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Medicare: Advantage Plan Or Supplemental? What Makes The Most Sense For YOU?

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If you are over the age of 65, Medicare is a wonderful tool that you can use in order to save money on your health insurance. However, not all plans are created equal. If you feel you are paying too much for your Medicare Advantage plan, you may want to think about switching to one of the many Medicare supplement plans.

What is the difference between a Medicare Advantage plan and a Medicare Supplement plan? There are many differences. In order to fully understand them, here are three distinct differences, and how the plans compare. 

The main thing to understand about the difference between these two types of plans is that in a Medicare Advantage plan you pay as you go, and in a supplemental you pay upfront. A medicare advantage usually has a very low monthly premium, but each time you use your insurance it costs money. A supplemental play has a high premium, but almost every service is all-inclusive. 

To illustrate this point, imagine that you need knee surgery. This surgery will require that you be in the hospital for 4 days, and then an assisted living for 2 weeks afterward. 

Advantage Plan: If you had a simple advantage plan, you would be paying your normal monthly premium of something like $30. You would then have to pay a certain amount for each day you were in the hospital, which could be around $125 a day. Usually, advantage plans make you pay for the first 5 days and then the rest is completely covered. As for the costs of your surgery, you will need to pay your deductible of $3000 before your plan covers the rest. Luckily, assisted living will be covered for up to three weeks. In total, you could be expecting to pay around $3500 for your surgery. 

Supplemental Plan: With a supplemental plan, your monthly premium is around $150. In order to get your surgery, you will need to pay your premium and then...well, that's it. Since you paid so much upfront for each month, all other services are covered. The hospital, the surgery, the rehab after, they are all part of the plan. 

As you can see, a supplemental plan would really be the way to go if you need medical treatment. If you are pretty healthy and do not go to doctors often, the $30 of an advantage plan would be cheaper. It really all just depends on how many medical needs you have.

If you have further questions concerning what Medicare plan is best for you, seek out a company that provides such plans, such as Senior Advisors.