Medicare Advantage vs. Medigap plans

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Sometimes, Original Medicare just doesn’t cut it. Perhaps the costs you are left paying after an extended hospital stay are too high. Maybe you need chemo treatments, and the expenses are adding up quickly. Medicare alone does not cover all your medical costs. For instance, there is a $1,364 deductible for hospital stays. For outpatient treatments, beneficiaries pay 20% of the cost. For this reason, many people choose to purchase additional insurance to help cover medical expenses. For those looking for more benefits than what Original Medicare offers, there are two options: Medicare Advantage plans and Medigap plans. It’s important to know that Medicare Advantage plans and Medigap plans cannot be purchased together, and some people choose not to buy either. In 2017, 33% of Medicare beneficiaries decided to purchase a Medicare Advantage plan, and around 20% opted for a Medigap plan. Let’s take a closer look at the benefits of these plans.

Medicare Advantage plans

Medicare Advantage plans are purchased as an alternative to Original Medicare. They are required to provide the same benefits as Original Medicare (Parts A and B) but also usually offer additional benefits, such as prescription drug, vision and dental coverage. Some plans even offer hearing benefits and rides to medical appointments. Medicare Advantage Plans exist primarily as HMOs and PPOs. 

Compared to Medigap, Medicare Advantage is usually more budget-friendly, as the monthly premium is typically lower, sometimes as low as $0! According to the Kaiser Family Foundation, 90% of Medicare beneficiaries can access one or more $0 premium plans. Some plans even rebate all or part of your Medicare part B premium. Although $0 premium plans exist, the average premium for a Medicare Advantage plan with prescription drug coverage is $40 per month. 

With all these benefits, one would think there must be a tradeoff and there is.  Medicare Advantage plans have copays, co-insurance and copays for which the beneficiary is responsible. In 2019, out-of-pocket maximums for Medicare Advantage can be as high as $10,000. In most cases, Medicare Advantage plans also require you to use a network provider to get the lowest cost. Some plans, specifically HMOs, will not cover routine benefits unless you use a plan doctor or hospital. They will, however, cover you at any urgent care or hospital if you have an emergency. 

Medicare Advantage plans are network-based, so your choice of physicians could be limited to those who have opted to accept Medicare Advantage. Not every doctor accepts these plans, and you will have to find one who does. Finding a plan doctor in a rural area could be particularly difficult because these areas often have a shortage of doctors. Want to know if the doctor you currently see accepts Medicare Advantage? Call us at (877)-877-5505, and we’ll check for you!

Pre-existing conditions do not disqualify you from Medicare Advantage plans. The only exception to this is End-Stage Renal Disease. There is an open enrollment period at the close of every year, from October 15 – December 7. You can enroll or dis-enroll during this time, which gives you the freedom and ease to try a plan from a different company. There is talk of allowing people with End-Stage Renal disease to enroll in an MA plans in the future.

Medigap plans

Original Medicare covers expenses related to hospital stays and most other medical services, but it has out of pocket expenses such as deductibles, coinsurance and copays for which the beneficiary is responsible. A Medigap plan provides supplemental coverage to your Original Medicare Plan to pay some or all of these out of pocket cost. Medigap cannot be purchased and used by itself. It must be used as a “supplement” to Original Medicare. 

The most common Medigap plans are:

  • Plan F – Plan F pays 100% of the Medicare Part A and B deductibles, coinsurance and copays. It also covers foreign travel emergencies and Part B excess charges
  • Plan G – Plan G is the same as plan F, except it does not pay the part B Medicare deductible. 
  • Plan N – Plan N is a lot like plan G. It covers the Part A deductible, but not the part B deductible ($185 in 2019). It is different in that you must also pay a doctor copay of up to $20 and an ER copay of up to $50. The ER copay is waved if you are admitted to the hospital. Plan N does not pay the Part B excess charges. It does cover foreign travel emergency.
  • High deductible plan F – The premiums on this plan are substantially lower because it does not pay anything until your Medicare part A and B out of pocket costs are $2300 (2019). If your expenses exceed $2300 the plan will pay just like a plan F for the rest of the year. You would be responsible for paying deductible and the 20% until you reach the $2300 out of pocket threshold.


A Medigap monthly premium is usually higher than that of a Medicare Advantage plan. The most popular Medigap plan, Plan F, averaged $143 per month in 2018. The tradeoff is that Medigap plans typically have very low to no out-of-pocket expenses for services.

Other Costs Associated with Medigap Plans

Unlike Medicare Advantage plans, Medigap plans don’t usually cover things such as prescription drugs, dental, and vision. You can get the extra benefits by purchasing dental, vision, hearing, and Part D prescription plans separately. However, some Medigap plans don’t require copays, and the plans that do have copays and deductibles still have very low limits on out of pocket costs. Even better, Medigap pays doctors directly, without your involvement. Therefore, there are not any claim forms to fill out, and very few medical bills requiring reconciliation.

Medigap plans only include coverage for drugs administered for acute care in a hospital or at your doctor’s office. They never include coverage for prescription drugs received through a pharmacy. Because of this, you will need to purchase a stand-alone Medicare Part D Plan. You can buy a Part D plan to cover prescription drugs for around $30 per month. 

Ease of finding a provider

Any doctor who accepts Medicare accepts Medigap. 90% of doctors in the United States currently accept Medicare, so you will be able to use almost any doctor in the United States. Also, there is no referral necessary to see a specialist. Most doctors we surveyed prefer patients have a Medigap policy with Original Medicare.

How to Qualify

Acceptance to a Medigap plan is not guaranteed. You can be turned down due to a pre-existing condition. The only way to avoid this is to enroll within six months of signing up for Medicare Plan Part B or within six months of turning 65. You may also be eligible for a special enrollment period if you lose other qualifying coverage. You can apply for Medigap at other times, but you run the risk of not being accepted. After your acceptance in the plan, the plan cannot cancel you as long as you pay the required premium.

Which is right for me?

If you typically have high medical costs, you are better off with a Medigap plan. The premiums may be higher, but your out-of-pocket costs will be lower. If you are generally in good health, a Medicare Advantage plan may lower your out of pocket costs. However, due to the medical underwriting required to join a Medigap plan, you cannot wait until you are facing high medical bills to join a Medigap plan. You need to take into consideration what would be best for you in a worst-case scenario. Because after all, the reason you purchase health insurance to cover healthcare costs when you get sick.

There are many things to consider when comparing Medicare Advantage plans to Medigap plans. Whether you’re ready to sign up for a Medicare Advantage or Medigap plan or if you’re still confused about which option is best for you, we can help!

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Justin Brock

President & CEO of Bobby Brock Insurance