The core difference: how each one works

Medicare Advantage (Part C) is an alternative way to receive your Medicare benefits. A private insurance company runs the plan and handles your coverage. You pay a monthly premium to that company, and they cover your hospital, doctor, and prescription drug costs — usually bundled together. You must use doctors and hospitals in their network, and you typically pay a copay or coinsurance when you visit.

Medicare Supplement (Medigap) is insurance you buy to fill the gaps in Original Medicare (Parts A and B). You keep your Original Medicare coverage and add a Medigap policy on top. The supplement pays some or all of the costs that Medicare does not cover — deductibles, copays, and coinsurance. You can see any doctor or hospital that accepts Medicare, anywhere in the country.

The choice between them comes down to what matters most to you: lower monthly premiums and bundled services, or freedom to choose any doctor and predictable out-of-pocket costs.

Key Takeaways

  • Medicare Advantage has lower or no monthly premiums but requires you to use in-network doctors and hospitals, and costs vary by visit.
  • Medicare Supplement costs more per month but lets you see any doctor anywhere and typically has fixed copays or coinsurance amounts.
  • Medicare Advantage includes prescription drug coverage; with Original Medicare and Medigap, you must buy a separate Part D plan.
  • You can switch between Medicare Advantage and Medigap during the annual enrollment period (October 15 to December 7) or if you have a may have access to life event.
  • Your choice depends on your health, how often you see doctors, whether you travel, and which doctors you want to keep.

Monthly costs: premiums, copays, and out-of-pocket limits

Medicare Advantage plans often have no monthly premium or a low one — sometimes $0 to $50 per month. However, you pay when you use services: a copay for a doctor visit (typically $10 to $50), a copay for urgent care, and coinsurance for hospital stays. Most Medicare Advantage plans have an out-of-pocket maximum, usually between $5,000 and $7,500 per year. Once you hit that limit, the plan covers 100 percent of covered services for the rest of the year.

Medicare Supplement plans have higher monthly premiums — often $100 to $300 or more, depending on your age and the plan letter (A, B, D, G, K, L, M, or N). In exchange, your out-of-pocket costs are much lower and more predictable. Plan G, the most popular, covers most of your deductibles and copays. You pay the premium and your doctor visit copay (if any), and the supplement covers the rest. There is no annual out-of-pocket maximum because the plan straightforward pays what Medicare does not.

The math depends on your health. If you rarely see a doctor, Medicare Advantage saves money. If you have chronic conditions and see doctors frequently, the higher Medigap premium may cost less overall than hitting the Medicare Advantage out-of-pocket maximum.

Network restrictions and doctor choice

Medicare Advantage plans operate like HMOs or PPOs. You choose a primary care doctor from the plan's network, and you must see in-network providers for most care. If you see an out-of-network doctor, you pay more or the plan does not cover it at all. Some plans cover out-of-network emergency care, but routine care outside the network is your responsibility. If you move or travel frequently, you may find yourself without coverage in a new location.

Medicare Supplement works with Original Medicare, which is accepted by nearly all doctors and hospitals in the country. You do not choose a primary care doctor, and you do not need referrals. You can see any specialist you want. If you travel or move, your coverage goes with you because it is not tied to a network.

This matters most if you have a doctor you want to keep, if you live part of the year in another state, or if you travel often. It also matters if you live in a rural area where Medicare Advantage networks are thin.

Prescription drug coverage

Medicare Advantage plans include prescription drug coverage (Part D) as part of the package. The copay for a drug varies by plan and by which tier the drug is on — typically $5 to $50 per prescription. You cannot buy a separate Part D plan if you have Medicare Advantage.

If you have Original Medicare and a Medigap plan, you must buy a separate Part D prescription drug plan. You choose from dozens of plans, each with different copays and formularies (the list of covered drugs). Part D premiums range from about $7 to $100 per month, depending on the plan and your income. Some Medigap plans (C, D, G, and M) help cover the Part D cost-sharing, but you still need to enroll in Part D separately.

If you take many medications or expensive drugs, compare the total cost of Medicare Advantage drug coverage against the cost of a Medigap plan plus a Part D plan. The answer is not always obvious.

When you can switch and what happens to your coverage

You can change from Medicare Advantage to Medigap (or vice versa) during the annual enrollment period, which runs from October 15 to December 7 each year. Changes take effect January 1. You can also switch if you have a may have access to life event — you move out of the plan's service area, you lose employer coverage, or your plan is discontinued.

If you switch from Medicare Advantage to Medigap, you may face a waiting period for pre-existing conditions, depending on your state and how long you had Medicare Advantage. Some states have protections that waive this waiting period. If you switch from Medigap to Medicare Advantage, there is no waiting period — Medicare Advantage must cover you when ready.

Switching plans also means changing doctors if your current doctor is not in the new plan's network. Before you switch, confirm that your doctors are covered and that any ongoing treatments will be covered under the new plan.

Health status and future costs

Medicare Advantage premiums can change year to year, and the plan can change its network, copays, and formulary. If your health worsens and you need more care, your out-of-pocket costs in a Medicare Advantage plan can rise significantly. However, you cannot be denied Medicare Advantage coverage because of pre-existing conditions.

Medigap premiums also rise with age and inflation, but they are more stable and predictable. Once you buy a Medigap plan, the insurance company cannot drop you or refuse to renew you because of your health. Your coverage does not change unless you choose to change it.

If you are healthy now but worried about future health problems, Medigap offers more certainty. If you want to minimize costs today and can tolerate variable costs later, Medicare Advantage may suit you better.

Frequently Asked Questions

Can I have both Medicare Advantage and a Medigap plan at the same time?

No. If you are enrolled in Medicare Advantage, you cannot buy a Medigap plan. If you have a Medigap plan, you cannot enroll in Medicare Advantage. You must choose one or the other.

What happens if I move to a state where my Medicare Advantage plan does not operate?

You can switch to a different Medicare Advantage plan in your new state, or you can switch to Original Medicare and a Medigap plan. Moving out of your plan's service area is a may have access to event that lets you change plans outside the annual enrollment period.

Do I still pay Medicare Part B premiums if I have Medicare Advantage?

Yes. You pay your Part B premium to Medicare regardless of whether you have Medicare Advantage or Medigap. The Medicare Advantage premium or Medigap premium is separate and in addition to Part B.

Which option costs less overall?

It depends on your health and how often you see doctors. Medicare Advantage usually costs less if you are healthy and rarely need care. Medigap usually costs less if you have chronic conditions and see doctors frequently. Calculate your expected costs under both options before you decide.

Can I switch from Medicare Advantage to Medigap if I have a pre-existing condition?

Yes, but some states impose a waiting period for pre-existing conditions when you switch from Medicare Advantage to Medigap. Other states waive this waiting period. Contact your state's insurance commissioner's office to learn the rules in your state.