Medicare Advantage vs. Medigap: Which One Is Right for You?

Choose the Best Medicare Plan for You

Choosing the best Medicare plan can feel like a lot, especially when deciding between Medicare Advantage and Medigap. Both options help fill the gaps in Original Medicare, but they work differently. Understanding these differences is crucial for making the right choice for your healthcare needs and budget. Below, we will break down everything you need to know about both options, helping you make the right decision that protects your health and your wallet.

What Is Medicare Advantage?

Medicare Advantage, or Medicare Part C, is an alternative way to receive Medicare benefits. Instead of getting coverage directly from the federal government, you receive benefits through a private insurance company that contracts with Medicare. These plans must cover everything that Original Medicare covers (Part A hospital insurance and Part B medical insurance), but they often include additional benefits like prescription drug coverage, dental, vision, hearing aids, and wellness programs. Many Medicare Advantage plans also offer extras like gym memberships or transportation to medical appointments. Medicare Advantage plans typically operate as Health Maintenance Organizations (HMOs) or Preferred Provider Organizations (PPOs), so you’ll usually need to use doctors and hospitals within the plan’s network. Some plans require referrals to specialists, while others allow you to see specialists directly.

What Is Medigap?

Medigap, also called Medicare Supplement Insurance, works alongside Original Medicare to help pay for costs that Medicare doesn’t cover. Private insurance companies sell these standardized plans and help cover copayments, coinsurance, and deductibles. Unlike Medicare Advantage, Medigap doesn’t replace your Original Medicare coverage. Instead, it supplements it by paying for out-of-pocket costs you would otherwise pay yourself. When you have Medigap, you keep your Original Medicare and add the supplement policy. There are 10 standardized Medigap plans (labeled A, B, C, D, F, G, H, K, L, and N), each providing different levels of coverage. Plan F and Plan C are no longer available to new Medicare beneficiaries as of 2020, but existing enrollees can keep their coverage.

Medicare Advantage vs Medigap: The Key Differences

Understanding the core differences between these options is essential for choosing a Medicare plan that fits your needs. Consider the following variations:

• How they work: Medicare Advantage replaces Original Medicare, while Medigap supplements it
• Network restrictions: Medicare Advantage plans typically have provider networks, while Medigap allows you to see any doctor who accepts Medicare
• Additional benefits: Medicare Advantage often includes extras like prescription drugs, dental, and vision, while Medigap focuses solely on covering Medicare cost-sharing
• Costs: Medicare Advantage plans often have low or $0 monthly premiums but may have higher out-of-pocket costs when you need care. Medigap has monthly premiums but provides more predictable healthcare costs
• Prescription coverage: Most Medicare Advantage plans include drug coverage, while Medigap requires you to purchase a separate Part D plan
• Travel coverage: Medigap plans often provide coverage when traveling outside your area or internationally, while Medicare Advantage plans may have geographic limitations

How Do I Know Which One I Need?

Choosing between Medicare Advantage and Medigap depends on several personal factors. Consider Medicare Advantage if you want lower monthly premiums, don’t mind using a provider network, prefer having all your coverage in one plan, and are generally healthy with minimal healthcare needs. Medigap might be better if you want the freedom to see any Medicare-accepting provider, prefer predictable healthcare costs, travel frequently, have ongoing health conditions requiring regular care, or want the most comprehensive coverage. Think about your current health status, budget, preferred doctors, and how much healthcare you typically use. If you have chronic conditions or see specialists regularly, Medigap’s provider flexibility and predictable costs might be worth the higher monthly premiums.

When Can I Enroll?

Timing matters significantly when enrolling in either option. For Medicare Advantage, you can enroll during your Initial Enrollment Period (when you first become eligible for Medicare), the Annual Open Enrollment Period (October 15 – December 7), or certain Special Enrollment Periods if you qualify. Medigap has more restrictive enrollment periods. Your best opportunity is during your Medigap Open Enrollment Period, which lasts six months starting when you’re 65 or older and enrolled in Medicare Part B. During this time, insurance companies cannot deny you coverage or charge higher premiums based on your health status. After this initial period, you may face medical underwriting, higher premiums, or coverage denials when applying for Medigap. However, you have guaranteed issue rights in certain situations, such as when your Medicare Advantage plan leaves your area or you move outside your plan’s service area.

Can I Switch From One to the Other?

Switching between Medicare Advantage and Medigap is possible but comes with important considerations. Moving from Medicare Advantage back to Original Medicare plus Medigap can be challenging because you’ll likely face medical underwriting for the Medigap policy, unless you qualify for guaranteed issue rights. Switching from Medigap to Medicare Advantage is typically easier since Medicare Advantage plans cannot deny coverage based on health status. However, if you decide Medicare Advantage isn’t right for you, getting back into Medigap may be difficult and expensive. The Medicare Advantage Open Enrollment Period (January 1 – March 31) allows current Medicare Advantage members to switch to another Medicare Advantage plan or return to Original Medicare. If you switch back to Original Medicare during this time, you can also enroll in a Part D prescription drug plan.

Making the Right Choice for Your Medicare Coverage

Medicare Advantage and Medigap offer valuable benefits, but the best Medicare plan for you depends on your circumstances, health needs, and preferences. Medicare Advantage pros and cons include lower premiums and extra benefits versus network restrictions and potentially higher out-of-pocket costs. Medigap provides comprehensive coverage and provider flexibility but requires higher monthly premiums and separate prescription drug coverage. Take time to assess your healthcare needs, budget, and priorities. Consider speaking with a professional who can help you compare specific plans in your area. At Exact Medicare, our experienced agents can guide you through this important decision and help you find the coverage that best fits your unique situation. Ready to explore your Medicare options? Contact Exact Medicare today for a personalized consultation and discover which plan will give you the peace of mind and coverage you deserve.