Medicare Advantage vs. Medigap: What’s the Difference and Which Is Better?

A $0 Medicare Advantage premium can sound attractive, but the lowest monthly premium is not necessarily the lowest overall healthcare cost.

The real decision in Medicare Advantage vs. Medigap comes down to provider access, out-of-pocket costs, prescription coverage, prior authorization, and how much flexibility you want when receiving care.

For many beneficiaries, the choice can also become harder to change later.

Medicare Advantage vs. Medigap: The Basic Difference

Medicare Advantage (Part C) is a private Medicare alternative that provides Part A and Part B benefits through a Medicare-approved plan. Most plans also include Part D prescription drug coverage and may offer additional benefits such as dental, vision, hearing, transportation, or fitness programs.

Learn more from Medicare.gov: Medicare Advantage Plans.

Medigap, also called Medicare Supplement Insurance, works with Original Medicare. It helps pay some costs that Original Medicare does not fully cover, including certain deductibles, coinsurance, and copayments.

See Medicare.gov: Medigap policies.

You generally cannot have Medicare Advantage and Medigap at the same time.

At a glance

Medicare Advantage: Lower Premiums, More Plan Rules

Medicare Advantage plans often advertise $0 monthly premiums, but beneficiaries still generally pay the Medicare Part B premium.

The bigger consideration is what happens when you actually use healthcare.

Depending on the plan, you may pay copayments or coinsurance for:

• Primary-care visits
• Specialists
• Hospital stays
• Imaging
• Physical therapy
• Outpatient procedures
• Other covered services

Medicare Advantage plans also have an annual out-of-pocket maximum for covered Part A and Part B services, providing an important financial safeguard.

However, costs and rules vary significantly between plans.

Many plans use HMO or PPO networks. HMOs generally require members to stay in-network except for emergencies and certain other situations. PPOs may provide out-of-network coverage but typically at a higher cost.

Before enrolling, check whether your preferred doctors and hospitals participate.

For more on healthcare affordability, see our guide to Are Affordable Health Plans Really Affordable?.

Medigap: Higher Premiums, More Predictable Costs

Medigap policies generally cost more each month, but they can reduce your exposure to Medicare deductibles, coinsurance, and copayments.

Medigap policies are standardized by letter in most states. For example, Medigap Plan G from one insurer must provide the same basic benefits as Plan G from another insurer. Premiums, discounts, underwriting practices, and customer service can still differ.

One major advantage is provider flexibility.

If a doctor or hospital accepts Original Medicare, you can generally use your Medicare coverage there. This can be particularly valuable if you:

• Travel frequently
• Live in multiple states during the year
• Want access to specialists nationwide
• Receive care at major academic medical centers
• Prefer not to deal with narrow provider networks

However, Medigap generally does not include prescription drug coverage. Most beneficiaries need a separate Part D plan.

Read Medicare.gov: How Medigap works with Medicare.

Prior Authorization Can Make a Difference

One of the biggest practical differences between Medicare Advantage and Original Medicare is how plans manage certain services.

Medicare Advantage plans may require prior authorization before covering certain procedures, imaging studies, medications, rehabilitation services, or other care.

That does not mean every Medicare Advantage member experiences delays, and Original Medicare also has coverage rules. But prior authorization can become particularly important for people who expect frequent specialist care or complex treatment.

Medicare has increased oversight of Medicare Advantage prior authorization and coverage decisions in recent years.

See CMS: Medicare Advantage and prior authorization resources.

Prescription Drugs and Extra Benefits

Most Medicare Advantage plans include Part D prescription coverage, which can simplify Medicare enrollment.

But beneficiaries should check the plan’s formulary before enrolling.

A medication may be:

• Covered at a higher cost-sharing tier
• Available only through certain pharmacies
• Subject to prior authorization
• Subject to step therapy
• Covered differently depending on the plan

Medigap does not generally cover outpatient prescription drugs. Beneficiaries typically purchase a separate Part D plan.

Medicare Advantage may also offer benefits such as dental, vision, hearing, transportation, meals, or fitness programs. But don’t judge these benefits by the headline alone. Check annual limits, networks, eligibility requirements, and what services are actually covered.

Learn more about prescription drug benefits and medication costs on GoodMorningHealthcare.

When Should You Buy Medigap?

Timing matters.

The Medigap Open Enrollment Period begins when you are 65 or older and enrolled in Medicare Part B. It lasts for six months.

During this period, federal rules generally provide important protections against medical underwriting when purchasing Medigap.

After this period, you may have fewer protections. Depending on your circumstances and state, an insurer may be able to use medical underwriting, charge more, or decline an application.

Read Medicare.gov: When can I buy a Medigap policy?.

This is one reason switching from Medicare Advantage to Original Medicare later requires careful planning.

Medicare Enrollment Dates to Know

Several Medicare enrollment periods can affect your choices.

October 15–December 7: Medicare Annual Enrollment Period. You can switch Medicare Advantage or Part D plans for the following year.

January 1–March 31: Medicare Advantage Open Enrollment Period. People already enrolled in Medicare Advantage can generally make one plan change or return to Original Medicare.

However, returning to Original Medicare does not necessarily guarantee that you can buy Medigap coverage on favorable terms.

Check official dates and rules at Medicare.gov: Medicare enrollment periods.

Medicare Advantage vs. Medigap: Which Should You Choose?

There is no single best option for everyone.

Medicare Advantage may be a better fit if you:

• Want a lower monthly premium
• Are comfortable using a provider network
• Want prescription coverage bundled into one plan
• Value dental, vision, hearing, or other supplemental benefits
• Prefer an annual out-of-pocket maximum

Medigap may be a better fit if you:

• Want broad access to Medicare providers
• Travel frequently
• See multiple specialists
• Want more predictable medical expenses
• Prefer Original Medicare over a managed-care network
• Are willing to pay a higher monthly premium

The most important question isn’t “Which plan is cheapest?”

It is “Which coverage would I be most comfortable using if I suddenly needed significantly more healthcare?”

How to Compare Medicare Plans

Before enrolling, compare:

1. Monthly premiums
2. Expected copays and coinsurance
3. Annual out-of-pocket maximum
4. Doctors and hospitals in the network
5. Prescription drug coverage and formulary
6. Prior authorization requirements
7. Out-of-network costs
8. Dental, vision, hearing, and other benefits
9. Coverage when traveling
10. Your ability to change coverage later

You can compare Medicare plans directly through Medicare.gov Plan Compare.

Free, unbiased Medicare counseling is also available through the State Health Insurance Assistance Program (SHIP). Find your state’s program through SHIP National Technical Assistance Center.

The Bottom Line

Medicare Advantage vs. Medigap is ultimately a choice between different ways of managing healthcare costs and access.

Medicare Advantage can provide lower premiums and additional benefits, but usually comes with network restrictions and plan-specific utilization rules.

Medigap generally costs more each month but can provide broader provider access and more predictable medical expenses when paired with Original Medicare.

Before choosing, look beyond the premium. Check your doctors, hospitals, medications, expected healthcare needs, travel plans, and potential out-of-pocket costs.

The cheapest Medicare plan today may not be the most affordable plan when you need the most care.