Medicare Advantage vs. Medicare Supplement Insurance Plans
Fact checked Contributing expert: Roseann Birch, insurance consultant; Reviewed by: Leron Moore, Medicare consultant - Updated: Oct 19, 2021
Understand the differences between Medicare Advantage and Medicare Supplement Insurance (Medigap) plans.
What You Should Know
- 1 Medicare Advantage is offered through private insurance companies to give consumers a choice in how they receive Original Medicare benefits.
- 2 Medicare Supplement Insurance (Medigap) is sold by private insurance companies as an add-on to Original Medicare. It covers Part A and B deductibles, co-payments, and coinsurance.
- 3 Medicare Advantage companies are contracted by Medicare to deliver these plans and must meet guidelines established by the government.
- 4 You cannot be enrolled in a Medicare Advantage Plan and a Medigap plan at the same time.
The federal government’s Original Medicare program helps with the cost of healthcare for most Americans over the age of 65. Inpatient stays in a hospital, physician services, ambulance transportation, medical tests, and preventive screenings are typically covered by Original Medicare Part A (hospital insurance) and Part B (medical insurance).
There are additional out-of-pocket medical costs not covered by Original Medicare, including:
- Part B premiums
- Co-payment or coinsurance
- Prescription drugs
- Vision exams and eyeglasses
- Dental care
- Hearing aids
- Emergency care outside of the country
Medicare beneficiaries can enroll in a Medicare Advantage (Part C) or Medicare Supplement Insurance (Medigap) plan to help make up for some of these gaps in coverage.
- Medicare Advantage is offered through private insurance companies to give consumers a choice in how they receive Original Medicare. These plans cover everything included in Original Medicare Parts A and B, and some may cover additional benefits, such as dental and vision care.
- Medicare Supplement Insurance, also called Medigap, is an add-on to Original Medicare. It covers Part A and B deductibles, copayments, and coinsurance.
Because you can’t be enrolled in a Medicare Advantage and Medigap plan at the same time, it’s important to understand the differences between these two options when choosing your Medicare coverage.
What’s the Difference between Medicare Advantage and Medicare Supplement Insurance Plans?
How Medicare Advantage works
When you choose a Medicare Advantage (MA) plan,you’re enrolling in a plan delivered by a private insurance company to receive your Medicare benefits as an alternative to the federal government’s Original Medicare program. The MA insurance companies are contracted by Medicare to deliver these plans that must meet guidelines established by the government. You must be enrolled in Medicare Parts A and B to join a Medicare Advantage Plan
All Medicare Advantage Plans must cover the same Part A and B benefits as Original Medicare.
MA plans may also provide a range of additional benefits, such as:
- Prescription drugs
- Dental cleanings
- Vision and hearing tests
- Hearing aids
- Transportation to medical appointments
- Chiropractic care
- Fitness benefits, such as gym memberships
Benefits, deductibles, coinsurance, and cost-sharing vary depending on the plan.
How Medigap works
If you decide to keep Original Medicare instead of opting for a Medicare Advantage Plan, you can purchase a Medigap plan. Medigap plans are sold by private insurance companies and help pay for out-of-pocket costs related to Part A and Part B deductibles, copayments and coinsurance. Some plans may also cover emergency medical care when you travel outside of the country.
Compare Medicare Advantage and Medigap
Here’s a quick comparison of the differences between Medicare Advantage and Medigap. Because plans vary in costs and benefits, be sure to review the details of any plan before you choose.
|Medicare Advantage vs Medigap|
|Medicare Advantage||Medicare Supplement Insurance (Medigap)|
|Where do I purchase this plan?||Private insurance companies||Private insurance companies|
|Are Part A and Part B coverage provided by Original Medicare?||No||Yes|
|Is there a monthly premium?||Some plans have low or no monthly premiums.||Yes|
|Is there a Part B deductible?||It varies by plan. Some may have a Part B deductible.||Yes, except for those who purchased Medigap Plan C or Plan F prior to January 1, 2020.|
|Is there a Part B premium?||Yes, although some plans may cover part or all of the premium for you.||Yes|
|Are prescription drugs covered?||It varies by plan. Most provide prescription drug coverage, or you can enroll in a Medicare Part D prescription drug plan.||No. You may enroll in a Medicare Part D prescription drug plan..|
|Are routine dental, hearing, and vision services covered?||It varies by plan. Most provide dental, hearing, and vision benefits.||No|
|Are extra benefits included?||Some plans may provide fitness benefits, nonemergency medical transportation, acupuncture, chiropractic services, and in-home support.||Some plans may provide emergency medical care when traveling internationally.|
|Do I have to use providers within a network?||It depends on the plan. Some require you to use providers within their network. Others may allow out-of-network providers, but at a higher cost. Some plans have no network restrictions.||You may use any hospital or doctor in the United States that accepts Medicare.|
|Does each plan offer standardized benefits?||No. While each plan must offer Part A and Part B coverage, all other benefits vary by plan.||Yes. Each plan within the same letter category offers the same basic benefits.|
|Do I have out-of-pocket costs?||Most plans require coinsurance or cost-sharing.||Generally, coinsurance and cost-sharing for Part A and B expenses are covered.|
|Does the plan renew automatically?||Yes||Yes, as long as you pay your premiums.|
|Can I make changes to my plan?||Changes to coverage can be made during two open enrollment periods (January 1 to March 31 and October 15 to December 7).||You have a six-month Medigap open enrollment period that starts when you’re aged 65 and enrolled in Part B. After this, you may not be able to buy a Medigap policy, or it may cost more due to your health.|
|Who does this plan work best for?||Those who want more coverage than Original Medicare Those who want access to a network of providers or have no preference for certain providers||Those who expect to have frequent medical treatments and want out-of-pocket costs covered Those who travel often and want coverage in other states and out-of-country|
Choosing the right plan for you
Once you’ve decided whether Medicare Advantage or Medigap is your best option, you must select the specific plan you wish to purchase.
There are various types of Medicare Advantage Plans, including:
- Health Maintenance Organization (HMO) plans
- Preferred Provider Organization (PPO) plans
- Private Fee-for-Service (PFFS) plans
- Special Needs Plans (SNPs)
You can compare Medicare Advantage Plans using Medicare’s online tool.
There are 10 categories of Medigap plans (A, B, C, D, F, G, K, L, M, and N). Each plan within a letter category offers the same basic benefits, regardless of the insurance company selling the policy. You can choose the letter plan that works best for you, and compare plans according to price and additional benefits.
For example, Medigap A plans cover Part A coinsurance and hospital costs, Part B coinsurance, Part A hospice care coinsurance, and the first three pints of blood. Plans within Medigap Plan B cover the above plus the Part A deductible.
This applies in all states except Massachusetts, Minnesota, and Wisconsin, which standardize their plans differently.
Enroll in Medicare
Most Americans qualify for Medicare at age 65. Individuals younger than age 65 who have received certain disability benefits for at least two years, or have end-stage renal disease or Lou Gehrig’s disease, may also be eligible. You can confirm your eligibility using the Medicare online eligibility tool.
Medicare enrollment is handled by Social Security:
- If you receive Social Security benefits for at least four months before you turn 65, you’re automatically enrolled in Part A and Part B. Your Medicare card should be mailed to you three months before your birthday.
- If you aren’t receiving Social Security benefits for at least four months before you turn 65, you can call Social Security at 1-800-772-1213, visit a Social Security office, or enroll online.
- If you’ve received disability benefits from Social Security or the Railroad Retirement Board for at least two years, you’re automatically enrolled in Part A and B and should receive your Medicare card in the mail.
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Roseann Birch, Medicare Consultant
With experience in the insurance field since 1986, Roseann Birch is a seasoned Medicare consultant who is passionate in educating and guiding seniors through their Medicare and Medicare Advantage journey.
Leron Moore, Medicare Consultant
With over 10 years of experience in the Medicare industry, Leron Moore has dedicated his career to effecting change, educating, informing, and resolving issues for Medicare patients and their families.