Medicare Advantage vs. Medicare Supplement (Medigap): Which Is Best?
Medicare Advantage plans are best if you want simplified, bundled coverage. You should get a Medigap plan with Original Medicare if you have an ongoing illness or you want more flexibility when it comes to choosing your doctor.
Medicare Advantage vs. Medicare Supplement: Which is right for you?
The right Medicare plan for you will depend on how much you value flexibility versus cost. You should also consider how often you visit the doctor and whether you think you'll need more medical care in the future.
Medicare Advantage plans are popular because they offer all-in-one coverage at a low cost. In most parts of the country, you can get a $0-per-month Medicare Advantage plan that includes prescription drug coverage, and dental and vision care.
By comparison, you'd have to buy separate dental, vision and drug (Medicare Part D) policies to get the same level of coverage if you had a Medigap policy with Original Medicare. However, you could save money in the long run with a Medigap policy if you need a lot of medical care since most Medicare Advantage plans have high costs when you go to the doctor.
Medicare Advantage plans typically restrict you to a network of doctors through an HMO or PPO. You can visit 98% of doctors nationwide if you have Original Medicare. You also don't need a referral to visit a specialist with Original Medicare.
It's important to remember that some Medicare Advantage companies like Blue Cross Blue Shield have large national networks of doctors. You also don't have to worry about getting a referral with some types of medical plans like PPOs.
Still, Original Medicare with a Medigap policy will typically give you more flexibility compared to a Medicare Advantage plan.
What are the differences between Medicare Advantage and Medigap?
With a Medicare Advantage plan, you get bundled coverage through a private company. This includes your regular Medicare benefits alongside extras like prescription drug coverage, vision and dental.
Medigap plans offer add-on coverage to Original Medicare. They help cover the parts of Original Medicare that you're normally responsible for paying.
Most Medicare Advantage plans restrict you to a network of doctors. With a Medigap plan, you can visit any doctor nationwide who accepts Medicare.
Medicare Advantage plans typically charge a low monthly rate compared to a Medigap plan. However, with Medicare Advantage, you'll pay a higher portion of the bill when you visit the doctor.
That makes Medicare Advantage a good choice for healthy people who rarely visit the doctor. Consider a Medicare Supplement plan if you have an ongoing illness.
With Original Medicare and a Medigap plan, you're less likely to have to fight to get a bill paid by your insurance. That's because Medicare Advantage plans deny claims at a higher rate compared to Original Medicare, according to the U.S. Department of Health and Human Services.
If you don't want to deal with the headache of appealing a denied claim, consider getting a Medigap plan with Original Medicare.
Coverage
Medicare Supplement plans, paired with Original Medicare, will usually cover much more of your medical bills compared to Medicare Advantage plans.
The most popular Medigap plans will cover nearly all of the costs you normally have to pay with Original Medicare. Original Medicare along with a Medicare Supplement plan will pay for nearly all of your normal health care costs.
With a Medicare Advantage plan, you're responsible for paying part of your bill when you visit the doctor up to your plan's yearly limit, called an out-of-pocket maximum. This means you could spend thousands of dollars more with a Medicare Advantage plan if you need a lot of medical care in a single year.
Keep in mind that Medicare Advantage plans often have extra benefits like coverage for prescription drugs, dental, vision and fitness programs. With a Medigap plan, you'd have to buy all of these coverage options separately.
You'll have access to the same services offered by Original Medicare (Parts A and B) regardless of whether you have Medicare Advantage or Medigap.
Medicare Part A pays for hospital stays, hospice, skilled nursing facilities and some home care. Part A is free for 99% of people on Medicare. As long as you've paid income tax for at least 10 years, you won't have to pay a monthly rate for Medicare Part A.
However, you have to pay $1,632 out of your own pocket for medical care before Part A kicks in. You're also responsible for other costs while you're using Part A called copays and coinsurance. Popular Medigap plans like F, G and N will help you pay for your Part A coverage.
Medicare Part B covers nonhospital medical care. That includes services like visits to the doctor, tests, treatment and emergency care. It also pays for some medical devices like wheelchairs and walkers.
Unlike with Part A, you have to pay a monthly rate for Medicare Part B. In 2024, that's $174.70 per month. There's an extra surcharge called IRMAA that you have to pay if you make more than $103,000 as an individual or $206,000 as a married couple.
Medicare Part B has a $240 deductible that you have to pay each year before most medical care begins. Medigap Plans F and C will pay this deductible for you. However, you need to have become eligible for Medicare before Jan 1, 2020, to buy these plans.
Cost
On average, Medicare Advantage plans cost $27 per month. Medigap Plan G costs $148 per month.
Medicare Supplement plans tend to have higher monthly costs compared to Medicare Advantage plans. However, when you get sick, you'll pay more with a Medicare Advantage plan than you would with a Medigap plan.
For example, Medicare Advantage plans can charge you up to $8,850 per year in costs that you're responsible for, called an out-of-pocket maximum. Popular Medigap plans like F, G and N have minimal costs that you have to pay.
Medicare Advantage plans work like traditional health insurance plans. These plans have monthly rates and costs that you're responsible for paying.
On the other hand, Medicare Supplement plans are add-on coverage to Original Medicare. Medigap plans put a lower cap on your total medical spending. In other words, they exist to protect you against high hospital bills.
Access to health care
A Medicare Supplement plan with Original Medicare lets you see more doctors than a typical Medicare Advantage plan.
One of the biggest advantages of using a Medigap plan with Original Medicare is that you'll be able to go to every doctor who participates in Medicare. That is about 98% of all doctors nationwide. You also won't need a referral if you need to visit a specialist, such as a cardiologist.
On the other hand, Medicare Advantage plans may restrict you to a network of doctors if you choose an HMO (health maintenance organization) plan. You'll have more flexibility if you choose a Medicare Advantage PPO (preferred provider organization) plan, but you'll still have to pay more if you choose to go out of your network.
- Health maintenance organization (HMO): You can only visit doctors who are in your network unless you need emergency care. You also usually need to choose a primary care doctor. You'll need a referral from your primary care doctor to see a specialist.
- Preferred provider organization (PPO): You can go to doctors outside of your network, but you'll pay a higher cost compared to in-network doctors. You don't need a referral to see a specialist.
Because there are major differences between different networks and the coverage you would get, it's a good idea to compare networks so you can choose one that offers the best benefits for your health situation.
What is Medicare Advantage?
Pros
- All-in-one coverage
- Low monthly costs
- Included extras, like dental care
Cons
- You can pay thousands of dollars each year in out-of-pocket costs
- Limited network of doctors
Medicare Advantage, or Medicare Part C, is an alternative to Original Medicare that's sold by private companies. This plan is a bundled policy that includes the benefits you would get with Part A (inpatient care), Part B (medical care) and often Part D (prescription drugs). Medicare Advantage plans usually offer extra benefits that Original Medicare does not cover, such as vision, hearing, dental care and fitness programs like SilverSneakers.
You are only eligible to get Medicare Advantage if you have already enrolled in Medicare Parts A and B. Once you have enrolled, you can then begin to look at the different Medicare Advantage policies offered by private health insurance companies.
What is Medicare Supplement (Medigap)?
Pros
- Can go to nearly any doctor
- Cheap costs when you visit the hospital
- Same coverage no matter which company you choose
Cons
- Expensive
- Prescription coverage sold separately
Medicare Supplement, sometimes called Medigap, is an add-on health insurance plan that helps you pay for the costs you're responsible for with Original Medicare.
These include your Part A and B deductibles, copays and coinsurance and coverage for foreign emergencies.
Medigap plans are organized by different letters: Plans A, B, C, D, F, G, K, L, M and N. Each plan has different benefits and costs. The best Medicare Supplement plan for you will offer the right balance of cost and coverage.
Although you can choose from 10 different plan letters, most people choose either Plan F, G or N.
Medigap policies are offered through private health insurance companies, such as Kaiser Permanente or UnitedHealthcare. However, all companies are required by law to offer the same coverage by plan letter. For example, Plan K from Kaiser Permanente has the same coverage as Plan K offered by UnitedHealthcare.
Frequently asked questions
What's the main difference between Medicare Advantage and Medicare Supplement plans?
A Medicare Advantage plan offers low-cost bundled coverage that includes all the services you'd get through regular Medicare along with extras like prescription drug coverage, vision, dental and fitness programs. Medigap plans help you cover the medical costs that you're responsible for paying with Original Medicare (Parts A and B).
Is Medicare Advantage better than Medicare Supplement?
A Medicare Advantage plan is better if you want cheap monthly rates and bundled coverage. On the other hand, you should consider a Medicare Supplement plan with Original Medicare if you value flexibility when it comes to choosing your doctor or if you think you'll need a lot of medical care in the future.
Why do people choose Medigap over Medicare Advantage?
Medicare Supplement (Medigap) plans give you greater flexibility when it comes to choosing your doctor compared to a Medicare Advantage plan. You also will likely pay less money overall with a Medigap plan if you need a lot of medical care.
Methodology and sources
Information about Medicare Advantage claim denials came from the Office of the Inspector General through the U.S. Department of Health and Human Services. Rules regarding Medicare Supplement and Medicare Advantage coverage requirements came from the Centers for Medicare & Medicaid Services (CMS) and Medicare.gov. Other Medicare statistics were taken from KFF.
Cost data for Medicare and Medicaid plans was taken from CMS public use files.
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