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Written byJessica Martel
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Jessica is a freelance writer, professional researcher, and mother of two rambunctious little boys. She specializes in personal finance, women and money, and financial literacy. Jessica is fascinated by the psychology of money and what drives people to make important financial decisions. She holds a Masters of Science degree in Cognitive Research Psychology.
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Edited byAshley Cox
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7+ years in content creation and management
5+ years in insurance and personal finance content
Ashley is a seasoned personal finance editor who’s produced a variety of digital content, including insurance, credit cards, mortgages, and consumer lending products.
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Updated June 12, 2024
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Table of contents
A Medigap policy is supplemental coverage for people on Original Medicare. Medigap policies can cover your out-of-pocket expenses, like copays for doctor’s visits or deductibles for hospital stays. Medicare Advantage is an alternative to Original Medicare. If you’re on a Medicare Advantage plan, you won’t be eligible to buy a Medigap policy.
Another key difference between the plans is that Medigap allows you to see any provider that accepts Medicare, while Medicare Advantage typically requires you to visit an in-network provider.
If you’re trying to choose which plan is right for you, keep reading to learn the essential features of each plan and how they differ.
Introduction to Medigap and Medicare Advantage
Medigap, also known as a Medicare Supplement Insurance plan, is coverage you can buy from a private insurance company to help pay for out-of-pocket medical expenses that Original Medicare doesn’t cover.
Before you can buy a Medigap policy, you typically need to have Medicare Part A (hospital insurance) and Part B (medical insurance). If you need medical care, Original Medicare will pay its share of the approved healthcare costs, and then Medigap will pay your doctor the amounts not covered by your policy. You’re responsible for any remaining costs. Your policy will auto-renew each year as long as you continue to pay your premiums.[1]
Medicare Advantage plans — also known as “Part C” or “MA plans” — provide alternative coverage to Original Medicare. You can get a Medicare Advantage plan from a private company that’s approved by Medicare.[2]
Once you join Medicare Advantage, you pay a fixed premium each month to the insurance company. Different plans charge different amounts, and the rules can vary. Plan rules can also change from year to year.[3] The company has to notify you of any changes before the start of your next enrollment.
Essential features of Medigap
Medigap is meant to help you pay some of the costs that the Original Medicare plan doesn’t cover, including:[4]
Copayments
Co-insurance
Deductibles
You can choose from 10 different Medigap plans (Plans A–D, F, G, and K–N). Each plan provides different benefits, and you can buy the one that best fits your needs.
All Medigap insurance policies are standardized, meaning the insurance companies must provide the same benefits. The only difference between the policies is the amount you pay for premiums. This is why it’s important to compare between companies. Medigap policies are standardized differently in Massachusetts, Minnesota, and Wisconsin.
Your age, where you live, and the insurance company and plan you choose can affect the overall cost of your Medigap policy.[5] If you’re considering a Medigap policy, know that it only covers one person. If you want coverage for your spouse, you’ll have to purchase an additional policy.
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Learn More: When Does Medicare Coverage Start?
Essential features of Medicare Advantage
Medicare Advantage includes Part A, Part B, and often Part D (prescription drug coverage), plus some additional benefits, such as vision, hearing, or dental services, that Original Medicare doesn’t cover.
Out-of-pocket costs can vary, with some plans offering higher or lower costs for services. Each month, you have to pay your part B premiums, and some plans charge a plan premium. You’re also responsible for paying your deductible, co-insurance, and copayment.
A benefit of Medicare Advantage plans is they have a yearly limit for out-of-pocket services. Once you reach this limit, you don’t have to pay for any services for Part A or Part B coverage for the rest of the year.
Good to Know
A limitation of Medicare Advantage is that, in many cases, you can only use a doctor who’s part of the plan’s network. You also might need to get approval before your plan will cover certain services or drugs.
If you have a Medicare Advantage Plan, you can’t sign up for Medigap.
Comparing Medigap and Medicare Advantage Plans
The following table compares some of the key differences between Medigap (Medicare Supplement Insurance) and Medicare Advantage (Part C insurance).
▲▼ | Medigap (Medicare Supplement) ▲▼ | Medicare Advantage (Part C) ▲▼ |
|---|---|---|
| Purpose | Supplement to Original Medicare coverage | Alternative to Original Medicare coverage |
| Coverage | Covers out-of-pocket costs not covered by Parts A and B, including:
|
|
| Initial enrollment period | Six-month period beginning the month you turn 65 or older and have Part B coverage | Seven-month period beginning three months before the month you turn 65 and ending three months after |
| Premiums |
|
|
| Cost | Varies between insurance companies | Out-of-pocket costs vary; plans could have lower or higher costs for certain services |
| Provider access | Any healthcare provider that accepts Medicare | Typically must see an in-network medical provider (for non-emergency care) |
| Referrals | Don’t need referrals for specialists | Typically need referrals for specialists |
| Deductibles |
|
|
| Yearly limits | Original Medicare plans have no yearly limits. | Plans have a yearly limit on what you pay out of pocket for Part A and Part B. |
| Eligibility criteria |
|
|
| Pre-existing conditions |
|
|
Is Medigap or Medicare Advantage right for you?
Before you decide whether Medigap or Medicare Advantage is right for you, consider the following:
Determine who needs coverage. Medigap only covers one person. If you and your partner or spouse both want coverage, you’ll each have to buy a policy.
Review your healthcare needs. Think about your current health conditions and any future needs you might have. Use this information to determine the benefits you need. Do you want a plan that includes extra benefits, such as prescription drug coverage, vision, dental, or hearing care?
Understand cost. When calculating the cost of the plan, consider premiums, deductibles, co-insurance, and copayments.
Consider if you’re comfortable seeing any doctor. Do you want to have your choice of doctors, or are you comfortable going to healthcare providers only within your plan’s provider network?
Research the insurance company. You can contact your state’s insurance department to find out if there are any complaints filed against the company you’re considering.
Consider if you plan to travel outside of the U.S. Some Medigap policies offer emergency care coverage for foreign travel. Medicare Advantage plans generally don’t cover medical care outside of the United States.[6]
Seek professional help in decision-making. Trying to understand all the different plans and determine which is right for you is a complex process. You can contact your local State Health Insurance Assistance Program (SHIP) for free and unbiased help in choosing an insurance company.
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See More: 5 of the Best Sites to Compare Medicare
Medigap or Medicare Advantage FAQs
Trying to understand the differences between Medigap and Medicare Advantage and which plan is right for you can be complicated. For additional information about Medigap and Medicare, check out the answers to the questions below.
What are the main differences between Medigap and Medicare Advantage?
Medigap is a supplement to Original Medicare coverage, while Medicare Advantage is an alternative to Original Medicare. A key difference between Medigap and Medicare Advantage is that you can see the doctor of your choice with Medigap, while Medicare Advantage typically requires you to visit a healthcare provider within the plan’s network.
Who’s eligible for Medigap and Medicare Advantage plans?
People who are 65 or older, have Part A and Part B coverage, and are living in a state that offers the policy are eligible for Medigap coverage. Only people who are U.S. citizens or are lawfully present in the U.S., have Part A and Part B coverage, and live in the plan service area are eligible for Medicare Advantage.
What does Medigap cover that Medicare Advantage doesn’t, and vice versa?
Medigap covers out-of-pocket costs that aren’t covered by Part A and Part B coverage, including copayments, co-insurance, and deductibles. It typically doesn’t cover prescription drugs (Plan D). Medicare Advantage policies typically cover Plan D but don’t cover your deductible, co-insurance, or copayment.
Can you be enrolled in both Medigap and Medicare Advantage at the same time?
No. Enrollment in Medigap and Medicare Advantage at the same time isn’t permitted. It’s your choice to purchase Medigap or enroll in Medicare Advantage. It’s illegal for anyone to sell you a Medigap policy if you have a Medicare Advantage plan unless you’re switching back to Original Medicare.
How can you determine which plan, Medigap or Medicare Advantage, is right for you?
The right plan for you depends on your individual health needs and preferences. If you want help determining which plan is best for you, you can contact your local State Health Insurance Assistance Program (SHIP) for free and unbiased assistance.
Sources
- Medicare.gov. "Learn How Medigap Works."
- Medicare.gov. "Your health plan options."
- Medicare.gov. "Understanding Medicare Advantage Plane."
- Medicare.gov. "Learn what Medigap Covers."
- Medicare.gov. "Get Medigap Costs."
- Medicare.gov. "Compare Original Medicare & Medicare Advantage."
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Jessica Martel
Jessica is a freelance writer, professional researcher, and mother of two rambunctious little boys. She specializes in personal finance, women and money, and financial literacy. Jessica is fascinated by the psychology of money and what drives people to make important financial decisions. She holds a Masters of Science degree in Cognitive Research Psychology.
7+ years in content creation and management
5+ years in insurance and personal finance content
Ashley is a seasoned personal finance editor who’s produced a variety of digital content, including insurance, credit cards, mortgages, and consumer lending products.
Featured in