At a glance
| Feature | Medicare Advantage | Medigap |
|---|---|---|
| How it works | Bundles Parts A and B into one private plan | Fills the gaps in Original Medicare |
| Doctors | Usually a provider network | Any doctor nationwide who accepts Medicare |
| Extra benefits | Often dental, vision, hearing and more | Typically none beyond Original Medicare |
| Prescription drugs | Often included | Add a separate Part D plan |
| Costs | Copays and coinsurance as you use care | Monthly premium, minimal costs when you get care |
| Year to year | Benefits and networks can change | Benefits stay the same |
Medicare Advantage
- All-in-one coverage
- Medicare Advantage plans, offered by private insurance companies approved by Medicare, bundle your Part A (hospital insurance) and Part B (medical insurance) coverage into one plan.
- Additional benefits
- Many Medicare Advantage plans offer extra benefits beyond Original Medicare, such as prescription drug coverage (Part D), dental, vision, and hearing coverage, gym memberships, and wellness programs.
- Managed care
- Most Medicare Advantage plans operate within provider networks, meaning you may need to choose healthcare providers from within the plan’s network.
- Costs
- Medicare Advantage plans typically have copayments, coinsurance, and deductibles, and may have lower out-of-pocket costs compared to Original Medicare. However, you’ll still need to pay your Part B premium.
- Annual changes
- Benefits, costs, and provider networks of Medicare Advantage plans can change annually, so it’s essential to review your plan during the Annual Enrollment Period (AEP).
Medigap
- Supplemental coverage
- Medigap plans are designed to fill the “gaps” in Original Medicare coverage, such as deductibles, copayments, and coinsurance.
- Standardized plans
- Medigap plans are standardized into different plan types labeled with letters (e.g., Plan A, Plan B). Each plan type offers the same benefits, regardless of the insurance company you choose.
- Freedom to choose providers
- With Medigap plans, you can typically see any doctor or healthcare provider nationwide who accepts Medicare, without needing referrals or being restricted to provider networks.
- No additional benefits
- Unlike Medicare Advantage plans, Medigap plans do not typically include extra benefits beyond what Original Medicare covers.
- Costs
- Medigap plans require a monthly premium in addition to your Part B premium. However, once enrolled, you generally have minimal out-of-pocket costs for covered services.
- No annual changes
- Benefits and coverage of Medigap plans remain consistent from year to year, providing stability and predictability.
Choosing between the two
- Consider your healthcare needs
- If you prefer a more comprehensive plan with extra benefits and don’t mind staying within a provider network, Medicare Advantage may be a good fit. If you want flexibility in choosing your healthcare providers and prefer predictable out-of-pocket costs, Medigap may be the better option.
- Evaluate costs
- Compare premiums, deductibles, copayments, and coinsurance of both types of plans to determine which one offers the most cost-effective coverage for your situation.
- Review plan options annually
- Regardless of which option you choose, it’s essential to review your coverage annually during the Annual Enrollment Period to ensure it still meets your healthcare needs and budget.
Conclusion
Understanding the differences between Medicare Advantage and Medigap can help you make an informed decision about your healthcare coverage. Whether you prioritize additional benefits and managed care or prefer flexibility and predictable costs, there’s a Medicare option suited to your needs.