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Medigap vs Medicare Advantage


If you are new to Medicare or want to change your plans, finding the plan with the right health benefits for you is essential. When deciding which plan to enroll in, your first step should be to choose between Medigap plan vs. Medicare Advantage plans. Understanding which plan type best fits your needs is top priority when enrolling in coverage.

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There are many differences between Medicare Advantage vs. Medicare Supplement plans. So, it is crucial to research and thoroughly understand how each plan type works before deciding. You are not alone in your research, and we are here to help.

What Are Medicare Advantage Plans?

Medicare pays private insurance companies to take on your risk by administering your healthcare when you enroll in a Medicare Advantage plan. These plans take on the role of primary healthcare coverage for Medicare beneficiaries and can include additional benefits outside of traditional healthcare.

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These plans may also come with a regional network of doctors and hospitals, meaning coverage from your plan will not travel with you. Additionally, your current doctor may not accept the plan as coverage if they are not within the plans network.

Medicare Advantage plans must offer the same benefits you get from Original Medicare and can also include additional benefits. However, these other benefits vary from plan to plan. When you enroll in a Medicare Advantage plan, you agree to pay higher out-of-pocket costs through cost-sharing in exchange for a lower monthly premium.

Often, Medicare Advantage plans include prescription drug coverage. While not all plans offer drug coverage, most Medicare Advantage HMO and PPO plans include this additional benefit.

What Are Medicare Supplement (Medigap) Plans?

Medicare Supplement (Medigap) plans are also offered through private insurance companies. Yet, they must include the same coverage regardless of carrier. Medicare Supplement plans pick up the remaining cost-sharing for which you would typically be responsible with only Original Medicare.

Medicare Supplement plans give you the ability to predict your costs. Because all plans have the same benefits, you will always know your out-of-pocket limits. When enrolled in a Medicare Supplement plan, there is no network of doctors to which you must adhere.

You can receive coverage from any doctor or hospital that accepts Original Medicare across all U.S. states and territories.

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Additionally, some Medigap plans – such as Medicare Supplement Plan G – cover excess charges in states that allow them. If the doctor does not accept Medicare assignment, you will not need to pay extra because your Medigap plan protects you.

What is the Difference Between Medicare Supplement vs. Medicare Advantage?

While Medicare Supplement plans pay secondary to Original Medicare, Medicare Advantage plans become your primary source of coverage when you enroll.

Medicare pays a set amount to the carrier for the Medicare Advantage plan in which you enroll to take on your coverage needs for the calendar year.

Those new to Medicare may notice a considerable amount of Medicare Advantage plan promotion through advertisements and little to no promotion of Medicare Supplement plans.

This is due to the difference in carrier profit margins between Medicare Advantage and Medicare Supplement plans.

Depending on your lifestyle, budget, and medical coverage needs, one plan type will suit your needs more.

Medicare Supplement vs. Medicare Advantage Pros and Cons

There are several differences between Medigap vs. Medicare Advantage plans. A Medicare Advantage plan (Medicare Part C) is structured as an all-in-one option with low monthly premiums.

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Medicare Supplement plans offer additional coverage to Original Medicare with low to no out-of-pocket costs. The chart below reviews the pros and cons of Medicare Advantage and Medicare Supplement plans.

Medicare Advantage Plans Medicare Supplement Plans
Pros Cons Pros Cons
  • Additional benefits (dental, vision, drug, etc.)
  • Low monthly premiums
  • Over 200+ plan options 
  • Higher maximum-out-of-pocket costs (up to $10,000)
  • Restrictions to doctors and hospitals
  • Coverage does not travel with you (only covered in the plan’s service area)
  • Most plans require referrals
  • Low to no out-of-pocket costs 
  • NO network restrictions
  • NO referrals
  • Foreign travel emergency coverage on most popular plans
  • Coverage travels with you throughout the U.S.
  • Standardized benefits 
  • Higher monthly premium
  • Additional plans for dental, vision, and prescription required
  • 12 Plan options available

When it comes to Medicare Advantage vs. Medicare Supplements, the biggest complaint we hear from our clients is that they are unable to accurately predict their out-of-pocket costs when enrolled in a Medicare Advantage plan.

On the other hand, the biggest compliment we hear from clients is regarding Medicare Supplement plans. Most beneficiaries stick with Medicare Supplement plans because of their ease and reliability. The option to go to any doctor that accepts Original Medicare is the cherry on top of Medicare Supplement plans.

Which is Better Medicare Advantage vs. Medicare Supplement (Medigap)?

Medicare does not offer a one-size-fits-all plan. So, the best policy for you is the policy that best meets your healthcare needs.

Medicare Supplement plans are the best option if you want complete reassurance and predictability with your healthcare but are comfortable paying higher premiums in exchange for lower out-of-pocket costs.

In contrast, Medicare Advantage plans are the best option if you hope to save on monthly premiums and receive additional benefits while accepting responsibility for additional out-of-pocket costs at the doctor’s office.

For overall ease and reliability, our recommendation is always Medicare Supplement plans. However, we know that may not work for everyone. Our goal is to provide you with your best options regardless of plan type.

Medicare Supplement Plan G vs. Medicare Advantage HMO

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Compare Medicare Advantage Plans

There are different types of Medicare Advantage plans available. So, before you decide between a Medicare Supplement plan and a Medicare Advantage plan, you’ll need to determine which Medicare Advantage plan type will work best for you.

The two most popular Medicare Advantage plan types are Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO) plans.

HMO plans are a common type of Medicare Advantage plan that requires you to choose a primary care doctor and only allows you to receive care within a strict network of doctors and hospitals.

A PPO plan, on the other hand, allows for a broader range of care. With a PPO, you do not need to choose a primary care doctor and will be able to see physicians outside of your network at a higher copayment amount. However, costs for PPO plans tend to be higher than HMO plans.

Typically, HMO and PPO Medicare Supplement plans will also offer prescription drug coverage alongside their health benefits. However, this is not always the case. You’ll want to be sure the plan you choose also covers your drugs.

How Do I Choose Between Medicare Advantage and Medicare Supplement Plans?

Do you want predictable costs, the freedom to choose any doctor, avoid referrals, and peace of mind while traveling? If you answered yes, you are looking for a Medicare Supplement plan.

Are you comfortable with unpredictable copayments, strict doctor networks, and referrals in exchange for a lower monthly premium and additional benefits? If your answer is yes, Medicare Advantage could work for you.
The best part about working with agents is that no matter which option you choose, we make sure it is the best for you. Perhaps you are already thinking about making the switch from a Medicare Advantage to a Medicare Supplement plan, or the other way around.

Give us a call at the number above to learn about your best plan options today! Or, fill out an online rate form to connect with an agent today!

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Sources:

MedicareFAQ is dedicated to providing you with authentic and trustworthy Medicare information. We have strict sourcing guidelines and work diligently to serve our readers with accurate and up-to-date content.

  1. What's Medicare Supplement Insurance (Medigap)?, Medicare. Accessed October 2022.
    https://www.medicare.gov/supplements-other-insurance/whats-medicare-supplement-insurance-medigap
  2. Medicare Advantage Plans, Medicare. Accessed October 2022.
    https://www.medicare.gov/sign-upchange-plans/types-of-medicare-health-plans/medicare-advantage-plans

Jagger Esch

Jagger Esch is the Medicare expert for MedicareFAQ and the founder, president, and CEO of Elite Insurance Partners and MedicareFAQ.com. Since the inception of his first company in 2012, he has been dedicated to helping those eligible for Medicare by providing them with resources to educate themselves on all their Medicare options. He is featured in many publications as well as writes regularly for other expert columns regarding Medicare.

31 thoughts on “Medigap vs Medicare Advantage

  1. This is the most informative site I’ve seen Re supplemental vs med. advantage. Clear & to the point! I’ll be calling to get further information.

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