Medicare supplements vs. Advantage PPO plans: How do they differ?

Dear Toni: Thank you for teaching us the value of Medicare Part B and for helping my husband, Mike, and me enroll in Medicare the correct way when he retired at 70 a few months ago.

Mike was determined to go with a Medicare Advantage PPO plan because it had a $0 monthly premium, and he thought that there was no difference between a Medicare supplement and a PPO plan except cost.

Last week, Mike received a life-changing diagnosis of terminal liver cancer. Had we chosen the PPO route, Mike and his medical team would not be in control of his care. — Betsy, Spring, Texas

Dear Betsy: People need to understand that there are differences between Medicare supplements and Advantage PPO plans other than premiums. They are different types of Medicare policies.

With a Medicare supplement, there is not a network; you have the freedom to use any health care provider or facility that will bill Medicare. The Medicare supplement will pay your costs that Medicare Parts A and B do not.

With a Medicare Advantage PPO plan, there are lower costs for in-network providers or facilities as well as higher costs for out-of-network benefits. Most people on a PPO plan never consider that they might have to pay an out-of-network medical claim, but in these current times many providers and facilities are out of network with a Medicare Advantage PPO.

Let’s compare the two plans.

Medicare supplement

1. Medicare supplements work directly with original Medicare. Medicare pays its share of the approved amount for “medically necessary” covered health care costs. The supplement will pay its share.

2. You — not the insurance plan — choose your doctor, hospital, skilled nursing facility or other health care facility, so long as the provider accepts Medicare assignment. You and your health care providers are in control of your health care.

3. The downside to a supplement is that you have a monthly premium that may increase each year.

4. Medicare (Part D) prescription drug plans are not included, so you may need to enroll in and will pay separately for a stand-alone Part D prescription drug plan.

Medicare Advantage PPO

1. To qualify for any Medicare Advantage plan, you must be enrolled in Medicare Parts A and B and must live in the plan’s service area six months out of the year.

2. Medicare pays the insurance company a certain dollar amount every month for your care with the Medicare Advantage prescription drug plan you are enrolled in. Your Parts A and B must remain in effect.

3. When you go to the doctor, hospital or pharmacist, you must only use your Medicare Advantage plan insurance card, not your Medicare card, and you must verify that your specific medical provider is still accepting the MAPD plan that you are enrolled in.

4. A Medicare Advantage Plan must provide all of your Part A and Part B benefits, and some Medicare Advantage plans have Part D prescription drug plans included. They may also have extra benefits such as gym membership, dental and vision.

To learn more, review the 2024 “Medicare &You” handbook or visit medicare.gov.

Toni King is an author and columnist on Medicare and health insurance issues. If you have a Medicare question, email info@tonisays.com or call 832-519-8664.