Medicare Advantage vs Medigap (Medicare Supplement)

Recently in our popular New-to-Medicare webinar, several people asked some version of this question in our chat box: Medicare Supplement vs Medicare Advantage – how do you choose?

What is the difference between Medicare Advantage and Medicare Supplement? Can you have a Medicare Advantage plan and a supplemental plan at the same time? I’ve answered these questions hundreds of times in my career, so in this post, I’ll guide you to the answers.

As you may know by now, Medicare which is a federal government health insurance program in the United States doesn’t cover everything. Most people buy additional insurance to bridge the gaps. When considering Medigap vs Medicare Advantage, it’s important to understand that both types of Medicare plans will help to reduce your out-of-pocket spending.  

After all, who wants to come up with a $1,676+ deductible each time you enter the hospital? Or shell out 20% of the cost of an expensive MRI?

The two main coverage types you can buy to help with this are Medicare Advantage or Medigap (Medicare Supplement) plans. It’s important that you know how each type of coverage works, so you can select the right plan for you.

Medicare Advantage vs. Medigap (Medicare Supplement): Choosing a Winner

Though both policies help you cover your gaps in Medicare, they are designed very differently.

Medigap vs Medicare Advantage

Medicare supplements pay as secondary insurance to Medicare Part A and Part B. This means they pay after Medicare first pays its portion of the bill. You stay enrolled in Original Medicare, and Medicare sends the remainder of your bills to your supplemental company. Then the supplement company pays its share according to which plan you are enrolled in. Each Medigap plan provides different benefits, and the top three most popular plans are Plan F, Plan G, and Plan N.

Medicare Advantage plans, on the other hand, are entirely separate from Medicare. When you enroll in a Medicare Advantage policy, you receive your benefits from the plan, not Medicare. You agree to use the plan’s network of providers except when you need emergency care. You’ll pay copayments for your health care treatment as you go along. Think of these plans as an alternative to Original Medicare.

Looking at this Medicare Supplement vs Medicare Advantage chart, let’s explore a bit more about these coverage options to understand the differences between the two.

About Medicare Supplement Plans

Medicare supplement plans are also called Medigap plans. Having a Medigap policy means you are still enrolled in Original Medicare as your primary health coverage.

You can see any provider that participates in Medicare, regardless of which supplement company you choose. A primary care doctor does not need to be chosen with a Medigap plan, unlike HMO Advantage plans. You have access to all the Medicare providers nationwide – no referrals necessary. If you enroll in a comprehensive plan like Plan F or Plan G, you will have very little out of pocket. Not even doctor copays or coinsurance! Since Medicare covers medically necessary doctor visits, specialist care, other office visits, surgery, procedures, and exams, your Medicare Supplement plans will as well.

When you enroll, your Medicare supplement insurance company notifies Medicare that you have purchased a policy. Thereafter, as we described earlier, when Medicare pays its portion of your bills, it will automatically send the remainder of your bill to your Medicare Supplement insurer.

It’s seamless, with no claim forms for you to file.

Freedom of Access & No Referrals Necessary

Medicare Supplement insurance policies also offer you the most freedom of access to providers. You have the freedom to choose your own doctors and hospitals from among the 900,000+ Medicare providers in the country. Patients do not need referrals to see specialists on this type of coverage.

Because these plans offer you the most freedom and flexibility, they have higher premiums than Medicare Advantage plans. In the DFW area, for example, a female, non-tobacco user turning 65 might pay around $100 – $150/month for Plan G in 2025.

It depends on which Medigap plan is chosen and whether that individual uses tobacco. Plans and rates also vary by region, age, and sometimes gender, but our agency can quote over 30 insurance carriers in 49 states. We can also check to see which carriers offer household discounts that might give you the opportunity to reduce your monthly premiums.

Additionally, some Medigap plans provide foreign travel emergency coverage when enrollees are outside of the U.S. Insurers will cover 80% of the cost for emergency services once the enrollee pays the $250 deductible.

Your Retail Drug Coverage is Separate

Medigap plans cover medications administered in a hospital setting, such as injectables or chemotherapy drugs. They do not cover retail medications though, so most beneficiaries will enroll in a separate Medicare Part D plan for prescription drug coverage. Part D plans are available in every state starting at around $10/month. If you fail to enroll in a Part D plan and do not have creditable coverage, you will receive a late enrollment penalty when you apply in the future.

Medigap Enrollments

If you enroll in a Medigap plan during your one-time open enrollment window (within 6 months of your Part B effective date), there are no health questions. The insurance company will approve your application. A majority of Medigap enrollees will enroll in a Medigap plan during this window.

There are also no waiting periods or pre-existing condition exclusions when you apply during this window. If you miss this window and apply later on, then you will usually be required to answer a number of medical questions and be underwritten. Underwriting rules will vary with each carrier and state. The underwriter at the insurance company can accept or decline you based on your medical history.

About Medicare Advantage 

More than 54% of beneficiaries choose to enroll in Medicare Advantage policies, which are private insurance plans. They usually have lower premiums than Medigap plans….sometimes even a $0 premium on some plans in some areas. There are several kinds of Advantage programs such as HMOs, PPOs, PFFS (private-fee-for-service), and SNPs (Special Needs Plans).

When a plan has a $0 premium, it means that you will pay no additional premiums for the plan itself. You will still pay for your Part B premiums monthly.  A beneficiary must be enrolled in both Medicare Part A and Medicare Part B to be eligible for a Medicare Advantage plan. However, you don’t need to enroll in a Part D plan since most Advantage plans include prescription drug benefits.

Why would any company offer a $0 premium plan? Because you agree to use the plan’s network providers to get your care. This means the insurance company has more control over your choice of providers and facilities with whom they negotiate contracted rates.

Check Your Doctors

It’s important to check with your doctors first to see if they are in the plan’s network as well as your go-to hospital facility. This is especially important if the Advantage plan you are considering is an HMO (health maintenance organization) plan, which only covers in-network doctors aside from emergencies. You will want to do your homework on this and search physicians around your location to make sure they accept your plan. You will also want to note that PPOs can offer a broader range.

Look for one with a network that has plenty of providers in your service area. According to the Kaiser Family Foundation, a Medicare beneficiary has more than 30 Advantage plans on average available to them in their zip code.

Your Medicare Advantage insurance company will pay your healthcare bills instead of Medicare paying them.  You will pay copays for the services you obtain from providers in the plan’s network as you go along. Generally, the copays are reasonable, but you’ll want to review them before you enroll to make sure. The plan has the ability to determine which services will have restrictions, such as prior authorization, so you’ll make sure you understand your benefits fully.

These copays can vary from plan to plan as well. For instance, one plan might charge $40 for a specialist visit while another plan charges $50. Your copays add up to meet your plan’s maximum out-of-pocket limit.

Additionally, Advantage plans can cover benefits that Original Medicare does not cover. Those benefits include routine dental, vision, and hearing services, transportation, gym memberships, telehealth services, and over-the-counter items. Some plans may even provide coverage for hearing aids.

There are no health questions when applying for a Medicare Advantage plan. There are certain times of year that are designated for enrolling in, dis-enrolling from, or changing your Advantage plan.

Check the Drug Formulary

One of the differences between Medigap vs Medicare Advantage plans is that many also include Part D coverage, so there is often no need to buy a separate drug plan. Many people enjoy the convenience of not paying another premium for a drug plan.

Just like when you verify your doctors are in your plan’s network, you’ll also want to verify that your medications are covered by the plan’s formulary.

Medicare Advantage plans have specific enrollment periods, such as the Medicare Advantage Open Enrollment. If you enroll in a plan, Medicare locks you into that plan through December 31st. You can change mid-year only if a circumstance gives you a special election period, such as moving out of state. This makes it very important that you choose a plan wisely. 

Do your homework on this! (or call us, and we’ll do it for you)

Keep in mind, too, that you must be enrolled in both Medicare Parts A and B to be eligible for Medicare Advantage. Enrolling in Medicare Advantage does NOT mean you get to skip the premiums that you are already paying for Part B. You will continue to pay for Part B.

Know Your Out-of-Pocket Maximum

All Medicare Advantage policies have an Out-of-Pocket (OOP) Maximum Cap to protect you, which limits your costs during the year. In 2025, Medicare has declared that this maximum cannot be any higher than $9,350. There will be many years where you won’t come near this, but if you develop a serious illness, like cancer, you can reach it very quickly. However, many Medicare Advantage plans have OOP maximums that are lower than the $9,350 limit.

Check the plan’s Summary of Benefits to find out what the OOP Maximum is on the plan you are considering and other information on your potential costs. Then ask yourself- “Do I have enough savings for a rainy day? Can I meet this OOP Maximum if I had to in a year of bad health?”

If the answer is yes, then Medicare Advantage may work fine for you. If the answer is no, then you may look into Medigap options to find the most cost-effective plan for your needs.

Changing Between Medicare Advantage vs. Medicare Supplement Plans

Many people ask me whether they can start with Medicare Advantage and change to Medigap coverage later if they get sick or need more coverage. That sounds great, right? Just buy the cheapest insurance now until you get sick, and then switch back to the more comprehensive insurance?

This is important. It doesn’t work that way. If you leave a Medigap plan to go on Medicare Advantage coverage instead, you may not be able to get back into a Medigap plan later.

You might be outside of your one-time open enrollment window by then, and that means Medigap insurance companies can ask health questions on your application. The insurance carriers can decline you for certain health conditions or even medications that you take, so be aware of this before making any changes. However, there are certain circumstances you should be aware of before you are eligible for Medicare.

Trial Right Exception

An exception: There is a trial period for people who try Medicare Advantage for the first time at 65. If you decide to dis-enroll from the plan and go back to Original Medicare within the first 12 months of Medicare Advantage coverage, then you can return to your Medigap plan with no underwriting. After the 12 months is up, then you are subject to underwriting.

Under 65 Exception

Another exception is for people under age 65 who got Medicare early due to a disability. Anyone eligible for Medicare can enroll in an Advantage plan, but many states do not offer all Medigap plans to those under 65 because Federal law does not require Medigap coverage for those under 65. However, some states, including Colorado, California, Maine, Minnesota, Wisconsin, Oregon, and Missouri, offer all Medigap plans to those who qualify for Medicare due to certain disabilities.

When the person turns 65 and becomes eligible for Medicare based on age instead of disability, they will have a second open enrollment window. They can then change from Medicare Advantage to Medicare Supplement without underwriting.

My Best Tips and Advice After Helping 50,000+ People

We’ve worked with thousands of people over the years, and here is my best tip. Plan for a rainy day. Medicare Advantage plans can be quite expensive if you treat for something serious, like cancer, as you could pay 20% of chemotherapy or radiation costs up to the plan’s annual out-of-pocket maximum.

That maximum can be as high as $9,350 out of your own pocket – per year! Take the money you would have spent on a higher Medigap plan premium and store it in a savings account each month. This savings fund would be a safety net if you were diagnosed with an expensive health condition.

Medicare Supplemental plans have more predictable back-end spending. For example, with a Medigap Plan G, you know for a fact that you will never pay more than the Part B deductible each year for Medicare-approved services. But they have higher premiums that do increase each year.

Adults who qualify for Medicaid due to low income may consider enrolling in a Medigap or Medicare Advantage plan unless they are a Qualifying Medicare Beneficiary (QMB). In some situations, Medicaid will only help cover the Part B premium, which leaves you responsible for the cost-sharing expenses.

Every situation is different. Contact a Boomer Benefits agent to help you decide. Our service is free.

Watch the full Medigap vs. Medicare Advantage Video Playlist here:

Get Help Choosing Between Medicare Advantage vs. Medigap

Still asking yourself, “Should I get Medigap or Medicare Advantage?” It’s critical to compare the costs and benefits of each type of plan in relation to your personal healthcare needs and budget as you approach Medicare eligibility. A broker that specializes in both kinds of choices can help you evaluate your options. Some of the key factors for comparison are:

• Monthly premiums
• Plan deductibles, if any
• Expected costs of healthcare services on each plan
• How often you use healthcare services
• Areas where you will need access to care
• Expected copays for your medications
• Potential out-of-pocket spending for you on Medigap vs Medicare Advantage
• Remember, you get what you pay for

Finally, we know that checking the provider networks and drug formularies for each plan can take many hours. Simplify your search by having a Boomer Benefits licensed insurance agent do this for you. We’ve helped tens of thousands of people like you with their plan options. We can search Medigap vs. Medicare Advantage plans in your area so you can choose the right plan for your needs.

We’ll be able to quickly tell you which plans your doctors take and whether your medications are covered. Working with one of our agents also gives you back-end policy support because we offer a Client Service Team for our clients. We assist you in resolving things like billing issues, and that’s why we have thousands of five-star reviews online here, on Google, on Facebook, and in other places.

Key Takeaways

• Medicare Supplement and Advantage plans differ significantly as Supplement plans are secondary plans, and Advantage plans replace your Original Medicare.
• Both are offered by insurance carriers rather than the federal government, so there are many options.
• If you want to change between the two, you must do so during specific times of the year or specific situations.

Call 817-249-8600 for help today!