Both Medicare supplement plans and Medicare Advantage plans provide a way to obtain or supplement your Medicare benefits to protect you from high medical bills and limit your out-of-pocket medical expenses, but they work very differently.

If you’re like the thousands who visit our site each month looking for Medicare coverage, you may wonder how Medigap and Medicare Advantage stack up. Here, we compare the two side-by-side so you can make more informed healthcare choices.

What Are Medigap and Medicare Advantage?

Medigap plans supplement Medicare by paying the covered expenses that Medicare does not pay. It will cover any doctor that accepts Medicare.

Medicare Advantage plans are a way to get your Medicare from a private insurer. The tremendous advantage over original Medicare is that a Medicare Advantage plan will limit your maximum out-of-pocket exposure, which original Medicare does not.

One considerable selling point for both Medigap and Medicare Advantage is what they protect. If you wish to avoid a huge bill for health costs Medicare doesn’t cover, either plan will help lower those bills.

A downside to Medicare Supplement Insurance, or Medigap, is that the plan charges a premium in addition to what the person already pays for Medicare Parts A, B, and D. This could force people to pay more than what they anticipated, or can afford.

Key Differences

Did you know it is illegal for any insurance company to sell you both a Medigap and Medicare Advantage policy? Therefore, it is important to know the differences before taking the plunge.

Here are three things to consider before settling on a plan:

  • How you currently live your life. Most Medicare Advantage plans are specific to one area. Should you live in different climates throughout the year, traditional Medicare plus Medigap is probably a better choice than an Advantage plan. This may also be true if you travel frequently; some Medigap plans provide coverage when traveling outside of the United States and cover you in all 50 states; Advantage plans generally do not.
  • Where you may need care. You are generally limited to the doctors and facilities within the HMO or PPO with Medicare Advantage plans, which may or may not cover any out-of-network healthcare needs such as those from specialists. Traditional Medicare and Medigap policies cover you if you go to any doctor or facility that accepts Medicare. If you require particular specialists or hospitals, check whether they are covered by the plan you select.
  • Your monthly outlay. Medigap coverage typically has a much higher monthly premium, but could result in lower out-of-pocket expenses than some Medicare Advantage plans. Medicare Advantage plans, on the other hand, generally cost less (and sometimes have a $0 premium) and cover more services, which can be the better option for your budget. Also, if you have Medicare plus Medigap, you will typically pay $0 out of pocket, whereas a Medicare Advantage plan will leave you paying a portion of the bill.

Things to keep in mind

You have a guaranteed right to purchase a Medicare Advantage plan when you turn 65, and every sequential year during the annual enrollment period in the fall. With a Medicare supplement plan you can enroll at any time, but you generally only have guaranteed-issue status when you turn 65.

Regardless of which plan you choose, you can enroll with your personal benefits manager (PBM) here at Medigap Advisors. Call us today to get started with either Medicare Advantage or Medigap coverage.

Wiley Long is founder and president of Medigap Advisors, and is passionate about helping people navigate the confusing waters of Medicare. He is the author of The Medicare Playbook: Designing Your Successful Health Coverage Strategy, a clear and simple explanation so you can make the most of your Medicare coverage. For more information visit www.MediGapAdvisors.com.