Terry Turner, writer and researcher for RetireGuide
  • Written by
    Terry Turner

    Terry Turner

    Senior Financial Writer and Financial Wellness Facilitator

    Terry Turner has more than 30 years of journalism experience, including covering benefits, spending and congressional action on federal programs such as Social Security and Medicare. He is a Certified Financial Wellness Facilitator through the National Wellness Institute and the Foundation for Financial Wellness and a member of the Association for Financial Counseling & Planning Education (AFCPE®).

    Read More
  • Edited By
    Savannah Hanson
    Savannah Hanson, financial editor for RetireGuide

    Savannah Hanson

    Financial Editor

    Savannah Hanson is a professional writer and content editor with over 15 years of professional experience across multiple industries. She has ghostwritten for entrepreneurs and industry leaders and been published in mediums such as The Huffington Post, Southern Living and Interior Appeal Magazine.

    Read More
  • Published: July 13, 2020
  • Updated: September 16, 2022
  • 10 min read time
  • This page features 6 Cited Research Articles
Fact Checked
Fact Checked

Our fact-checking process starts with vetting all sources to ensure they are authoritative and relevant. Then we verify the facts with original reports published by those sources, or we confirm the facts with qualified experts. For full transparency, we clearly identify our sources in a list at the bottom of each page.

Cite Us
How to Cite RetireGuide.com's Article

APA Turner, T. (2022, September 16). Medicare Advantage vs. Medigap. RetireGuide.com. Retrieved September 25, 2022, from https://www.retireguide.com/medicare/compare/medicare-advantage-vs-medigap/

MLA Turner, Terry. "Medicare Advantage vs. Medigap." RetireGuide.com, 16 Sep 2022, https://www.retireguide.com/medicare/compare/medicare-advantage-vs-medigap/.

Chicago Turner, Terry. "Medicare Advantage vs. Medigap." RetireGuide.com. Last modified September 16, 2022. https://www.retireguide.com/medicare/compare/medicare-advantage-vs-medigap/.

Why Trust RetireGuide.com
Why You Can Trust Us

Content created by RetireGuide and sponsored by our partners.

Key Principles

RetireGuide’s mission is to provide seniors with resources that will help them reach important financial decisions that affect their retirement. Our goal is to arm our readers with knowledge that will lead to a healthy and financially sound retirement.

We’re dedicated to providing thoroughly researched Medicare information that guides you toward making the best possible health decisions for you and your family.

RetireGuide LLC has partnerships with Senior Market Sales (SMS), GoHealth and others.

Our partners are able to be reached through the phone numbers and/or forms provided on our website.

The content and tools created by RetireGuide adhere to strict Medicare and editorial guidelines to ensure quality and transparency.

Editorial Independence

While the experts from our partners are available to help you navigate various Medicare plans, RetireGuide retains complete editorial control over the information it publishes.

We operate independently from our partners, which allows the award-winning RetireGuide team to provide you with unbiased information.

Visitors can trust our inflexibility regarding our editorial autonomy. We do not allow our partnership to influence RetireGuide’s editorial content whatsoever.
Key Takeaways
  • Medicare Advantage is a money-saving choice if you are in good health with few medical expenses. Otherwise, Medigap is generally better for those with serious medical conditions.
  • You cannot have Medicare Advantage and Medigap at the same time. But you are able to switch between the two plans should your health care costs change.
  • Medicare Advantage covers dental and vision. Medigap doesn’t help with these services.

How Do Medicare Advantage Plans Work?

Medicare Advantage plans are an alternative to Original Medicare. Sold by private insurers, these plans cover everything covered by Original Medicare but may also offer extra benefits for things that Medicare doesn’t. Additional benefits may include prescription drug coverage along with hearing, dental and vision care.

You can purchase a Medicare Advantage plan after enrolling in Medicare Part A hospital insurance and Medicare Part B medical insurance. When you enroll, your Medicare Advantage plan takes the place of your Medicare Part A and Part B coverage.

How Do Medigap Plans Work?

Medigap is intended simply to cover some of the gaps that Original Medicare doesn’t pay for — coinsurance, copayments and deductibles, for instance.

Original Medicare only pays 80% for Medicare-covered services such as your doctors’ services and any outpatient medical services and supplies. A Medigap plan can help cover some or all of that 20% gap that you have to pay for out-of-pocket.

Medigap cannot be used to pay for anything that Medicare Part A and Part B does not cover. This means you can’t use Medigap to cover prescription drugs or the hearing, vision and dental services that Original Medicare does not cover.

If you have Original Medicare and a Medigap policy, you may also benefit from a Medicare Part D prescription drug plan to help cover prescription drug costs.

How Are Medicare Advantage and Medigap Different?

With a Medigap plan, you have access to any doctor or provider who accepts Medicare. By contrast, you may have fewer choices in terms of doctors and health care providers with a Medicare Advantage plan.

Legally, you cannot have Medigap coverage with a Medicare Advantage plan. However, you may be able to switch between the two plans.

Biggest Differences Between Medicare Advantage and Medigap

Medicare Advantage and Medigap plans can provide different options to best suit your circumstances. You should compare Medicare plans carefully to make sure you’re getting the best coverage for your particular financial situation and health care needs.

Comparing Plans: Medicare Advantage vs. Medigap
Choice of Doctors
  • Medicare Advantage: Requires you to use doctors in the plan’s network or you have to pay more out-of-pocket.
  • Medigap: You can use any doctor or hospital that accepts Medicare.
Costs
  • Medicare Advantage: An average $19 a month premium (for 2022) on top of your Medicare Part B premium.
  • Medigap: The average Medigap cost is $1,956 per year ($163 per month) in 2022.
Coverage
  • Medicare Advantage: Covers Medicare Parts A and B, but most provide extra benefits, including vision, dental, hearing and prescription drugs.
  • Medigap: You still have Original Medicare Parts A and B, and the choice of eight different Medigap plans each providing different levels of coverage.
Out-of-Pocket Limit
  • Medicare Advantage: Plans must cap annual out-of-pocket costs at $7,550 for in network services and $11,300 for in- and out-of-network services combined.
  • Medigap: A Medigap policy can ease concerns about Medicare's lack of caps or limits. Each plan has specific benefits with specified out-of-pocket costs.
Prescription Drug Coverage
  • Medicare Advantage: Plans may include prescription drug coverage.
  • Medigap: You have to buy separate Medicare Part D prescription drug coverage.
Referrals
  • Medicare Advantage: You may be required to get a referral from your primary care doctor to see a specialist.
  • Medigap: Referrals from your primary care doctor are not required.
Don't Leave Your Health to Chance
You've worked hard your whole life by thinking ahead. Now do the same for your health. Get free Medicare help to plan your future.

Is Medicare Advantage or Medigap Coverage Your Best Choice?

If you are in good health with few medical expenses, Medicare Advantage can be a suitable and money-saving choice. But if you have serious medical conditions with expensive treatment and care costs, Medigap is generally better.

Speaking with a licensed insurance agent about your particular health situation can help you decide which is best for you. Since you are not allowed to have Medicare Advantage and Medigap at the same time, you have to choose carefully to make sure you have suitable coverage for your specific situation.

Weighing what options are most important to you and talking with a licensed insurance agent about your particular wants and needs can help you make an informed choice between Medicare Advantage and Medigap.

Terry Turner, senior financial writer and financial wellness facilitator, talks through the differences between Medicare Advantage and Original Medicare with Medigap coverage.

Pros & Cons of Medicare Advantage and Medigap Plans

There are pros and cons for both Medigap and Medicare Advantage plans based on each individual’s financial situation and health circumstances.

You should compare the differences between the Medigap and Medicare Advantage plans you are considering before deciding which one you want to purchase.

Medigap vs Medicare Advantage
Expand

Pros of Medicare Advantage Plans

Medicare Advantage plans usually have lower monthly premiums than Medigap plans. They may also include prescription drug coverage. You have to enroll in a separate drug plan if you go with Medigap.

If dental or vision coverage is important to you, you might choose Medicare Advantage because Medigap doesn’t help with these services. Medicare Advantage may also be better for you if you are flexible on which doctors you are willing to see, since you will have to use in-network health care providers to cut out-of-pocket costs.

Cons of Medicare Advantage Plans

One of the biggest disadvantages of a Medicare Advantage plan is that it limits your choice of doctors, hospitals and other health care providers. Medicare Advantage plans rely on health care provider networks — if you go to a doctor or other provider not in your network, you typically have to pay more of the cost.

While Original Medicare is the same across the United States, Medicare Advantage plans may only cover your health care in a specific area. If you move to a new state, you may have to replace your plan.

There are a wide variety of Medicare Advantage plans available — but they are not available in all areas. You may have a confusing number of Medicare Advantage plans to choose from if you live in a densely populated area, such as a major city. But you are more likely to have limited options in rural areas.

Pros of Medigap Plans

Medigap helps cover your out-of-pocket expenses if you decide to stick with Original Medicare.

The biggest advantage of Medigap may be your choice of doctors. You have more doctors and hospitals to choose from since you can go to any provider that accepts Medicare.

If your doctor is not in a Medicare Advantage plan you’re considering and you don’t want to switch doctors, you may want to consider Medigap. This will allow you to see any doctor who accepts Medicare.

While Medigap premiums are generally higher than those of Medicare Advantage, Medigap will likely charge you lower out-of-pocket expenses. You’ll need to calculate how much you expect to pay for health care over a year and compare that to your annual premium cost.

Finding a Medigap plan that works for you can be less confusing because there are only eight types to choose from. This can simplify enrolling in Medicare.

Did You Know?
With Medigap, out-of-pocket expenses are generally low to none. Medicare Advantage out-of-pocket expenses in 2022 can range from $0 to $7,550 per year.

Cons of Medigap Plans

Costs are the leading disadvantage of Medigap. Medigap plans tend to have higher monthly premiums than Medicare Advantage plans. You also still have to pay your Medicare Part B monthly premiums.

If you didn’t become eligible for Medicare before January 1, 2020, Medigap can no longer pay for your Medicare Part B deductible.

To be eligible for a Medigap plan, you have to be 65 years or older and be enrolled in both Medicare Part A hospital insurance and Medicare Part B medical insurance.

You are not guaranteed that your application for a Medigap policy will be accepted if you don’t purchase a plan when you are first eligible for Medicare. Even if you are accepted after the initial enrollment period, you may have to pay more for a Medigap policy.

Medigap policies are standardized in 47 states and the District of Columbia. But costs may vary state-to-state for the same plan.

Can You Switch Between Medicare Advantage and Medigap?

If you originally sign up for Medicare Advantage and decide it isn’t right for you, you can switch to Medigap supplemental coverage. You can also switch from Medigap to a Medicare Advantage plan.

However, you have to follow certain rules and there may be some problems if you decide to switch down the line.

Learn whether or not you can switch between Medicare Advantage and Medigap plans from Tom Parkin, a Medicare expert who has more than a decade of experience in the insurance industry.

If you are in a Medicare Advantage plan, you can make a switch to a different Medicare Advantage plan during Medicare’s open enrollment period, which runs from October 15 through December 7 each year.

You may also not be able to get a Medigap policy if you give up your Medicare Advantage plan. If you are new to Medicare, insurers are required to sell you a Medigap policy. But after that initial enrollment, there’s no guarantee that they will sell you one.

Insurers can also charge you more for a Medigap policy if you have serious medical problems when you decide to switch from a Medicare Advantage plan.

A handful of states protect your ability to switch back to Original Medicare with Medigap coverage.

States That Allow You to Switch Year-Round
  • New York
  • Connecticut
  • Washington
States That Allow You to Switch During Enrollment Periods
  • California
  • Massachusetts
  • Maine
  • Missouri
  • Oregon

Rules guaranteeing your ability to switch vary between each of these states. You should check with your state’s rules to determine what applies in your case.

Questions To Help You Decide Between Medicare Advantage and Medigap

There are several questions you can ask yourself to help narrow down whether Medigap or Medicare Advantage might be a better fit for you.

If you’re considering Medicare Advantage, these are some questions you should ask yourself.

Medicare Advantage Questions To Ask Yourself
  1. Am I willing to accept a limited choice of doctors or other health care providers who I can see?
  2. Do I want insurance to cover dental, hearing or vision care, all included in my premiums?
  3. Am I relatively healthy and seldom need a doctor’s visit?
  4. Am I at low risk of developing a chronic or serious medical condition?
  5. Am I unlikely to move to another state?
  6. Do I want prescription drug coverage included in my coverage?
  7. Are low monthly premiums more important than higher coinsurance or copayments when I get health care?

If you answered “Yes” to the majority of these questions, you may want to focus mainly on Medicare Advantage plans.

You may want to ask yourself the following questions if you are considering a Medigap plan.

Medigap Questions To Ask Yourself
  1. Is my choice of doctors or other health care providers important to me?
  2. Am I willing to skip having insurance for hearing, vision and dental care?
  3. Do I go to the doctor frequently or require health care services frequently?
  4. Do I have — or am I at risk of developing — a chronic or serious medical condition?
  5. Am I likely to move to another state?
  6. Am I willing to pay extra for a prescription drug insurance plan?
  7. Am I willing to pay higher monthly premiums to avoid higher copayments or coinsurance when I get health care?

If you answered “Yes” to a majority of these questions, you may want to learn more about Medigap options.

When making a decision, it’s important to consider your financial situation and the quality of your health. Talking with a Medicare advisor can help guide you to a clearer understanding of what type of Medicare coverage is best for you.

Don't Leave Your Health to Chance
You've worked hard your whole life by thinking ahead. Now do the same for your health. Get free Medicare help to plan your future.
Last Modified: September 16, 2022

6 Cited Research Articles

  1. U.S. Centers for Medicare & Medicaid Services. (2022). Medigap & Medicare Advantage Plans. Retrieved from https://www.medicare.gov/supplements-other-insurance/whats-medicare-supplement-insurance-medigap/medigap-medicare-advantage-plans
  2. U.S. Centers for Medicare & Medicaid Services. (2020, April 8). Final Contract Year 2021 Part C Benefits Review and Evaluation. Retrieved from https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/final%20cy%202021%20part%20c%20bid%20review%20memorandum_4-8-2020_7.pdf
  3. White, J. (2020, January 24). Medigap vs. Medicare Advantage: What's’ the Difference? Retrieved from https://www.thestreet.com/personal-finance/insurance/health-insurance/medigap-vs-medicare-advantage
  4. U.S. Centers for Medicare & Medicaid Services. (2019, April 1). Announcement of Calendar Year (CY) 2020 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies and Final Call Letter. Retrieved from https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/Announcement2020.pdf
  5. Curto, V. (2017, October). Pricing Regulations in Individual Health Insurance: Evidence from Medigap. Harvard University. Retrieved from https://www.ntanet.org/wp-content/uploads/proceedings/2017/NTA2017-411.pdf
  6. Consumer Reports. (2014, October 14). Medigap vs. Medicare Advantage; Know the Difference Before You Choose. Retrieved from https://www.consumerreports.org/cro/news/2014/10/medigap-vs-medicare-advantage-consumer-reports/index.htm