Medigap vs. Medicare Advantage: How They Differ and Which One Fits You
Medigap supplements Original Medicare and pays the cost-sharing gaps it leaves behind; Medicare Advantage replaces it with a private plan that bundles drugs and extras. Here is how the two differ, and which one fits your situation.
Every fall, during Medicare open enrollment, the same choice lands in millions of mailboxes: Medigap or Medicare Advantage. The two sound alike because both are sold by private insurance companies and both deal with the bills Medicare does not pay. But they work in opposite ways, and you can hold only one at a time.
Where the gap comes from
Original Medicare is the federal coverage: Part A for hospital stays, Part B for doctor visits and outpatient care, and Part D for prescription drugs, which you buy separately. Most people pay no premium for Part A after a full work record, while the standard Part B premium is set by the Centers for Medicare & Medicaid Services each year. Medicare pays its share of each bill; your share is the Part A and Part B deductibles, the 20 percent coinsurance on most Part B services, and there is no yearly cap on what you can owe. Medigap and Medicare Advantage are the two private routes for handling that exposure, and they take opposite approaches.
How Medigap works
Medigap, also called Medicare Supplement Insurance, sits on top of Original Medicare. A private insurer sells you one of the standardized lettered plans (A through N in most states; Massachusetts, Minnesota, and Wisconsin standardize theirs differently). The plan pays some or all of the cost-sharing Original Medicare leaves behind: copayments, coinsurance, and deductibles. Plans F and G also cover Part B excess charges, which is the extra amount some doctors may legally charge above the Medicare-approved rate.
Medigap is available only alongside Original Medicare. It does not work with Medicare Advantage, and insurers are not allowed to sell you a Medigap policy while you are enrolled in an Advantage plan. Two more fixed rules: Medigap never includes drug coverage, so you still need a separate Part D plan, and since January 1, 2020, Plans C and F have not been sold to people newly eligible for Medicare.
The timing of your purchase matters. The Medigap open enrollment period lasts six months, starting in the month you turn 65 and enroll in Part B. During that window the insurer must sell you any plan it offers, with no medical questions. Outside it, in most states the insurer can ask about your health and charge more or decline you, though state laws vary. You pay a monthly Medigap premium on top of your Part B premium. In return you keep the freedom of Original Medicare: any doctor or hospital in the country that takes Medicare, with no referrals and no networks.
How Medicare Advantage works
Medicare Advantage, or Part C, replaces Original Medicare rather than supplementing it. You join a private plan that Medicare pays to cover you, and the plan must cover everything Parts A and B cover (hospice care stays under Original Medicare). Most Advantage plans bundle drug coverage and add benefits Original Medicare skips, commonly dental, vision, and hearing.
The trade is structure. Advantage plans run on networks, usually HMO or PPO, and you generally pay the least when you stay in network. HMO plans typically require referrals to see specialists, and many services need prior authorization from the plan. On the cost side, plans often charge low or even zero-dollar premiums, though you still pay your Part B premium, and every plan has a yearly maximum out-of-pocket amount. Medicare caps how high that maximum can go, and CMS sets the cap each year.
Medicare grades these plans. CMS publishes star ratings for Advantage plans every fall, and the ratings can shift from year to year. You can join, switch, or drop an Advantage plan during fall open enrollment (October 15 through December 7) and again during the Medicare Advantage open enrollment period (January 1 through March 31).
Medigap vs. Medicare Advantage, side by side
| Medigap | Medicare Advantage | |
|---|---|---|
| What it is | Supplemental insurance that pays the cost-sharing Original Medicare leaves behind | A private plan that replaces Original Medicare and manages your care |
| Who qualifies or gets it | Anyone enrolled in Parts A and B; guaranteed issue during the six-month window starting at 65 with Part B | Anyone enrolled in Parts A and B who lives in the plan’s service area; enrollment during open enrollment windows |
| Costs | Monthly plan premium plus the Part B premium; higher premiums but lower bills at the point of care | Often low or zero plan premium plus the Part B premium; copays and coinsurance per service until the yearly out-of-pocket maximum, which Medicare caps |
| Pros | Any Medicare doctor or hospital nationwide, no referrals, no networks, and predictable costs; standardized benefits make plans easy to compare | One plan can bundle drugs, dental, vision, and hearing; low monthly premiums; a yearly cap on out-of-pocket spending |
| Cons | Higher monthly premiums; no drug coverage included; outside the open enrollment window, insurers in most states can use medical underwriting | Must generally stay in network; referrals and prior authorization are common; benefits and networks change every year |
The verdict: which one fits you
Medigap fits people who want freedom and predictability: any doctor or hospital in the country that takes Medicare, no referrals, and bills that rarely surprise you. It is the steadier choice if you travel often, see specialists, or can afford a higher monthly premium to keep out-of-pocket costs low.
Medicare Advantage fits people who want one plan that bundles drug coverage and extras such as dental and vision, and who prefer a low monthly premium in exchange for using the plan’s network. It works best if you are comfortable getting referrals and prior approvals, and you review the plan’s details each fall, since networks, drug lists, and costs change annually.
You cannot keep both. If you hold Medigap and want to try an Advantage plan, you have to leave Original Medicare for the Advantage plan, and your Medigap coverage ends. If you are in an Advantage plan and want Medigap instead, you return to Original Medicare first, then buy a Medigap policy, keeping in mind that outside your guaranteed-issue window the insurer can ask health questions in most states.
Explainer based on program rules published by the Centers for Medicare & Medicaid Services (Medicare.gov). Part B premiums, the Advantage out-of-pocket cap, plan premiums, and star ratings change annually.
