Medicare Advantage plans and Medicare Supplement insurance plans are two entirely different types of coverage, with each having its own enrollment process different than Medicare open enrollment.
A Medicare Advantage plan is an alternate way to get your Original Medicare (Part A and Part B) benefits from a private insurance company. Medicare Advantage plans cover everything that Original Medicare covers, at a minimum, and some may even offer extra benefits for things like routine vision, dental, and hearing care. Most also include Medicare Part D coverage for prescription drugs.
Medicare Supplement insurance plans, on the other hand, cover some or all of your out-of-pocket expenses from Original Medicare, such as copayments, coinsurance, and deductibles. They do not cover any costs associated with prescription drugs under Part D, and they can’t be used for out-of-pocket costs under Medicare Advantage. If you have a Medicare Advantage plan, it is against the law for a company to offer you a Medicare Supplement insurance plan, unless you are planning to switch to Original Medicare.
When choosing between Medicare Advantage and Medicare Supplement (Medigap) plans, it’s important to consider cost differences and provider flexibility. Medicare Advantage plans often have lower premiums and include additional benefits like vision, hearing, and dental coverage. However, these plans typically require you to use a network of providers and may need referrals for specialists, which can limit your flexibility.
On the other hand, Medigap plans generally have higher premiums but offer greater provider flexibility, allowing you to see any doctor or specialist who accepts Medicare without network restrictions or referrals. Additionally, while Medicare Advantage plans may include out-of-pocket cost limits, Medigap plans help cover costs such as copayments, coinsurance, and deductibles, which can provide more predictable healthcare expenses.
Differences between Medicare Advantage and Medicare Supplement (Medigap) plans
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Medicare Advantage |
Medicare Supplement (Medigap) |
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Doctor/Hospital Network |
In many cases, you can only use doctors and other providers within the plan’s network and service area for non-emergency care, and you may need to get a referral to see a specialist. |
With a Medigap policy, Medicare pays its share of the approved amount for covered healthcare costs. Typically, the Medigap insurer receives your Part B claim details directly from Medicare, pays the amount you owe under your policy, and covers any remaining costs. Some Medigap insurers offer this service for Part A claims as well.
The cost of your Medigap policy may vary based on several factors: Discounts for women, non-smokers, married individuals, yearly payments, electronic funds transfers, or multiple policies. Premiums can be affected by whether the insurer uses medical underwriting.
Availability of Medicare SELECT policies that require using certain providers, which may offer lower premiums. High-deductible options are provided by the insurer.
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Costs |
Out-of-pocket costs can differ – some plans may have lower or higher costs for specific services. Additionally, you might have to pay an extra premium for certain plans.
You are responsible for paying the monthly Part B premium and may also need to pay the premium for your Medicare Advantage plan. Some plans offer a $0 premium and might assist in covering all or part of your Part B premium. Most plans also include Medicare drug coverage (Part D).
Plans have a yearly limit on what you pay out of pocket for services Medicare Part A and Part B cover. Once you reach your plan’s limit, you’ll pay nothing for services Part A and Part B covers for the rest of the year.
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Medigap policies help cover out-of-pocket costs associated with Original Medicare, like: Copayments, Coinsurance, and Deductibles, Medigap doesn’t cover everything.
Medigap plans generally don’t cover: Long-term care (like non-skilled care you get in a nursing home) Vision or dental care Hearing aids Eyeglasses Private-duty nursing
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Coverage |
Plans must cover all medically necessary services that Original Medicare covers and may offer extra benefits like vision, hearing, and dental services.
Most plans include Medicare drug coverage (Part D), and in most types of Medicare Advantage Plans, you can’t enroll in a separate Medicare drug plan.
In many cases, you may need prior approval from your plan for certain services or supplies.
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Medigap policies help cover out-of-pocket costs associated in Original Medicare, like: Copayments, Coinsurance, and Deductibles, Medigap doesn’t cover everything.
Medigap plans generally don’t cover: Long-term care (like non-skilled care you get in a nursing home) Vision or dental care Hearing aids Eyeglasses Private-duty nursing
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Foreign Travel |
Plans typically do not cover medical care outside the U.S. However, some plans may include a supplemental benefit that provides coverage for emergency and urgent services while traveling internationally. |
When you travel internationally, most plans offer coverage for emergency healthcare with a lifetime cap of $50,000. These plans typically: Cover emergency care abroad if it starts within the first 60 days of your trip and Medicare does not already cover it.
Pay 80% of the costs for necessary emergency care outside the U.S. after you meet an annual deductible of $250. If you have plans E, H, I, and J, which are no longer sold, they still provide coverage for foreign travel.
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