Medicare Advantage vs Medigap

Medicare Advantage vs Medigap

August 26, 2021

Q: Should I choose a Medicare Advantage plan or a Medigap plan?

A: Each option has its advantages and disadvantages.  Medicare Supplement Insurance plans, also known as Medigap plans:

  • Allow you to go to any doctor or hospital in the U.S. and its territories that accepts Medicare, which is most of them.
  • They are Guaranteed Renewable which means that if you continue paying the premium, your coverage cannot be terminated. The only person who can remove you is you.
  • Have unrestricted enrollment. You can change plans as often as you like, subject to underwriting.  Note:  New York does not allow underwriting if you have not exceeded 63 days without creditable coverage.
  • Medicare supplement plans have a monthly premium, and if you want drug coverage, you will incur an additional premium for a stand-alone Medicare Prescription Drug Plan (Part D).

Medicare Advantage plans offer low to zero monthly premiums.  They are pay as you go.  Each visit to the doctor will be subject to either a deductible, a copay or co-insurance.

Medicare Advantage plans often include prescription drug coverage at no additional cost.

Other benefits are sometimes included such as vision, dental, hearing and much more. 

In most cases you must get a referral to see a specialist in Medicare Advantage HMO plans.  Certain services, like yearly screening mammograms, don’t require a referral. 

Medicare Advantage plans are yearly contracts and change annually which requires an annual review on your part.  Your physician and hospital network may change during the calendar year as well.

Think of a Medicare Supplement (Medigap) when…

  • You don’t want to pay copays/coinsurances
  • You don’t like the idea of a network
  • You can’t afford a surprise $1,500+ hospital copay
  • You are dealing with a dread disease like cancer
  • You are a snowbird and/or travel a lot

Think of Medicare Advantage when…

  • You cannot afford a monthly Medicare Supplement (Medigap) premium
  • You are comfortable with a network of doctors/hospitals
  • You are looking for ancillary benefits
  • You rarely travel and do not spend winters somewhere else
  • You are looking to reduce monthly expenses

There are other things to keep in mind when deciding between a Medicare Supplement and Medicare Advantage plan.  This should provide you with a good start.