Medigap vs Medicare Advantage: What's the Difference?

Medigap, also called Medicare Supplement Insurance, is sold by private insurers. It works alongside Original Medicare (Parts A and B) and may help pay some out-of-pocket costs that Original Medicare leaves, such as certain deductibles, coinsurance and copayments. Standardized plan letters exist, but availability varies by state and insurer.

Medicare Advantage, also called Part C, is an alternative way to receive your Medicare benefits through a private insurance plan. These plans must cover what Original Medicare covers, and many add extras such as drug coverage, dental, vision or hearing. They commonly use provider networks and may have their own copays and yearly out-of-pocket limits.

So the core difference is structure. With Medigap, you keep Original Medicare and add a supplement. With Medicare Advantage, a private plan replaces how you receive Original Medicare. Plan details, costs and enrollment rules vary, so confirm specifics on Medicare.gov or with a licensed agent.

Many people have traditionally chosen Medigap with Original Medicare because they value the ability to see providers who accept Medicare nationwide and like more predictable costs when they receive care. Trade-offs can include a separate monthly premium for the supplement and a separate drug plan.

Others have traditionally chosen Medicare Advantage because of its bundled benefits, often lower or no added monthly premium beyond Part B, and extra benefits. Trade-offs can include provider networks, referral or prior-authorization rules, and copays that vary by service.

Timing matters in both cases. There are enrollment windows and, in some situations, rules about health questions or switching later. Because these rules vary by situation and state, people often review them with a licensed professional before deciding.

A licensed Medicare agent may help you compare the options available where you live. A visit or call is generally a conversation about your doctors, prescriptions, budget, travel habits and comfort with networks. The agent may then walk through plans that could fit, and explain the trade-offs of each.

Helpful questions to ask include: Which plans are available in my area? Are my doctors and pharmacies in the network? What are the premiums, deductibles, copays and yearly out-of-pocket limits? How do rules change if I move or travel? Do you represent multiple insurance companies?

A personal finance educator may also help you think through how health costs fit into your wider retirement picture. Our free calculators at /calculators can help you explore budgeting, and Policy Valet may be a helpful sister site if you want a policy reviewed.