Medicare Advantage vs. Medigap: how to actually choose

There is no version of this decision where one option is simply better. Medicare Advantage and Medicare Supplement plans solve the same problem — Original Medicare leaves you exposed to unlimited out-of-pocket costs — using opposite strategies. Choosing well means being honest about which strategy fits your life.

What each one actually does

A Medicare Supplement policy, often called Medigap, sits on top of Original Medicare. You keep Parts A and B, the government stays your payer, and the supplement pays most or all of the deductibles and coinsurance Medicare leaves behind. You can see any provider in the country who accepts Medicare, with no referrals and no network.

A Medicare Advantage plan replaces the way your benefits are delivered. A private insurer administers your Part A and Part B coverage, usually bundles in prescription drugs, and frequently adds dental, vision, hearing or over-the-counter allowances. In exchange you use the plan's network and follow its rules about referrals and prior authorization.

The cost shape is the real difference

Supplements front-load your costs. You pay a meaningful monthly premium — often between $120 and $300 depending on your age, state and plan letter — and then almost nothing when you use care. Advantage plans back-load them. Many have a $0 monthly premium, but you pay copays at each visit, each test and each hospital stay until you hit the plan's annual out-of-pocket maximum.

If you use very little care, Advantage is usually cheaper over a year. If you have a serious year — a hospitalization, a cancer diagnosis, a joint replacement with rehab — the supplement almost always costs less, and more importantly, you know in advance what it will cost.

The question people forget to ask

Switching from Advantage to a supplement later is not guaranteed. In most states, once your six-month Medigap open enrollment window closes, insurers can medically underwrite your application and decline you for pre-existing conditions. A handful of states, including New York and Connecticut, require insurers to accept applicants year round. Most do not.

Practically, that means the choice you make at 65 is easier to make in one direction than the other. You can almost always move from a supplement to Advantage. You cannot always move back.

A practical way to decide

• List every doctor and specialist you want to keep, then check each against the Advantage plan's current network — not last year's directory.
• Add up the Advantage plan's copays for a realistic bad year, not an average one, and compare that total to twelve supplement premiums.
• Ask whether you travel or spend part of the year in another state. Advantage networks are usually local; supplements are not.
• Consider whether underwriting would be a problem for you today. If your health is already complicated, the flexibility of a supplement is worth more.
• Check the extras honestly. A $1,500 dental allowance is real money, but it should not outweigh a network that excludes your cardiologist.

When we walk people through this, we put both totals on one page and let the numbers argue. Most of the time the answer becomes obvious within about ten minutes — and when it doesn't, that usually means either option would serve you fine.

This article is general education and is not advice about your individual situation. Plan availability, costs and formularies change annually and vary by county. We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov, 1-800-MEDICARE, or your local State Health Insurance Assistance Program to get information on all of your options.