Medigap and Medicare Advantage offer different health insurance options. Which is best for a person will depend on their particular needs.
Medigap is supplemental insurance for people who have original Medicare. Medicare Advantage, also known as Medicare Part C, is an alternative to this plan.
Key factors that a person may wish to consider when comparing plans include:
- level of coverage
- flexibility in choosing healthcare providers
- costs
We may use a few terms in this piece that can be helpful to understand when selecting the best insurance plan:
- Deductible: This is an annual amount that a person must spend out of pocket within a certain time period before an insurer starts to fund their treatments.
- Coinsurance: This is a percentage of a treatment cost that a person will need to self-fund. For Medicare Part B, this comes to 20%.
- Copayment: This is a fixed dollar amount that an insured person pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
Medicare Advantage and Medigap plans offer different coverage options. Each plan has its own rules and benefits that a person should bear in mind when deciding which one best meets their needs.
Medicare-approved private insurance companies administer both Medicare Advantage and Medigap plans.
The main difference between the two is how they work alongside original Medicare.
Medigap plans work alongside original Medicare’s Part A and Part B to help with out-of-pocket expenses, such as deductibles, coinsurance, and copayments. Some other benefits, such as emergency international coverage, may also be available, depending on the plan provider.
Medicare Advantage plans combine original Medicare’s parts A and B, and the majority include coverage for prescription drugs. Advantage plans often also include other benefits not available with original Medicare, including vision, dental, or hearing coverage.
Medicare Advantage vs. Medigap comparison chart
The chart below highlights some of the key differences between these plan types.
| Medicare Advantage | Medigap | |
| Enrollment | Two open enrollment periods each year | People may only enroll when first eligible for Medicare, with some exceptions |
| Coverage | Bundled plans that include all the benefits of original Medicare and more | Plans help cover out-of-pocket costs associated with original Medicare’s parts A and B |
| Extra benefits | Many plans offer dental, vision, and hearing care | Plans may cover emergency care if a person travels overseas |
| In-network provider restrictions | Yes | No |
| Costs | Monthly premium, deductible, coinsurance, and copayment | Monthly premium |
| Income-related premiums | Yes | Yes |
| Prescription drug coverage | Often included | Not included |
Medigap and Medicare Advantage together
It is not possible for a person to have both Medicare Advantage and Medigap. The two plans do not work together.
An individual may use Medigap to help pay original Medicare’s copayment, deductible, and coinsurance costs, but they may not use it to pay Medicare Advantage’s out-of-pocket expenses.
If someone has a Medicare Advantage plan, it is against the law for a company to sell them a Medigap plan unless they intend to switch to original Medicare.
Although original Medicare pays for many of a person’s eligible healthcare expenses, it may not cover the entire amount.
Medigap is an insurance plan that supplements Medicare parts A and B. It can help fill the gaps that copayments, deductibles, and coinsurances can create.
One of the benefits of having original Medicare with Medigap is that a person may go to any doctor who accepts Medicare, meaning that most doctors within the United States are available to them.
People who frequently travel within the country may find this option beneficial. Some Medigap plans may also pay for emergency healthcare costs outside of the U.S., which may be valuable to some individuals.
There are, however, health issues and treatments that Medigap does not pay for, including:
- long-term care
- private nursing
- dental care
- hearing aids
- vision care and eyeglasses
Additionally, Medigap premiums may be higher than those of Medicare Advantage.
Medicare Advantage plans, also known as Medicare Part C, are an alternative to original Medicare. Private companies that Medicare approves can offer these plans.
Sometimes called bundles, the plans have to provide all of the benefits of Medicare parts A and B, and they often also include coverage for prescription drugs. In addition, some Medicare Advantage plans provide extras that original Medicare does not offer, including vision, dental, and hearing benefits.
One of the key benefits of Medicare Advantage plans is their costs. Premiums are generally lower, starting from $0, and the plans put a yearly cap on out-of-pocket costs. As a result, after a person’s medical expenses have exceeded the cap, they do not have to pay anything further for covered services.
However, it is worth considering that Medicare Advantage offers less flexibility in the choice of healthcare providers, so a person must usually choose from within their plan’s network. Visiting healthcare providers outside of the network could result in higher costs.
Having Medicare parts A and B is a requirement for enrolling in a Medigap plan. The best time to buy a Medigap plan is during the 6-month open enrollment period (OEP). This window automatically begins the month a person reaches the age of 65 years.
Once the OEP ends, the company offering the Medigap plan may decline coverage if a person has specific medical conditions.
If the company does not accept the person’s application until after the 6-month period, a higher monthly premium may apply.
Medigap plans may differ depending on location, so a person can use Medicare’s search tool to look at the Medigap plans available in a particular zip code.
The website provides a range of plans with different deductibles. Medigap plans are standardized, which means that they all provide the same basic benefits. However, some plans may offer additional benefits.
Once a person decides on a plan, Medicare will provide contact information for the company administering the plan. A person can then complete enrollment by contacting the company directly.
A person may be eligible for a Medicare Advantage plan if they are enrolled in original Medicare and are living in the service area of the plan they wish to join.
Medicare Advantage plans work in different ways, so it is advisable for people to compare all the available plans in their area. They can do this using Medicare’s find-a-plan tool.
After deciding on a specific plan, a person can enroll by doing one of the following:
- enrolling through the company’s website
- completing a paper enrollment form and then mailing it to the private insurer
- calling the plan provider to give them the enrollment information over the phone
There are three opportunities for a person to switch from Medicare Advantage to Medigap.
- During the initial enrollment period (IEP): This 7-month period begins the month before a person reaches 65 years of age.
- During the Medicare Advantage OEP: This OEP runs from January 1 to March 31 each year. Between these dates, a person can drop their Medicare Advantage plan, return to original Medicare, or enroll in a Medigap plan.
- Shortly after enrolling: When a person first becomes eligible for Medicare and enrolls in a Medicare Advantage plan, they have 3 months in which they can switch back to original Medicare and enroll with Medigap.
A comparison of Medigap and Medicare Advantage shows that both options have pros and cons. There is no best choice for everyone because people have different preferences and requirements.
Medigap provides greater flexibility when it comes to choosing healthcare providers, while Medicare Advantage often has lower premium costs. It is important for a person to examine all the differences carefully before making a decision.
Once an individual has chosen between Medigap and Medicare Advantage, they can enroll in the particular plan that suits their needs.