The core difference: how each plan pays your medical bills

Medicare Advantage is an alternative way to receive your Medicare benefits. Instead of using Original Medicare (Parts A and B), you enroll in a private insurance plan that contracts with Medicare. That private insurer becomes responsible for paying your doctors and hospitals. Most Advantage plans include prescription drug coverage (Part D) built in, and many add dental, vision, or hearing benefits that Original Medicare does not cover.

Medicare Supplement (also called Medigap) works alongside Original Medicare, not instead of it. You keep your Original Medicare coverage and add a private insurance policy that pays some or all of the costs that Medicare does not — copayments, coinsurance, and deductibles. A Supplement plan does not replace Medicare; it fills the gaps Medicare leaves behind.

The choice between them affects where you go for care, what you pay out of pocket, and how much flexibility you have with doctors and hospitals.

Key Takeaways

  • Medicare Advantage replaces Original Medicare with a private plan that usually costs less in monthly premiums but may have higher copayments and networks that limit which doctors you can see.
  • Medicare Supplement works with Original Medicare to cover the costs Medicare does not pay, giving you more freedom to see any doctor but typically costing more in monthly premiums.
  • Advantage plans often include prescription drugs and extra benefits like dental or vision; Supplement plans do not cover prescriptions, so you must enroll in Part D separately.
  • Advantage plans have annual out-of-pocket limits that cap your total costs; Supplement plans have no such limit, though your premiums tend to be higher.
  • You can switch between Advantage and Supplement during the Annual Enrollment Period (October 15 to December 7) or during certain life events, but timing matters for avoiding penalties.

How Medicare Advantage plans work and what they cost

When you enroll in a Medicare Advantage plan, you are choosing a private insurance company to manage your Medicare benefits. You still pay the Part B premium to Medicare, but the insurance company handles the rest. Most Advantage plans charge a monthly premium on top of Part B, though some have zero premium. However, when you use care, you typically pay a copayment for each doctor visit, urgent care visit, or hospital stay — not a percentage of the bill.

Advantage plans use networks. Your copayments are lowest when you see doctors and use hospitals within the plan's network. If you go out of network, you may pay much more or the plan may not cover the visit at all. Some plans 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 specialists without a referral but charge more for out-of-network care.

All Advantage plans have an annual out-of-pocket maximum — a cap on how much you will pay in copayments and coinsurance in a year. Once you hit that limit, the plan covers 100 percent of your in-network care for the rest of the year. This ceiling protects you from catastrophic costs, but you still pay premiums every month regardless.

How Medicare Supplement plans work and what they cost

A Medicare Supplement plan is a private insurance policy you buy to cover the gaps in Original Medicare. Original Medicare pays its share of a doctor visit or hospital stay, but you are responsible for the rest — the deductible, copayment, or coinsurance. Your Supplement plan then pays some or all of those costs, depending on which Supplement plan you choose.

There are ten standardized Supplement plans, labeled A through N. Plan A covers the least; Plan G and Plan N are popular middle-ground options; Plan F (the most comprehensive) is no longer available to people newly may be able to access for Medicare but still covers people who enrolled before 2020. Each plan covers the same benefits no matter which insurance company sells it, so the only difference between companies is the monthly premium. You can see any doctor or hospital that accepts Medicare — there is no network restriction.

Supplement plans do not include prescription drug coverage. If you want Part D, you must enroll in a separate prescription drug plan. Supplement premiums tend to be higher than Advantage premiums, and they increase with age. Unlike Advantage plans, Supplement plans have no annual out-of-pocket maximum, but because the plan pays your cost-sharing, your total costs are often more predictable.

Network restrictions and doctor choice

This is where the plans differ most in daily life. With a Medicare Supplement, you can see any doctor or specialist in the United States who accepts Medicare. No referrals, no networks, no surprise bills for going to the "wrong" hospital. This freedom is valuable if you have a longtime doctor you want to keep or if you travel frequently and need care in different states.

Medicare Advantage plans restrict you to their network unless you are in an emergency or the plan is a PPO that allows out-of-network care at a higher cost. If your doctor is not in the network, you must either switch doctors or pay out of pocket. This is the trade-off for lower premiums and built-in prescription coverage. Some people find the network acceptable; others find it too limiting, especially if they have a specialist they see regularly.

Prescription drug coverage and other benefits

Most Medicare Advantage plans include Part D (prescription drug coverage) at no extra cost beyond the plan premium. Some Advantage plans also cover dental cleanings and exams, vision exams and glasses, hearing aids, or fitness programs — benefits that Original Medicare and Supplement plans do not cover. These extras can add real value if you use them.

Medicare Supplement plans do not cover prescriptions. If you choose a Supplement, you must enroll in a standalone Part D plan during the Annual Enrollment Period or when you first become may be able to access for Medicare. If you miss the important date and do not have other creditable drug coverage, you may pay a penalty on top of your Part D premium for as long as you have Medicare. Supplement plans also do not cover dental, vision, or hearing — you would pay for those out of pocket or through separate policies.

Out-of-pocket costs and annual limits

Medicare Advantage plans cap your annual out-of-pocket costs. In 2024, that limit varies by plan but is typically between $6,700 and $10,000 for in-network care. Once you reach the limit, the plan covers 100 percent of your in-network care for the rest of the calendar year. This ceiling gives you predictability: you know the worst-case scenario for what you will pay.

Medicare Supplement plans have no annual out-of-pocket maximum. However, because your Supplement plan pays your cost-sharing, you are not exposed to the full cost of care the way you would be with Original Medicare alone. Your total costs depend on your Supplement plan choice and your monthly premium, which increases with age and varies by insurance company.

When you can switch and what happens if you change your mind

You can change from Advantage to Supplement (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 during certain life events — moving out of your plan's service area, losing other health coverage, or may have access to for Medicaid, for example.

If you switch from Advantage to Supplement, you may face underwriting. The insurance company can ask health questions and may deny you coverage or charge a higher premium based on your health history. However, if you switch within 63 days of losing Advantage coverage, you have a may provide right to buy a Supplement plan without underwriting — this is called the Medigap Open Enrollment Period. If you wait longer than 63 days, you lose this protection and the company can use your health to set your rate.

Switching from Supplement to Advantage is simpler: Advantage plans cannot deny you based on health, and you pay the same premium as anyone else in your area and age group.

Which plan might work better for your situation

Choose Medicare Advantage if you are comfortable with a network, want lower monthly premiums, do not mind copayments at each visit, and value extra benefits like dental or vision. Advantage works well if you are generally healthy, use doctors and hospitals in the plan's network, and want prescription coverage included. It is also a good fit if you are cost-conscious and want a predictable annual maximum.

Choose Medicare Supplement if you have a longtime doctor you want to keep, travel frequently, see multiple specialists, or prefer the simplicity of going to any Medicare-accepting provider. Supplement makes sense if you value freedom over lower premiums and are willing to pay more each month for that flexibility. It is also worth considering if you live in an area where Advantage plan networks are limited or if you have had trouble with prior authorizations and referrals.

Some people switch between the two as their health or circumstances change. There is no permanent choice — you can move between them during enrollment periods, though timing matters for avoiding penalties and underwriting.

Frequently Asked Questions

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

No. You can have either Advantage or Original Medicare with a Supplement, but not both. If you enroll in Advantage, your Original Medicare coverage is suspended. If you later switch back to Original Medicare, you can then enroll in a Supplement (subject to underwriting rules).

What happens to my Medicare Advantage coverage if I move to a different state?

Your Advantage plan coverage ends on the last day of the month you move. You have 60 days to enroll in a new plan in your new state. During this time, you can switch to any Advantage plan or to Original Medicare with a Supplement without underwriting. If you miss the 60-day window, you may have to wait until the next Annual Enrollment Period.

Do I pay the Part B premium with both Advantage and Supplement?

Yes. Whether you choose Advantage or Supplement, you pay the Part B premium to Medicare. With Advantage, you also typically pay a plan premium. With Supplement, you pay the Supplement premium instead. Part D (prescription drug) has its own premium if you enroll in it.

What if my Advantage plan is discontinued?

If your plan ends, Medicare sends you a notice. You have until the end of that month to enroll in a different Advantage plan or switch to Original Medicare with a Supplement. This counts as a may have access to life event, so you can switch to Supplement without underwriting if you act within 63 days.

Are Supplement premiums the same everywhere?

No. Supplement premiums vary by insurance company, your age, your location, and sometimes your health history (depending on when you first became may be able to access for Medicare). Three companies selling the same Plan G in your area may charge different premiums. It is worth comparing quotes from multiple insurers.