Close  

Medicare Advantage vs. Medicare Supplement Plans


If you are enrolling in Medicare or are looking to change plans, you may wonder which plan is best for you. When deciding which plan to enroll in, you must first choose between a Medicare Advantage plan and a Medicare Supplement plan.

There are many differences between Medicare Advantage vs. Medicare Supplement plans. So, it is crucial to do your 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 is the Difference Between Medicare Advantage and Medicare Supplements?

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 profit margins for carriers between Medicare Advantage and Medicare Supplement plans.

Depending on your lifestyle, budget, and medical coverage needs, one plan type will be more suitable for your needs than the other.

Listen to this Podcast Episode Now! Listen to this Podcast Episode Now!
 

What is a Medicare Advantage Plan?

Private insurance companies offer and administer Medicare Advantage plans. These plans take on the role of primary coverage for Medicare beneficiaries. Medicare pays these private insurance companies to take on your risk.

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

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

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

How Are Medicare Supplement Plans Different?

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 normally 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.

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

Pros and Cons of Medicare Advantage vs. Medicare Supplement Plans

There are several differences between Medicare Advantage vs. Medicare Supplement plans. A Medicare Advantage plan (Medicare Part C) is structured to be an all-in-one option with low monthly premiums. 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
  • Additinal 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 in regard to 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?

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. Whereas Medicare Advantage plans are the best option if you are hoping 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

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 have 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.

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!

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 “Medicare Advantage vs. Medicare Supplement Plans

  1. I WISH I had found your site last year when I was doing tons of research when I was first enrolled in Medicare Part A & B. Reading your site has given me more information in one sitting than everything else combined, including speaking to brokers (not through your site). Thank you! I never signed up with an Advantage or Medigap during my open enrollment period, such was my confusion about everything. Also, I am in an unusual position of having to pay for both Part A or B. My income is quite low, so I have wanted to avoid additional premiums, but it feels like I’m gambling on maintaining good health. Growing up in England with the benefits of the NHS, the American system of healthcare appears inhumane — and costly! But it’s time to stop gambling and sign up, probably with a low premium Medigap policy. Reading this site, I learned (for the first time) that I will be subject to health questions. Fortunately I am in good health, but concerned how some congenital issues might go against me. I will phone one of your brokers. Thank you again for a great site.

    1. Heather, we appreciate your kind words. Enrolling in a Medicare plan can be scary, especially the first time. To speak with one of our knowledgeable agents about all of your options, fill out the online rate comparison form or call the number above. We look forward to helping you find the best coverage.

  2. A relative of mine has a rare disease in which he/she gets a blood test one day and an injection at the Dr office the next day, every week. The Medical bills are $840,000 for a year! Insurance company pays most. This relative may have to switch from an injection to tavalisse. This relative currently has bcbs and wants bcbs when he/she gets on Medicare in a few months. What plan would you recommend for this individual living in IL? What if he/she moves to TN or FL during 2022? Thank you

    1. Hello – we would recommend they speak to an agent about the options available to them. We work with people nationwide to help select the best Medicare coverage, so please feel free to share our phone number with your relative.

  3. Hello. I have Medicare A&B + a supplement (Medigap) & Prescription/Drug coverage which I prefer (vs Medicare-Advantage) for several reasons. I find that there’s a “PartB Give Back” program that can pay part of my Part B costs. Why is this only offered via Medicare-Advantage? Is it possible my insurance carrier (Medigap) may provide this but is not publishing this?

  4. I am 72 1/2 years old & I have had creditable coverage since I turned 65, through my husband’s health insurance, until 6/30/2021. We recently moved to Florida and I just applied for enrollment in Medicare Part B. I was told that I will covered starting on September 1, 2021. I was unsure about whether I wanted to get a Medicare Advantage Plan or a Medigap plan. After reading all of these questions & answers, I think a Medigap plan is the way I want to go! Will I be able to enroll in a Medigap Supplement insurance plan on September 1st or will I have to wait for an enrollment period?

    1. Hi Georgia! Yes, Medigap is the way to go. You can sign up for a Medigap plan now since you know your Part B effective date. It will start the same day as your Part B if you sign up quickly. Otherwise, it will start the first of the month after you enroll. If you give us a call, we can help you search for options in your area. We’re also in Florida, so we know the plans well! You can also fill out our compare rates form to have an agent contact you directly. You for sure want to enroll within 6-months of your Part B effective date since this is your once-time open enrollment window for Medigap.

  5. My neighbor(62 yrs.old and in good health) insists that she can enroll in a Medicare Advantage Plan without having Medicare. Is she correct? She will be retiring in October.

    1. Hi Judith! Your neighbor is incorrect. You must enroll in Part A & Part B to be eligible for a Medicare Advantage plan. You are only eligible for Medicare when you either turn 65 years old or have been collecting SSDI for at least 24 months. You do not become eligible simply because you retired.

  6. I’m just starting the search for Medicare Plan B or Medicare Advantage since I retired just a month ago. I am almost 74, in pretty good health with no issues and typically only see the doctor for an annual physical. I do want dental, vision and hearing coverage. Is an Advantage plan the best option for getting that type of coverage, or are there other things to look at? It’s still a mystery to me why everything related to our health isn’t covered. Perhaps some day…

    1. Hi Debra! Have you had creditable coverage since you turned 65? To clarify, you have to enroll in Part B to be eligible for a Medicare Advantage plan. The same goes for Medigap. It’s not an either-or. There are a lot of factors to take into consideration that is too difficult to go over here without speaking to you. I would reach out and give one of our agents a call to discuss your options.

  7. Hello Lindsay
    Thank You most of all I was in a Tailspin Till I came across your site. I’ll be 65 this coming November and I’ll be going with the medicap plus D Plan. Do you happen to recommend any particular
    Insurance Carrier? Seems like every time I look I’m thrown back into an advantage plan

    1. Hi Cindy! Thank you so much for the positive feedback! Yes, most online rate comparisons are only for Medicare Advantage. It’s hard to compare Medigap rates without an agent that has access to them. Medigap plans are standardized by the federal government. What that means is the benefits for each letter plan are exactly the same from carrier to carrier. The only difference between carriers is the premium they charge for the plan. That’s why once you choose what Medigap letter plan you want, you then compare the premiums for that letter plan across each carrier. Again, regardless of what carrier you choose the benefits will be the same.

  8. Hi! I’m looking at a Nursing Home Care Advantage Plan for my 95 yr. old Mom. She has has a Supplemental Plan B since 1999. Her premiums are $292/month, plus her Plan D. This new NHCAP offers $1,800 annual out of pocket, $29/month prescription coverage. She doesn’t go to a doctor a lot, but, she is 95 with Alzheimer’s. It’s a tough decision.

    1. Hi Jack! This sounds like a tough decision for sure, but we can help. I would recommend giving us a call so we can go over all your options to get your mom on a plan that would best meet her needs.

  9. I turned 65 today (6-29-20) and I enrolled in “original” medicare Part A and Part B. Somewhere I had read (must have been on a different site) that “most people don’t pay a premium for Part A”. Is that true? Another site (or maybe it was this one!) stated I’d be paying about 252.00 per month for Part A. This is so confusing! And, that Part B will cost me about 144.60 per month. For all of the money that has been deducted out of our paychecks over the years, I would think that both Part A and B should be free, or pretty darn close to free. Well anyway, my understanding, based on this great website, is that Medigap is better than Part C (Medicare Advantage Plan) because of the wider network and cross-state coverage. But Medigap doesn’t offer prescription drug coverage (whereas Medicare Advantage Plan does offer it, along with vision, dental, hearing). My question is about Medigap . . . is it essentially Part A (hospitals) and B (doctors) but through a private insurance carrier? If I buy a Medigap plan and a Prescription Part D plan, do I need to cancel my enrollment in the “original” medicare Part A and B?

    1. Hi Catherine! Happy Birthday!! (one day late) This is a fantastic question. I appreciate your positive feedback too! So, Part A is free for most beneficiaries. As long as you paid into Medicare for at least 40 quarters, it will be free. There is a monthly premium for Part B, and you are correct that the standard Part B premium is $144.60 per month for 2020. (you still have to pay the Part B premium even if you’re enrolled in an Advantage plan) You’re also correct that Medigap plans give you more comprehensive coverage than Medicare Advantage. You’ll have way less out of pocket expenses with Medigap than Advantage. In addition to Advantage plans not having decent travel coverage or a large network of doctors, they charge you copays for everything. With Medicare + Medigap, there are zero copays. Medigap does not replace your Part A and Part B, it supplements it. Meaning, you don’t need to cancel Part A and B to enroll in Medigap. You are correct, these plans are offered through private carriers, they fill in the gaps that Part A and B leave up to you to pay. This includes deductibles, as well as the 20% coinsurance under Part B. Medigap plans do not include prescription drug coverage. You’ll want to enroll in a stand-alone Part D plan for that. Part D plans offer more coverage on prescriptions than MAPDs. Ideally, you’ll want to have Part A + Part B + Medigap + Part D. To break it down, Part A is free, Part B is $144.60, Part D is usually around $33. It’s tougher to give you an estimate on your Medigap plan because there are so many factors that come into play with these premiums. However, depending on the letter plan you choose to enroll in, your monthly premium could cost anywhere between $50-$300 per month. I hope this helps! If you have any more questions, please don’t hesitate to ask.

  10. Where is there a Plan G for 100.00 per month. I have your company’s Plan N which costs me $133.83 per month with a $20.00 copay!!! Was I not sold the most cost-effective Plan???

    1. Premiums are dependent on multiple factors. The above amount is just used as an example. Plan G may cost someone $100 in one state, and that same person will pay more in another state for the same plan. We are a broker, not a carrier. That means we do not determine the premiums of each plan, the carrier you signed up with does. We help you compare the cost of all the plans available in your area and sign you up with the carrier that offers the lowest premiums for the plan you choose to enroll in. Let me know if you have any more questions!

  11. I am confused about enrolling in Medigag ….”When you are first eligible” .Does that mean I must enroll immediately after age 65 or in my case, I am 87 years old but have only ever been enrolled in Medicare Part A and B. May I enroll in Medigag? Must I answer medical questions? Would asthma disqualify me?

    1. Hi Matt! You’re first eligible for Medigap once you’re Part B is in effect. Once your Part B is active, you’ll get a 6-month window to enroll in a Medigap plan without answering health questions. If you have creditable coverage, then you’ll be eligible for a SEP that allows you to enroll without answering health questions. You can enroll in a Medigap plan at any time. However, if you have no other creditable coverage, you’ll have to answer health questions during the enrollment process. Asthma may or may not disqualify you. There are many other factors to consider. Give us a call so we can help!

      1. I am living in Massachusetts. Got Part A in 02/2020 (65 years old). Part B was active in 12/2020 when my spouse lost medical coverage at work. I enrolled United Healthcare Medicare Advantage Plan in 12/2020. I heard that you can enroll Medigap plan any time without answering health questions in Massachusetts. Is it true? If not, may I switch to Medigap plan without answering health questions before 5/31/2021? Thanks

      2. Hi K! Massachusetts has an annual two-month window that comes around every February & March where all Medigap plans are guarantee issue. You are correct. Since your Part B did not go into effect until 12/2020, you are still in your Medigap Open Enrollment Period until the end of May. Even though you missed the annual enrollment period that the state has, you can still switch from Medicare Advantage to Medigap until 5/31/2021 without having to answer any health questions. Massachusetts only offers 3 Medigap plans, the CORE Plan, Supplement1 Plan, and the 1A Plan. We have a video that goes over these three options.

      3. Hi,

        Thanks for your kindly response. If I don’t switch from Medicare Advantage to Medigap by 5/31/2021, may I enroll Medigap plan next February & March without having to answer any health questions.in Massachusetts?

      4. Hi Wang! Yes, you can enroll between February 1st & March 31st. You may still have to answer health questions, but they won’t impact your enrollment since Massachusetts has an annual open enrollment window for Medigap.

  12. Are more doctors/specialists likely to accept Advantage Plans over Medigap, due to the fact they have to deal with the government? Great web site very informative!!

    1. Hi Steve! Thank you so much for your positive feedback, we greatly appreciate it! To answer your question, it’s actually the opposite. Over 800,000+ doctors across the United States accept Medicare. With Medicare Advantage, you’ll find that many doctors are not in their network. I would imagine it’s easier to work with the government over private insurance companies regarding Medicare. Just because Medicare already has an agreement with doctors on costs for their services, so they know what they’re going to get paid for the most part. Each Advantage plan carrier can set their own prices, which can make the process of getting paid for those services more time-consuming.

  13. Under the section for Medicare Supplements it says. “Enroll at Anytime”
    You can enroll in a Medigap plan at any time. As long as you join during your open enrollment window, you won’t have to answer health questions. If you have a pre-existing condition, there are no waiting periods. If you wait to enroll outside of your open enrollment, you’ll have to answer some health questions. ……………………………. Later in the section about Medicare Advantage Plans it say Once you leave a Medigap plan and switch to a Medicare Advantage plan, you may not be able to go back to your Medigap plan. Since your one-time enrollment window has most likely passed, you’ll have to go through medical underwriting to be accepted back into a plan. I am not clear on this. I turn 65 in March 2020. If I sign up for a MAP and then 5 years later want to switch to traditional Medicare plus Medigap will I be able to do so without answering medical questions as long as it is done during open enrollment? Thanks

    1. Hi Kathryn! Great question! There are many Open Enrollment Periods with Medicare. For Medigap plans, your Medicare Supplement Open Enrollment happens only once, unless you’re on SSDI. It starts the first day of the month your 65 and your Part B is in effect. So, if your Part B is in effect April 1st of 2020, you’ll have until the end of Septemeber to enroll in a Medigap plan without answering health questions. If you choose to enroll in a Medicare Advantage plan, the only way you can get into a Medigap plan without answering health questions is if you do this before your Open Enrollment window closes at the end of September. If you decide to keep your advantage plan for 5 years and then switch to Original Medicare + a Medigap, you will have to answer health questions. It’s important to remember that Open Enrollment and Guaranteed Issue are two different things. Just because you’re enrolling during an Open Enrollment period, doesn’t mean you have Guaranteed Issue Rights. Therefore, it’s best to enroll in a Medigap plan when your first eligible so you can do so without answering health questions.

  14. 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.

Comment

Your email address will not be published.