There is no single "best" supplemental insurance because it depends on your health, where you live, and how much you want to spend

Supplemental insurance for Medicare comes in two main forms: Medigap (also called supplement insurance) and Medicare Advantage. Medigap covers costs that Original Medicare leaves behind — copayments, coinsurance, and deductibles. Medicare Advantage is an alternative to Original Medicare itself; it bundles hospital, medical, and usually prescription drug coverage into one plan, often with lower premiums but higher out-of-pocket limits. Neither is objectively "best" — the right choice depends on whether you want to stick with Original Medicare and fill the gaps, or switch to a managed care plan run by a private insurer.

The decision often comes down to three questions: Do you have preferred doctors you want to keep seeing? Can you afford higher out-of-pocket costs in exchange for lower monthly premiums? And do you take many prescription drugs? Your answers will point you toward one type or the other, and then toward specific plans within that type.

Key Takeaways

  • Medigap plans let you see any doctor who accepts Medicare, while Medicare Advantage plans restrict you to in-network providers and require referrals for specialists.
  • Medigap has predictable costs — a monthly premium plus small copays — but Medicare Advantage can have annual out-of-pocket limits that reach thousands of dollars.
  • You can switch from Original Medicare to Medicare Advantage during the annual enrollment period (October 15 to December 7), but switching back to Original Medicare and buying Medigap is harder and may cost more.
  • Medigap plans are standardized by the federal government, so Plan G from one insurer covers the same things as Plan G from another; Medicare Advantage plans vary widely by insurer and region.
  • The best time to buy Medigap is within six months of turning 65 or enrolling in Medicare Part B, when insurers cannot deny you or charge more based on health history.

How Medigap and Medicare Advantage differ in cost and coverage

Medigap is straightforward: you pay a monthly premium to an insurance company, and that plan pays the gaps in Original Medicare. You see any doctor or hospital that accepts Medicare — no referrals, no networks, no prior authorization for most things. Your costs are predictable: the premium, plus small copayments (usually $20 to $50 per visit) or coinsurance (a percentage of the bill). The most popular plans are Plan G and Plan N. Plan G covers nearly everything Original Medicare does not, except the Part B deductible (which is $240 in 2024, though this changes yearly). Plan N is cheaper but requires you to pay small copayments and coinsurance amounts.

Medicare Advantage works differently. You pay a monthly premium (often $0, sometimes $50 to $200) and in exchange you get all your Medicare coverage through a private insurer's network. You must see in-network doctors, get referrals to see specialists, and the insurer decides what treatments it will cover. The trade-off is lower premiums but higher out-of-pocket costs when you use care. Most Medicare Advantage plans have an annual out-of-pocket maximum — once you spend that amount, the plan covers everything else for the rest of the year. That maximum can be $7,550 or higher in 2024, depending on the plan.

Medigap premiums vary by age, location, and the insurance company, but a typical Plan G costs $120 to $250 per month. Medicare Advantage premiums are often lower or free, but you pay more when you actually see a doctor. If you rarely see doctors, Medicare Advantage can be cheaper. If you see doctors frequently or have ongoing health conditions, Medigap's predictable costs often work out cheaper overall.

When to buy Medigap and how the enrollment window works

The best time to buy Medigap is within six months of turning 65 or enrolling in Medicare Part B. During this window — called the Medigap Open Enrollment Period — insurance companies must sell you any Medigap plan at the standard rate, regardless of your health history. They cannot deny you, charge you more, or exclude pre-existing conditions. After this window closes, insurers can underwrite you, meaning they can refuse to sell you a plan or charge you a higher premium based on your medical history.

If you miss this window, you can still buy Medigap, but you may face medical underwriting. Some states have additional protections — for example, if you were enrolled in a Medicare Advantage plan and switch back to Original Medicare, you may have a second chance to buy Medigap without underwriting. Check your state's rules or contact your state health insurance counselor (find one through your state's Department of Insurance or the State Health Insurance information Program, or SHIP).

For Medicare Advantage, you can enroll during the Annual Enrollment Period (October 15 to December 7 each year) or during the Initial Enrollment Period when you first turn 65. You can also switch Medicare Advantage plans during the Annual Enrollment Period, but switching from Medicare Advantage back to Original Medicare is only possible during that same window — and if you do, you may not be able to buy Medigap without medical underwriting.

Medigap plans explained: which letter plan covers what

The federal government standardizes Medigap plans by letter: A, B, D, G, K, L, M, and N. (Plans C and F were discontinued for people new to Medicare after January 1, 2020.) Each letter covers a specific set of gaps in Original Medicare. You do not choose what each plan covers — that is set by law. You only choose which insurance company to buy from, and that affects the price.

Plan G is the most comprehensive and most popular. It covers the Part B deductible, copayments and coinsurance for hospital and medical services, blood transfusions, skilled nursing facility coinsurance, hospice coinsurance, and foreign travel emergency care. You still pay the Part B deductible ($240 in 2024) out of pocket. Plan N is similar but cheaper; it does not cover the Part B deductible, and it requires you to pay small copayments ($20 for doctor visits, $50 for emergency room) and coinsurance for hospital stays. Plan D is less common and covers fewer gaps. Plans K and L have annual out-of-pocket limits and are cheaper but require you to pay more upfront.

To compare plans, look at the monthly premium and then estimate your annual costs based on how often you see doctors. If you see a doctor once a month, Plan N's copayments might add up to $240 per year, while Plan G has no copayments but costs more per month. A counselor at your local SHIP office can help you run these numbers for your situation.

Medicare Advantage plans: networks, referrals, and prescription drugs

Medicare Advantage plans vary widely by insurer and region. Some are Health Maintenance Organizations (HMOs), which require you to choose a primary care doctor and get referrals to see specialists. Others are Preferred Provider Organizations (PPOs), which let you see out-of-network doctors but charge you more. A few are Private Fee-for-Service plans, which work differently still. Before you enroll, check whether your current doctors are in the plan's network.

Most Medicare Advantage plans include prescription drug coverage (Part D), so you do not need to buy a separate drug plan. However, the formulary — the list of drugs the plan covers — varies by plan and by insurer. If you take expensive or specialty drugs, check the plan's formulary before enrolling. Some plans cover the drug you need; others do not, or require prior authorization or step therapy (trying a cheaper drug first).

Medicare Advantage plans also often include extra benefits that Original Medicare does not: dental, vision, hearing, fitness programs, or transportation to medical appointments. These can be valuable, but they are not standardized — each plan offers different extras. Do not choose a plan based on extras alone; make sure the core coverage (hospital, medical, drugs) meets your needs first.

How to compare plans and find current options in your area

The official Medicare Plan Finder tool (at Medicare.gov) lets you enter your zip code, current doctors, and current medications, and it shows you all Medigap and Medicare Advantage plans available to you. For Medigap, you can see which insurance companies offer which plans and what they charge. For Medicare Advantage, you can see the network, copayments, out-of-pocket maximum, and whether your doctors are in-network.

When comparing Medigap plans, focus on the monthly premium and the copayments or coinsurance. When comparing Medicare Advantage plans, look at the monthly premium, the out-of-pocket maximum, whether your doctors are in-network, and the prescription drug formulary. Do not assume a $0 premium plan is cheaper overall — a plan with a $0 premium but a $7,550 out-of-pocket maximum can cost you thousands if you have a hospital stay or need ongoing treatment.

You can also contact insurance companies directly or work with a licensed insurance agent. Many agents are paid by commission from the insurer, so they have an incentive to sell you a plan, but they can answer specific questions about coverage. Your state's SHIP office offers free, unbiased counseling and can walk you through the comparison process.

Common mistakes to avoid when choosing supplemental coverage

One common mistake is choosing a plan based on premium alone. A Medigap plan with a $20 lower monthly premium might cost you hundreds more per year if it has higher copayments. Similarly, a Medicare Advantage plan with a $0 premium can be expensive if you have a chronic condition and hit the out-of-pocket maximum.

Another mistake is not checking whether your doctors are in-network before enrolling in Medicare Advantage. If your preferred doctor is out-of-network, you will either pay more or have to switch doctors. Check the plan's website or call the plan directly to confirm your doctor is in-network and accepting new patients.

A third mistake is waiting too long to buy Medigap. If you miss the six-month Medigap Open Enrollment Period, you may face medical underwriting and higher premiums. If you are thinking about buying Medigap, do it within that window.

Finally, do not assume you are locked into your choice. You can switch Medigap plans once per year (though you may face medical underwriting if you switch to a different plan). You can switch Medicare Advantage plans during the Annual Enrollment Period. But switching from Medicare Advantage back to Original Medicare and buying Medigap is harder, so think carefully before making that switch.

Frequently Asked Questions

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

No. You must choose one or the other. If you have Medigap, you are enrolled in Original Medicare. If you have Medicare Advantage, you are not enrolled in Original Medicare and do not need Medigap. If you try to enroll in both, Medicare will cancel one of them.

What happens if I switch from Medicare Advantage back to Original Medicare?

You can switch during the Annual Enrollment Period (October 15 to December 7). Once you switch, you lose your Medicare Advantage coverage. If you want to buy Medigap at that point, you may be able to do so without medical underwriting, depending on your state's rules. Contact your state's SHIP office to learn your state's protections.

Do I need to buy prescription drug coverage if I have Medicare Advantage?

Most Medicare Advantage plans include prescription drug coverage, so you do not need a separate Part D plan. However, check the plan's formulary to make sure it covers the drugs you take. If you have Original Medicare and Medigap, you must buy a separate Part D plan.

What if my doctor leaves the Medicare Advantage network?

If your in-network doctor leaves the plan, you can usually continue seeing them for a short transition period (often 30 to 90 days) at in-network rates. After that, you will pay out-of-network rates unless you switch to a different plan or switch to Original Medicare and Medigap. Check your plan's policy on provider changes.

How often can I change my Medigap or Medicare Advantage plan?

You can change Medicare Advantage plans once per year during the Annual Enrollment Period. For Medigap, you can switch plans at any time, but if you switch to a different plan (not just a different insurance company), you may face medical underwriting and higher premiums. Some states allow one may provide-issue switch per year.