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Medigap vs. Medicare Advantage

When you signed up for Medicare, you likely didn’t realize how confusing it is. Original Medicare (Part A and Part B) provides hospital coverage and medical insurance. You can also add prescription drug coverage with Medicare Part D. Medicare Parts A, B, and D cover quite a bit of your medical expenses, but you still have copays, deductibles, and other out-of-pocket costs. You can limit some of those costs with Medicare Advantage (Part C) or Medigap. It’s important to understand how both work before deciding on the type of coverage you need.

Medigap Plans

Medigap is also referred to as Medicare Supplement Insurance. If you have Original Medicare (Part A and Part C), you can purchase a Medigap plan to lower your out-of-pocket costs. You will pay an additional premium if you purchase Medigap insurance. The premium will be separate from the premium you pay for Original Medicare and Medicare Part D, if you have it.

Medigap plans are categorized by letter and there are ten plans in all. You can choose from Medigap plans A-N. These plans are standard, regardless of where you are located or who you purchase the coverage from. That means if you buy Medigap Plan B, you will receive the same coverage as everyone else who also has Medigap Plan B, except if you live in Massachusetts, Minnesota, or Wisconsin. The plans are standardized in different ways in these three states.

While the benefits are standard in 47 states, the costs are not. One insurer might offer a more affordable plan than another, so comparison shopping is critical.

Medigap plans are not meant to provide full healthcare coverage. Instead, these plans fill in the gaps left by Original Medicare. Plans cover various costs, such as Part A and B coinsurance costs and deductibles. As of 2020, people who are new to Medicare cannot purchase a Medigap plan that covers the Part D deductible.

When to Enroll in Medigap

You can enroll in a Medigap plan at any time. However, it is best to get one during the Medigap Open Enrollment Period. The period of six months usually begins the first day of the month that you become 65 or older and you are enrolled in Medicare Part B.

If you enroll during this period, your policy will not be subject to underwriting. You cannot be denied coverage during this time, and you will not pay more than people in good health. If you wait until the open enrollment period is over, you can be turned down or charged more for coverage based on your health.

Medicare Advantage Plans

Medicare Advantage Plans are referred to as Medicare Part C. Many people find that Medicare Advantage plans are more affordable than adding a Medigap plan to Original Medicare. Medicare Advantage plans are sold by private insurance companies and must include the same benefits provided by Original Medicare, so you will still have Medicare Part A and Part B. However, most plans include prescription drug coverage (Medicare Part D) and other benefits as well.

Medicare Advantage plans work like private insurance health plans do. Most plans cover lab work, surgery, office visits, and more, and you will only have to pay a small co-pay.

Like standard health insurance, you can choose the type of plan you want. Plan availability depends on where you live.

Health Maintenance Organization (HMO) plans are very popular for Medicare Advantage recipients. If you choose one of these Medicare Advantage plans, you will have access to a network of providers. You need to choose providers within that network, or you will have to pay out of your own pocket for services.

If you want more flexibility, you can consider a Preferred Provider Organization (PPO) plan. You will still have access to a network, but you can go outside of the network as well. You won’t receive as much coverage when you go out of network, though. These plans do not require referrals if you want to see specialists.

Private Fee-for-Service (PFFS) plans are also an option in many places. The insurance company determines how much the plan will pay the providers and how much you will have to pay out of your own pocket.

You can also get a Medical Savings Account (MSA). These plans put money into a saving account that you can access to pay for medical expenses.

Finally, Special Needs Plans (SNP) are available for some people. These plans are only open to people who have specific diseases or certain characteristics. These plans are created to help those patients meet their unique medical needs.

Medical Advantage plans are not standardized, so comparison shopping is very important. Each plan has its own benefits and companies set their own premiums.

Main Differences Between Medigap and Medicare Advantage

Now that you have compared the two, you likely still have some questions. Look at the main differences between the two to get a better idea of which you need.


Medigap plans typically cost more than Medicare Advantage plans each month while also cover more out-of-pocket costs. However, Medicare Advantage plans typically provide lots of services that reduce the overall cost of healthcare. Because of that, Medicare Advantage plans are usually more affordable.


Medicare Advantage Plans are bundled. All of your coverage is on a single policy. Medigap plans are used alongside Original Medicare. If you add Medicare Part D coverage, that will be another separate policy. Some people do not like having so many policies, so they prefer Medicare Advantage.


Medicare Advantage plans operate like traditional insurance. You will likely need to find a provider inside of your network. Medigap plans are accepted by all providers who take Medicare.


Medicare Advantage plans usually only provide benefits within a certain region. Medigap plans provide coverage in all 50 states, and some even cover you if you travel abroad. If you spend lots of time traveling to other states or countries, you might save money by getting Medigap coverage with Original Medicare.

Choose the Right Plan for Your Needs

Choosing between Medigap and Medicare Advantage might seem confusing, but it doesn’t have to be. Instead of trying to figure it out on your own, let a licensed insurance agent help. The insurance agent will walk you through the process and help you choose the best plan for your needs and lifestyle.

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