INSURANCE BRIEF

Medigap vs Medicare Advantage

3 min read

By: Justin Tomlin – Licensed Insurance Agent (FL W960118 | GA 3760385)

Original Medicare — Part A and Part B — covers a wide range of services. Part A handles inpatient hospital stays, skilled nursing facility care, hospice, and some home health services. Part B covers outpatient care, doctor visits, preventive services, and medical equipment. Together, they form the base of federal health coverage for most people 65 and older.

Original Medicare does not cover everything. There are deductibles, coinsurance amounts, and services it simply does not include. That leaves many people choosing between two paths for additional coverage: adding a Medicare Supplement Insurance Policy — commonly called Medigap — or enrolling in Medicare Advantage.

Path One: Original Medicare + Medicare Supplement Insurance Policy

A Medicare Supplement Insurance Policy (Medigap) works alongside Original Medicare. It does not replace it. These policies are designed to help pay some of the out-of-pocket costs that Original Medicare leaves to the enrollee — things like coinsurance after a hospital stay or skilled nursing facility care.

Medigap plans are standardized at the federal level. The benefits within a given plan letter are the same regardless of which private insurance company sells it. Premiums vary between companies.

To enroll in a Medigap plan, a person must have both Medicare Part A and Part B. Most Medigap plans do not include prescription drug coverage, so a separate Part D plan is generally needed.

Enrollment timing matters. There is a guaranteed enrollment window tied to the start of Part B. Outside that window, insurers in most states can consider health history when deciding whether to approve a Medigap application and at what premium.

Path Two: Medicare Advantage

Medicare Advantage — also called Part C — is offered by private insurance companies approved by Medicare. These plans must cover at least what Original Medicare covers. Many include additional benefits, such as dental, vision, hearing, and prescription drug coverage.

Medicare Advantage plans often use a provider network. Coverage may be structured as an HMO or a PPO, and prior authorization may be required for some services. Each plan sets its own cost-sharing rules, including copays, deductibles, and an annual out-of-pocket maximum.

Plan details — including benefits, premiums, and networks — can change each year during the annual enrollment period.

Which Path Is Right For You?

Everyone’s health plan needs are unique. The choice depends on individual health needs, budget, provider preferences, and where a person lives.

Those who value seeing any Medicare-accepting provider without network restrictions, and who want stable cost-sharing from year to year, often look at the Medigap path. Those who prefer a single plan that may bundle drug and other benefits, and are comfortable working within a provider network, often look at Medicare Advantage.

Plan availability varies by ZIP code. The number of options — and which providers participate — can differ significantly from one area to the next.

Official Resources for Making Decisions