Welcome back to this 5 Part Medicare 101 series!

In Part 2,  we’ll be talking about what your options are, in a nutshell.

In Part 1, we talked all about what Medicare is, what it covers, and how to sign up.

But once you sign up, it’s time to decide if you want to supplement your coverage.

How do I know which Plan Option is right for me?

The problem most people encounter is, how to know which option is for you?

That’s what you’re going to find out by the end of this series.

This segment is simply introducing you to the options you have, so it’ll be one of the shorter segments in the series.

You’re going to love the fact that there’s really just two paths you can go down.

(Yes, there are some exceptions, and some variations on those two paths).

BUT, we’re going to keep this step SUPER simple.

So let’s jump in!

The chart below, taken from Choosing A Medigap Policy, shows it like it is.

Step 1:  Decide how you want to get your coverage.

Original Medicare Vs Medicare Advantage


It makes it sound so easy, doesn’t it?

I’m going to clear up once and for all, the main distinctions between these two options.

It comes down to just two main things:

1.) Freedom

2.) Cost

The Freedom of Original Medicare

I believe that the biggest selling point to keeping Original Medicare is the freedom to use any doctor or hospital that accepts Medicare.

It’s so important to make this distinction!

No where on the chart above does it clarify that going down the path of Option #1 gives you freedom, while going down the path of Option #2 DOES NOT.

So if provider Freedom is important to you, keep this in mind.

The Cost Factor

The 2nd distinction between the above two scenarios is cost.

It’s not just about overall cost, but how, and when, you pay.

When you keep Original Medicare, and add a Medigap policy, (plus a drug plan), you will be paying an additional monthly premium (beyond what you must pay for Medicare Part B).

So that means, whether you’re sick or not, you will always have a set monthly cost.

However, if you decide to enroll in a Medicare Advantage plan, it’s likely you will pay $0 additional monthly premium.

Let me repeat – Option #1 means you have an extra monthly cost (beyond the cost of Medicare Part B).

Option #2 means you will likely have NO additional monthly cost.

Let’s examine this further.


While Medigap policies cost you a monthly premium, you gain the value of total provider freedom, which you really can’t put a price tag on.

Secondly, depending on the Medigap Plan letter you choose, you may have little to no additional out-of-pocket medical costs on an annual basis.

In other words, when you have a Medigap policy, you have freedom, AND predictability.

Medicare Advantage Plans

Most Medicare Advantage Plans (depending on your location) are zero premium plans.

You still pay your Medicare Part B premium, but that’s it.

What varies widely and is hugely unpredictable, is your out of pocket costs in terms of copays and coinsurance.

Medicare Advantage  plans vary depending on your state and zip code, and change every single year.

Every Medicare Advantage Plan contract is a one year contract.

When you enroll, you are agreeing to the plan terms for one year.

There is no way of knowing the future costs of any one plan, or the future changes to the provider networks.

The disadvantages of Medicare Advantage

The biggest disadvantage to enrolling in a Medicare Advantage Plan is the lack of freedom to go to any provider in the country that accepts Medicare.

Most Medicare Advantage Plans are HMOs (health maintenance organizations).

HMOs contract with a limited group of doctors (usually referred to as a network).

In order to use your plan benefits, you must use one of the contracted providers.

By agreeing to only use the plan contracted providers, you are exchanging your freedom for some extra benefits, with no additional monthly premium.

If you get care from outside of the network, you will have to pay the full cost.  Even Original Medicare won’t cover out of network services, because you signed a contract agreeing to allow the private insurance company to administer your Medicare.

Once you sign that contract, Medicare no longer pays your claims, but instead pays the insurance company every month to cover your medical care.

That is why Original Medicare cannot pay your medical claims as long as you are on a Medicare Advantage plan.

That’s how you give up your freedom when you enroll in a Mediare Advantage Plan.

One more thing you’re giving up when you enroll in Medicare Advantage

Finally, there’s one more thing you must understand, especially if provider freedom is important to you.

If you’re considering a Medigap plan, whether now, or down the road, don’t forget that your Medigap Open Enrollment Period is the only time you’ll have the opportunity to enroll without medical underwriting.

In other words, if you enroll after your Medigap Open Enrollment period has ended, you’ll have to answer health questions on the application and you could be denied.

Many people don’t realize that they could be giving up their chance to enroll in a Medigap policy forever, when they choose Medicare Advantage.

The good news is, you have a one year trial period on a Medicare Advantage Plan.  If you’re still within your first year on a Medicare Advantage plan and want to switch to a Medigap Policy without answering the health questions, you can do that.

In conclusion

I just want to quickly recap what we covered so far.

  • In Part 1 we went over Medicare Basics, how to find out if you’re eligible, and how to enroll.
  • In this segment (Part 2) of the mini-course, we gave an overview of what your two main options are after enrolling in Medicare Parts A & B.
  • In Part 3, we’ll dive deeper into what a Medicare Supplement (Medigap Policy) is, and how they work.

The Primary Takeaways

To keep things simple, I explained how there’s really just two main options once you’re enrolled in Original Medicare:

1.) You choose to keep Original Medicare and add a Medigap Policy, plus drug plan.

2.) You may receive your Medicare benefits through private insurance by signing up for a Medicare Advantage plan.

The most important points I wanted to get across were the differences between the two plan types in regards to provider freedom, and predictability of costs.

Finally, I made it clear that your guaranteed enrollment into a Medigap policy may be lost forever if you don’t enroll during your Medigap Open Enrollment.

Those are the straight, simple facts, folks!

You’re now armed with some of the most important information out there, to help you make a decision about how you want to receive your Medicare benefits.

Stay tuned for Parts 3, 4 & 5 of this Medicare Mini-Course in which you’ll learn about these options in more depth, as well as tips on how to know which plan type is right for you.