Medicare Advantage vs Medigap

As individuals approach age 65 and become eligible for Medicare, they're faced with important decisions regarding their healthcare coverage. Two popular options available to Medicare beneficiaries are Medicare Advantage and Medicare Supplement plans, also known as Medigap. Understanding the differences between these two options is essential for individuals to choose the plan that best meets their healthcare needs and financial considerations.

Medicare Advantage Plans​

Medicare Advantage plans, often referred to as Medicare Part C, are comprehensive health plans offered by private insurance companies approved by Medicare. Medicare Advantage plans provide all the benefits of Original Medicare (Part A and Part B) and often include additional benefits such as prescription drug coverage (Part D), vision, dental, hearing, and wellness programs.
Medicare Advantage plans typically operate under managed care models, such as Health Maintenance Organizations (HMOs) or Preferred Provider Organizations (PPOs). This means beneficiaries may need to use network providers and obtain referrals for specialists in some cases.
Medicare Advantage plans often have lower monthly premiums compared to Medicare Supplement plans but may require copayments, coinsurance, and deductibles for services rendered. Maximum out-of-pocket limits provide financial protection by capping the amount beneficiaries are required to pay for covered services in a calendar year.
Beneficiaries can enroll in, switch, or disenroll from Medicare Advantage plans during the Annual Enrollment Period (AEP), which typically occurs from October 15th to December 7th each year.

Medicare Supplement Plans (Medigap):
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Medicare Supplement plans, or Medigap, are supplemental insurance policies sold by private insurance companies to fill the gaps in coverage left by Original Medicare. Medigap plans work alongside Original Medicare (Part A and Part B) to cover certain out-of-pocket costs such as copayments, coinsurance, and deductibles. However, Medigap plans do not typically cover services not covered by Original Medicare, such as prescription drugs, dental, vision, or hearing. Unlike Medicare Advantage plans, Medigap plans allow beneficiaries the flexibility to visit any healthcare provider that accepts Medicare patients, without worrying about network restrictions or referrals.
Medicare Supplement plans often have higher monthly premiums compared to Medicare Advantage plans but offer more predictable out-of-pocket costs since copayments and deductibles may be covered depending on the plan selected.
Beneficiaries have guaranteed issue rights when initially enrolling in Medicare Supplement plans, which means insurance companies must offer coverage regardless of pre-existing conditions. Outside of specific enrollment periods, insurers may subject applicants to medical underwriting, which could result in higher premiums or denial of coverage based on health status.

Choosing Between Medicare Advantage and Medicare Supplement Plans:

When deciding between Medicare Advantage and Medicare Supplement plans, individuals should consider factors such as healthcare needs, budget, provider preferences, and tolerance for out-of-pocket costs. Here are some points to consider:

●     Individuals who prioritize low monthly premiums and are willing to accept network restrictions may find Medicare Advantage plans more suitable.
●     Those seeking more flexibility in provider choice and predictable out-of-pocket costs may prefer Medicare Supplement plans, despite potentially higher premiums.
●     Individuals taking numerous medications may benefit from Medicare Advantage plans with comprehensive prescription drug coverage, while those with few prescriptions may find standalone Medicare Part D plans more cost-effective when combined with Medicare Supplement coverage.


To make the right decision for your situation, make sure you understand the differences between the two types of coverage. A trusted agent or broker can help you understand the differences. By carefully evaluating healthcare needs, budgetary considerations, and personal preferences, individuals can make informed decisions that provide peace of mind and ensure access to high-quality healthcare in retirement. Whether opting for the comprehensive benefits of Medicare Advantage or the flexibility and supplemental coverage offered by Medicare Supplement plans, choosing the right Medicare plan is a critical step towards achieving healthcare security and well-being in the golden years.

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​Rob Davies
Prairie Grove Insurance
800-254-5200
​608-839-0275