Medicare Advantage vs. Medicare Supplement (Medigap)

Medigap comes with unlimited choices for care, while Medicare Advantage offers extra benefits and often no monthly premiums.

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Kate Ashford, CSA®
By Kate Ashford, CSA® 
Edited by Holly Carey

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Signing up for Medicare means making important decisions. For instance, you can sign up for a Medicare Advantage plan or enroll in Medicare Supplement Insurance, or Medigap.

You can't sign up for both types of coverage, so you'll want to understand how each works. The biggest difference between Medigap and Medicare Advantage is that with a Medigap plan, you have the freedom to see any doctor that accepts Medicare, whereas with Medicare Advantage, you must get care within the plan's network of doctors and hospitals unless it's an urgent or emergency situation.

Here's what you should know.

Compare Medigap plans

Medicare Supplement (Medigap) vs. Medicare Advantage

What is Medicare Supplement Insurance (Medigap)?

Medicare Supplement Insurance, or Medigap, is insurance sold by private companies that fills the "gaps" in Original Medicare by covering certain out-of-pocket expenses, such as deductibles and copays

Centers for Medicare & Medicaid Services. What's Medicare Supplement Insurance (Medigap)?. Accessed May 3, 2024.
. Medicare beneficiaries pay a monthly premium for a Medigap plan, which can vary widely based on age and geographic location. (You'll also pay a monthly Part B premium and any Part D prescription drug premium you may have.)

There are 10 Medigap plan types that have different levels of coverage and cost-sharing. These plans are standardized by the government, which means that a Medigap Plan G policy from one insurance company offers the same benefits as a Medigap Plan G policy from another company

Centers for Medicare & Medicaid Services. Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare. Accessed May 3, 2024.
. The things to consider when choosing a Medigap company are price and reputation.

How Medigap works

Original Medicare comes with deductibles and coinsurances you'll owe for your care. Some of your costs in Original Medicare that may be covered by a Medigap plan (depending on the plan type you choose) include

Centers for Medicare & Medicaid Services. Compare Medigap Plan Benefits. Accessed May 3, 2024.

  • A deductible for an inpatient hospital stay of $1,632 in 2024.

  • A copayment for each inpatient hospital day, such as $408 per day in 2024 for days 61 to 90.

  • A copayment for each day in a skilled nursing facility, up to $204 per day in 2024 for days 21 to 100.

  • A 20% coinsurance for medical services covered under Medicare Part B.

If you have a Medigap plan that covers these costs, you won't pay anything out of pocket other than your Medigap premium and your Medicare Part B deductible, which is $240 in 2024. However, if you purchased Medigap Plan F or Plan C before Jan. 1, 2020, the Medicare Part B deductible will be covered. (Note: Medigap Plans F and C are available only to people who became eligible for Medicare before 2020.)

"[Medigap will] keep the out of pocket to a very reasonable amount of money," says Jeffrey Golden, a certified financial planner in New York City.

When to buy Medigap

Medigap can be purchased during the six-month period that starts the month you're 65 or older and obtain Medicare Part B

Centers for Medicare & Medicaid Services. Get ready to buy: Your Medigap Open Enrollment Period. Accessed May 3, 2024.
. During this time, called the Medigap open enrollment period, companies must offer you a Medigap plan at the same price as everyone else. After this period, you may have to go through medical underwriting to get a policy, which could result in a higher price or denial of coverage if you're in poor health. (This is true unless you live in Connecticut, Massachusetts, Maine or New York, which offer guaranteed issue protections.)

You should carefully consider whether a Medigap plan is right for you when you're first eligible since it may be expensive or impossible to get a plan later.

What is Medicare Advantage?

Medicare Advantage is a bundled alternative to Original Medicare that includes the coverage of Medicare Part A and Part B, usually Part D (prescription drugs), and often extra benefits such as some dental, vision and hearing coverage. Medicare Advantage is sold by private health insurance companies that have contracted with the federal government to offer plans.

How Medicare Advantage works

These plans work much like the health insurance people may have had through an employer. Plans operate within networks of doctors and hospitals. To receive the lowest-priced care, you must use in-network providers and facilities. You may need a referral to see a specialist, and if you can access out-of-network care, it's usually more expensive.

When to buy Medicare Advantage

Medicare-eligible people can buy Medicare Advantage during their initial enrollment period, typically their 65th birthday month, plus the three months before and after. After that, you can change plans during Medicare open enrollment, which happens from Oct. 15 to Dec. 7 each year, or during Medicare Advantage open enrollment, which occurs from Jan. 1 to March 31 each year. You may also be able to switch plans if you qualify for a special enrollment period, such as when you've moved out of your plan's service area or moved into a skilled nursing facility.

Medicare beneficiaries must still pay their Part B premium, which is $174.70 per month in 2024, along with the monthly premium for their Medicare Advantage plan. That said, many Medicare Advantage plans offer a $0 premium.

Differences between Medigap and Medicare Advantage

Plan feature


Medicare Advantage

Unlimited network of providers

$0-premium plans

Preauthorization required for specialized care

In HMO and special needs plans.

Ability to move/travel and keep your plan

Possibly, if the Medicare Advantage plan allows.

Extra benefits like some coverage for dental, vision and hearing care

Cap on out-of-pocket costs

No cap in Original Medicare, but Medigap plans cover many out-of-pocket costs. Medigap Plan K and Plan L have out-of-pocket limits.

Is it better to have Medicare Advantage or Medigap?

When choosing between Medicare Advantage and Medigap, you'll need to think about how you prefer to receive medical care and how often you think you'll need it. Here are some considerations.

Consider Original Medicare with a Medigap plan if you:

  • Want to be able to see any doctor. Original Medicare with a Medigap plan gives you access to any doctor or hospital that accepts Medicare. "I think the choice is super important," says David Haas, a certified financial planner in Franklin Lakes, New Jersey. "People have diseases that are sometimes not easily treatable, and you want to choose your provider."

  • Intend to travel. Medicare Advantage plans come with limited service areas; if you travel outside, you may have to pay out of pocket for medical care. Signing up for Original Medicare with a Medigap plan means you can see any provider that takes Medicare in the country.

  • Have a chronic condition or receive frequent medical care. For example, if you see a lot of doctors, you could end up spending significant sums out of pocket on a Medicare Advantage plan, where the out-of-pocket maximum for in-network care can be as high as $8,850 in 2024. Although you pay a monthly fee for a Medigap plan, you're covered for many out-of-pocket costs that come with seeking frequent care — so your Medigap premium may be your only cost if you enroll in certain Medigap plans.

  • Like to play it safe. In the worst-case scenario, if you're diagnosed with a serious condition later in life, you may want to get care from the best specialists, who may or may not take your Medicare Advantage plan. You also may be surprised by the costs that add up when you start paying the deductibles, copays and coinsurance required by your Medicare Advantage plan. Medigap plans are designed to cover certain out-of-pocket expenses if you need a lot of care. "If you worry about the risk of cost, then you really should consider buying a Medigap policy," says David Smith, a retired financial planner and Medicare insurance specialist in Asheville, North Carolina.

Consider Medicare Advantage if you:

  • Live in an area with an extensive network. Although Medicare Advantage plans generally require you to seek care from their network of medical providers, that network may be sizable if you live in a large metro area. Therefore, it may be a good choice if you're happy with the medical providers and hospitals on your plan's network and intend to stay put.

  • Can't afford Medigap. Signing up for Original Medicare without a Medigap plan leaves you open to sizable medical bills if you need a lot of care. If you can't afford to buy a Medigap plan, you're likely better off with Medicare Advantage.

  • Prefer managed care plans. For some people, an insurance plan with a network feels comfortable and familiar because it's similar to the insurance they've had their whole lives. "If they were on an HMO, they've got no problem staying with an HMO," Smith says. "They tend to follow that, provided they were happy."

Compare Medicare Advantage plans

Medicare decisions are complicated, and your decisions when you first enroll can affect your care later. If you're confused, a Medicare specialist or consultant can help. In addition, your financial professional may be able to point you toward the right resource. "The people that I deal with are very accomplished in their own professions," Golden says. "They come to this [Medicare] and they tell me this is really difficult without getting some guidance."

Still deciding on the right carrier? Compare Medigap plans

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