The biggest difference between Medicare Supplement Insurance, also known as Medigap, and Medicare Advantage is that with a Medigap plan, you have the freedom to see any doctor that accepts Medicare. With Medicare Advantage, you generally must get care within the plan's network of providers.
You also can't have Medigap and Medicare Advantage at the same time.
Here's what you should know.
Medigap vs. Medicare Advantage
What is Medigap?
Medicare Supplement Insurance, or Medigap, is insurance sold by private companies that fills the "gaps" in Original Medicare by covering some out-of-pocket expenses, such as deductibles and copays. Medicare beneficiaries pay a monthly premium for a Medigap plan, which can vary widely based on age and city. (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. The things to consider when choosing a Medigap company are price and reputation.
» MORE: Best Medicare Supplement Plan G companies
Compare Medigap plans
How Medigap works
Medigap covers some of the costs you’ll owe if you get care under Original Medicare. Different Medigap plan types cover different costs, but possible coverage includes:
Your deductible for an inpatient hospital stay of $1,632 in 2024.
Your copayment for each inpatient hospital day, such as $408 per day in 2024 for days 61 to 90.
Your copayment for each day in a skilled nursing facility, up to $204 per day in 2024 for days 21 to 100.
Your 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. And 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.)
» MORE: Compare Medicare Supplement Insurance plans
When to buy Medigap
Medigap can be purchased during the Medigap open enrollment period, which is the six-month period that starts the month you're 65 or older and have Medicare Part B. During this time, 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.
» MORE: Best Medicare Supplement Insurance companies
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 you 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.
» MORE: Best Medicare Advantage plans
Differences between Medigap and Medicare Advantage
Plan feature | Medigap | 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. | ✓ |
Overseas emergency medical care | For Plans C, D, F, G, M and N, with a lifetime limit of $50,000. | Only plans with travel benefits. |
Is it better to have Medicare Advantage or Medigap?
When choosing between Medicare Advantage and Medigap, 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.
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.
Consider Medicare Advantage if you:
Live in an area with an extensive network. Although Medicare Advantage plans generally require you to get care from their network of medical providers, that network may be sizable if you live in a large metro area. So 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 large medical bills if you need a lot of care. If you can't afford to buy a Medigap plan, you're probably 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.
Compare Medicare Advantage plans
💬 From our Nerds: Why would I choose Medigap over Medicare Advantage?
“If you have Original Medicare with Medigap, you can see any doctor who accepts Medicare. This can be important if you have a health crisis and want to see a specialist in another part of the country or a doctor that doesn’t accept Medicare Advantage.
“It’s important to consider this situation when you first sign up for Medicare because there’s a six-month Medigap open enrollment period when all companies must offer you a plan. If your health deteriorates later, you may not be able to get a Medigap plan.”
— Kate Ashford, lead writer covering Medicare
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.
