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Is a Medicare Advantage Health Insurance Better Than a Medigap Plan?

September 11, 20238 min read

Is a Medicare Supplement Plan or Medigap Better Than a Medicare Advantage Plan?

When becoming eligible for Medicare, one of the biggest coverage decisions you need to make is whether to get your benefits through Original Medicare plus a Medigap (Medicare Supplement) policy or enroll in a Medicare Advantage Plan. Medigap Plans help pay for Medicare out-of-pocket costs while Medicare Advantage provides an alternate set of Medicare Part A and Part B benefits. Evaluating the key differences between these two options in terms of how they work, what they cover, costs, doctor networks, and other factors enables you to determine which type of plan is a better fit for your healthcare needs and budget.

Medicare Supplement Insurance Overview

When deciding on Medicare coverage, one of your choices is to buy a Medigap policy, also called Medicare Supplement Insurance. Medigap Plans are sold by private health insurance companies and are designed to help fill in the coverage gaps in original or traditional Medicare Parts A and Medicare Part B premium. Policies cover some out-of-pocket costs like copayments, coinsurance, and deductibles. This can minimize your healthcare expenses throughout the year.

To purchase a Medigap policy, you must be enrolled in Medicare Part A and Part B. Medigap will pay secondary to Medicare for covered services. These plans offer a way to reduce your costs with Original Medicare and provide peace of mind. But you will still need a separate Part D insurance plan to cover prescription medications.

Medicare Advantage Plan Basics

Another option for Medicare benefits is enrolling in a Medicare Advantage Plan. These plans are offered by private insurance companies approved by Medicare to provide all of your Part A and Part B coverage. Medicare Advantage Plans offer or replaces your Original Medicare benefits.

As an alternative to Original Medicare, many Medicare Advantage Plans also include Part D prescription drug coverage within the plan. Some common types of Medicare Advantage Plans include HMOs, PPOs, and Private Fee-for-Service plans. Each type works differently regarding  health care provider choice, networks, and how you get care.

With Medicare Advantage, costs like copayments may be lower for some services than with Original Medicare. But provider networks are usually limited compared to Medigap policies.

Comparing Medicare Advantage and Medigap Plan

Medicare Advantage Plans and Medicare Supplement Plan have some key differences:

·        Medigap supplements Original Medicare while Medicare Advantage provides an alternate set of Medicare benefits.

·        Medigap coverage covers some out-of-pocket costs while Medicare Advantage typically has copayments and coinsurance.

·        Medigap allows you to see any Medicare provider nationwide, while Medicare Advantage has network restrictions.

·        Best Medicare Advantage often includes prescription drug coverage, unlike Medigap which requires a separate Medicare Part D Plan for Medicare beneficiaries.

So in summary, when you buy a  Medigap it works with your Original Medicare benefits while Medicare Advantage Plans may replace Medicare with coverage from private insurers. Understanding these differences is key to picking the right type of plan.


Medicare Part B and Medicare Supplement Plan

Since Medigap only works with your Original Medicare benefits, you must be signed up for Medicare Part B to purchase a policy. Part B covers medical services and outpatient care. Along with Part A, it makes up Original Medicare.

Medigap will coordinate with Medicare Parts A and B to minimize your out-of-pocket costs. Its benefits activate after Medicare processes your healthcare claims first.

Some ways Medigap helps reduce Part B expenses include:

·        Covering your Part B coinsurance or copayment amounts

·        Paying for services Part B may not cover

·        Covering excess charges above Medicare-approved amounts

So Medigap is designed to work hand-in-hand with your Medicare Part B benefits covered by Original Medicare. Having both helps lower your medical costs throughout the year.

Health Insurance Considerations

As you age into Medicare, being strategic about your health insurance choices becomes essential. Medicare does not cover all healthcare expenses, so purchasing additional coverage is important.

Both Medigap and Medicare Advantage provide insurance options beyond Original Medicare. With Medigap, you'll still have Medicare managing your benefits. But if you choose Medicare Advantage, the plan administers your benefits instead.

No matter which direction you go, consider factors like:

·        Your total premium costs and out-of-pocket expenses

·        Network flexibility or restrictions

·        Healthcare needs and health services used

·        Doctor and hospital preferences

·        Health maintenance

·        Prescription drug coverage options

·        Travel plans and need for nationwide coverage

Evaluate your budget, health status, providers, medications, and priorities. This will guide you in choosing the type of coverage or optimal health insurance to supplement your Medicare benefits.

Medicare Plan Considerations

One of the biggest Medicare decisions you need to make when becoming eligible at 65 is whether to get your coverage through Original Medicare plus a Medigap policy or a Medicare Advantage Plan. How do you approach this choice?

Here are some key points to consider:

·        Review Medicare Advantage networks to make sure your preferred doctors, specialists, hospitals, and pharmacies are included.

·        Look at the range of premiums, copayments, coinsurance, deductibles, and maximum out-of-pocket costs of each option.

·        Check that any medications you take are covered under the prescription drug formulary of Medicare Advantage Plans.

·        Compare extra benefits offered by Medicare Advantage vs. Medigap's focus solely on Medicare cost-sharing amounts.

·        Weigh regional travel differences - Medigap covers you nationwide while Medicare Advantage has limitations.

Doing your homework by evaluating these factors will help determine if an Advantage Plan or Medigap better addresses your healthcare and budgetary needs.

Prescription Drug Coverage Choices

One key coverage difference between Medigap and Medicare Advantage is how prescription medications are handled.

Most Medicare Advantage Plans include Part D prescription drug coverage within the plan. This covers your medication costs in one policy. There's no need to get a standalone Part D Plan.

With Medigap, policies only cover Medicare out-of-pocket costs. They do not include prescription drug coverage. If you want drug coverage with Original Medicare, you would need to enroll in a separate Part D prescription drug plan.

So with Medicare Advantage, your medical and drug coverage is combined, while Medigap requires purchasing Part D for drug benefits. This is an important distinction when making your Medicare Plan decision.

Choosing Between Medicare Advantage and Original Medicare

As you decide between Medicare Advantage or Original Medicare plus a Medigap policy, consider these tips:

·        Find a local insurance broker that can explain options and costs in detail.

·        Talk to friends and family about their Medicare Plan experiences.

·        Call Medicare helplines to get specific plan information for your region.

·        Use the Medicare Plan Finder tool online to compare plan offerings.

·        Review plan brochures and details available on insurance company websites.

·        Don't just consider the premium, look at total out-of-pocket costs.

Doing your research will provide the information you need to feel confident about picking between Medicare Advantage or Medigap. Focus on your healthcare priorities and budget to make the optimal choice.

Differences Between Medicare Advantage and Other Options

There are several key differences between Medicare Advantage Plans, Original Medicare, and Medigap policies:

Original Medicare

·        Coverage managed directly by Medicare

·        Add Medigap to cover out-of-pocket costs

·        Use any healthcare provider that accepts Medicare

Medicare Advantage

·        Coverage managed by private insurers

·        Usually copays and networks instead of 20% coinsurance

·        Typically more limited provider choices


·        Covers Medicare copays, coinsurance, deductibles

·        Works alongside Original Medicare

·        Allows access to any Medicare provider nationally

Reviewing how these Medicare options work together provides helpful perspective when determining the right approach for your healthcare needs and budget.

Medicare Advantage and Medicare Supplement Differences

Medicare Advantage and Medigap work differently:

·        Medigap fills gaps in Original Medicare while Medicare Advantage provides alternate Medicare benefits.

·        Medigap allows you to see any Medicare doctor or hospital while Medicare Advantage has provider networks.

·        Medicare Advantage often offers additional benefits beyond Medicare while Medigap just handles Medicare cost-sharing.

·        Medicare Advantage typically includes prescription drug coverage unlike Medigap.

These differences demonstrate Medigap supplements Original Medicare whereas Medicare Advantage offers an alternative way to get Medicare benefits through private insurers. Evaluate both options to determine the best approach.

We’re Here to Help

You do not have to spend hours reading articles on the internet to get answers to your Medicare questions. Give the licensed insurance agents at Golden Years Design Benefits a Call at 1-844-254-8998. You will get the answers you seek in a matter of minutes, with no pressure and no sales pitch. We are truly here to help.


Do Medicare Advantage Plans cover prescription drugs?

 Yes, most Medicare Advantage Plans include Medicare Part D prescription drug coverage.

Where can I get help comparing Medicare Plans?

Contact the State Health Insurance Assistance Program for unbiased Medicare Plan guidance.

What does Original Medicare cover?

Original Medicare Parts A and B cover hospital and medical services but not prescriptions or dental. Can I switch from Medicare Advantage back to Original Medicare?

Yes, you can use the annual enrollment period or a special enrollment period to return to Original Medicare if desired.

Do Medigap Plans have provider networks?

No, Medigap policies allow you to see any healthcare provider that accepts Medicare.

When is the best time to enroll in a Medigap Plan?

 Enroll during your open enrollment period when you're first eligible to get a Medigap policy without medical underwriting.

 Do many Medicare Advantage Plans offer extra benefits?

 Yes, many Medicare Advantage Plans offer additional benefits like dental, vision, hearing, and more.

If I'm on Medicare, do I have to buy a Medigap policy?

No, Medigap is optional additional coverage to consider based on your needs.

 Are Medicare Advantage Plans an alternative to Medigap?

Yes, Medicare Advantage provides an alternative way to get Medicare benefits compared to Original Medicare with a Medigap policy.

Can I be on Medicare if I'm not 65 yet?

Yes, if you're disabled you can qualify for Medicare before age 65 if you've been enrolled in Medicare Part B for two years.

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