs. Medicare Advantage Plans. It is recommended that every individual review prescriptions and costs yearly.

Ask your agent for any available resources for prescription drug financial assistance

Professional agents should be a great resource for those who need guidance on finding resources to pay for prescriptions.

Keep in Mind that in Many States, Medigap Plans Are Medically Underwritten

This means that if you become ill, it may be difficult to switch your coverage to Medigap policy from Medicare Advantage. That’s why it is especially important to decide wisely. And although no one can predict future health, making a smart decision the first time will serve you very well in the future.

Are you a professional in the Medicare insurance field?
We welcome your constructive input to assist in the protection of all consumers. Please contact us.

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