What is the difference between Medicare Advantage and Medigap?

While there are several types of Medicare coverage, two of the most common are Medicare Advantage and Medicare Supplement – also known as Medigap – plans. While both pay for expenses not covered by Original (“Governmental”) Medicare, you cannot be enrolled in both Medicare Advantage and Medigap coverage simultaneously, as they each serve different functions. There are also several important distinctions between Medicare Advantage and Medigap that you should know if you are looking to enroll in Medicare.

Medicare Advantage plans, also known as Medicare Part C or MA Plans, are a solid alternative to Original Medicare, combining Medicare Part A and Part B, and, in many cases, Medicare Part D prescription drug coverage. Medicare Advantage plans may also include additional benefits such as routine dental, vision, and hearing coverage. Medicare Advantage plans can be thought of as whole-life health plans that offer affordable, comprehensive coverage in a wide variety of services and specialties. A Medicare Advantage plan may be a better selection than Original Medicare for individuals needing specialty medical care due to the wide range of affordable coverage options included. 

While Medicare Advantage is intended to be a comprehensive alternative to Original Medicare, Medicare Supplement, or “Medigap,” plans are insurance designed to be purchased separately to work with Original Medicare. Despite all the benefits of Original Medicare, it does not cover all the costs associated with healthcare services and supplies. Medigap can help cover some of the remaining healthcare costs where there may be a gap in coverage, including coinsurance, deductibles, and copayments. When making your Medicare selections, it’s also important to consider that some Medigap policies offer coverage for services that Medicare does not cover, including travel outside of the United States. Still, Medigap generally does not cover long-term care, vision, dental, hearing aids, eyeglasses, Prescription Drug Coverage, or Private Duty Nursing. Depending on your unique healthcare needs, knowing the potential benefits and coverage lapses of a Supplemental plan could help you decide which Medicare coverage option is best for you. 

When trying to differentiate between the two options, you may be asking yourself,

Which is a better choice: Medigap or Medicare Advantage?

While the answer to this question will vary from person to person based on each individual’s unique healthcare needs, there are some helpful ways to compare Medicare Advantage and Medigap:

There are designated time periods during which individuals can enroll in or switch between Medicare Advantage plans. This includes your Initial Enrollment Period, the Advantage Open Enrollment Period, or the Annual Open Enrollment Period. On the other hand, Medicare Supplement plans can only be purchased after an individual turns 65 and enrolls in Medicare Part B coverage. In most instances, you can change your Medigap plan at any time, but this flexibility will vary by state.

You may be required to use in-network providers when enrolled in a Medicare Advantage plan. In contrast, Medigap plans do not typically impose network restrictions, allowing individuals with a Medicare Supplement plan to see any provider who accepts Medicare.

Medicare Advantage plans may have very low or no-cost premiums. In exchange for $0 premiums, enrollees may have copays, even for visits where they previously weren’t required. Medicare Supplement plans incur higher monthly premiums but involve low to no copays.

Medicare Advantage plans typically involve copays for medical services with maximum out-of-pocket protection. Medicare Supplemental plans, or Medigap, will often cover the costs of copay expenses so that enrollees may have very low or even no copays involved with medical services.

A Medicare Advantage plan can be a financially effective option, with plans typically including dental, vision, and hearing care options. A Medigap plan, however, does not include dental, vision, or hearing coverage. If an individual reviewing plan options is in need of dental, vision, or hearing care options, they will need to purchase this coverage separately from any Medigap plan.

Prescription drug coverage is included in many Medicare Advantage plans. These plans are known as Medicare Advantage Prescription Drug or MAPD plans and are part of the comprehensive offerings of Medicare Advantage. Conversely, no Medigap plan includes prescription drug coverage. For individuals who have purchased a Medicare Supplement plan, if they need prescription drug coverage, they will need to enroll in a Medicare Part D plan separately.