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Whether you're just turning 65, or already enrolled in a plan, it's important to understand the differences in Medicare Advantage and Medigap plans.
by Josef Katz
Updated September 10, 2024
3 mins read
Our goal is to give you the tools and confidence you need to improve your health and finances. Although we may receive compensation from our partner insurance companies, whom we will always identify, all opinions are our own. CoverRight Inc. and CoverRight Insurance Services Inc. (NPN: 19724057) are collectively referred to here as "CoverRight".
Like most people looking at Medicare, you may be comparing Medicare Advantage (or Part C) plans versus Medigap (Medicare Supplement) plans.
This article will answer a common question – how to choose between Medicare Advantage and Medigap.
How do we compare Medicare Advantage plans to Medicare Supplement plans?
While Medicare Advantage and Medicare Supplement plans have are both sold by private insurance companies, they are fundamentally different:
- Medicare Advantage plans are alternatives to Original Medicare. They must offer the same coverage as Part A (Hospitalization) and Part B (Medical) at a minimum, and many offer additional benefits.
- Medicare Supplement plans fill in the ‘gaps’ of coverage, or out-of-pocket costs, not covered by Original Medicare.
You cannot have both Medicare Advantage and Medicare Supplement plans simultaneously. However, you can switch plans during designated enrollment periods.
Here’s how to choose between Medicare Advantage and Medigap.
Let’s now take a closer look at how they vary.
What are the differences between a Medicare Advantage and Medicare Supplement plans?
Is a Medicare Supplement better than a Medicare Advantage plan? The answer to this question depends on your specific circumstances.
| Feature | Medicare Advantage (Part C) | Medigap (Medicare Supplement) |
|---|---|---|
| Premiums | The average monthly premium is $18.50 plus Part B premiums, although 66% of plans available have a $0 premium. | Monthly premium ranges from $90 – $300+. |
| Coverage | Part A and Part B, plus many cover Part D (prescription drugs) and additional benefits. | Covers Part A and Part B only. Note: Medigap plans vary in their Part B coverage. |
| Choice of health care providers | Restricted to a network. See providers out-of-network will cost more. | No restrictions. You can consult any doctor who accepts Medicare. |
| Out-of-pocket exposure (deductibles, copays/coinsurance) | Yes, but with out-of-pocket limits. MA plan pays 100% after you reach the annual limit. | Original Medicare has no out-of-pocket limits. But the most popular Medigap plans cover 100% of out-of-pocket expenses. |
| First-dollar coverage | May need to pay a deductible before the MA plan starts coverage, depending on the plan. | Most popular Medigap plans require payment of Part B deductible before coverage begins. |
| Prescription drugs (Part D) | Covered by most MA plans | Not covered by Original Medicare. You can purchase a standalone prescription drug plan (PDP). |
| Referrals to see specialists | Typically require a referral from your primary care physician to go out-of-network. | Referrals not required. |
| Dental, vision and hearing benefits | Usually covered | Not covered |
Based on this list, is Medicare Supplement or Medicare Advantage a better option? Hopefully, this summary provides you with the information to decide.
How to choose between Medicare Advantage and Medicare Supplement?
Now that we have compared Medicare Advantage plans vs. Medicare Supplement insurance, here are some factors to consider:
| Feature | Medicare Advantage (Part C) | Medigap (Medicare Supplement) |
|---|---|---|
| Your current health | You are generally in good health, and don’t need a lot of healthcare services during the year or are comfortable staying within a network of doctors (i.e., getting managed care) | You have multiple of severe medical conditions and need maximum doctor flexibility and predictability in health costs |
| Budget | Medicare Advantage has low-premium and $0 premiums but you will pay out-of-pocket copays when you use services | Medigap has higher premiums but lower out-of-pocket costs. |
| Add-on benefits | 97% or more individual plans offer some vision, fitness, telehealth, hearing or dental benefits. | Not covered – must purchase separately |
| Flexibility | You are limited to a network of doctors. However, this does provide coordinated health care. | Offers flexibility in the choice of doctors. |
| Simplicity in coverage | All in one bundled plan. You only need to carry one card for all your services | You need to purchase multiple different coverages from different carriers and carry up to 2-3 insurance cards at one time |
| Foreign travel | Foreign emergencies covered by some plans. | Medicare Supplement plans typically cover foreign emergencies, up to a lifetime limit of $50,000. |
| Availability of plans | Depends on location. | Depends on location. |
| Switching plans | During Annual Enrollment Period, Medicare Advantage Open Enrollment Period or other Special Enrollment Periods available to you | You may get Medicare Supplement plan during the Medicare Supplement Open Enrollment Period (OEP) to access ‘guaranteed issue’ rights. After OEP, your chances you can switch at any time but will be subject to health questions and may be declined coverage if you have pre-existing or have higher premiums. Switching from Medicare Advantage to Original Medicare is only allowed during specific enrollment periods. However, some states enable year-round switching. |
Hopefully the review of the above factors will help you to decide between a Medigap or Advantage plan.
Remember that your health and financial situation may change over time, which could impact which plan is best for you. So, the question ‘how to choose between Medicare Advantage and Medigap’ may need to be revisited annually.
Final Words
How to choose between Medicare Advantage and Medigap? Choosing a suitable plan depends on your health, finances, risk tolerance, and personal preferences.
The team at CoverRight can help you to review the differences between Medicare Advantage and Medigap plans as outlined in this article, and make sure you’re choosing a plan that works for your particular preferences. Reach to connect with a licensed CoverRight insurance agent today.
