Essential Differences between Medigap and Medicare Advantage

Category: Medicare Originally Posted: January 11, 2016 by Howard Yeh Last modified: February 18, 2016

What are the key differences between Medicare Advantage and Medigap? Both Medigap insurance and Medicare Advantage plans offer private-market medical coverage for Medicare beneficiaries. However, there are key differences between Medigap and Medicare Advantage in what coverage is provided, and by whom, that we explore in this comparison chart.




Medigap (Medicare Supplement Insurance)

Medicare Advantage

How it relates to Original Medicare Parts A & B Private supplemental coverage that pays all or most Part A & B out-of-pocket costs. Private health plan that provides Part A & B benefits directly in place of Original Medicare.
Premium Average of about $150 to $200 a month. Can vary by age, health history, or both. $0 to more than $100 a month depending on the plan. All plan enrollees pay the same regardless of age or health history.
Out-of-pocket costs Low to none (not counting premium). In-network medical deductibles and copays of up to $3,400 to $6,700 a year, depending on the plan.
Choice of doctors and hospitals Any that participate in Medicare. HMOs: Plan providers only.PPOs: Any provider, but out-of-network providers cost more.
When you can buy First six months after you sign up for Part B and are at least 65 years old. After that, in most states you can be turned down or charged extra for pre-existing conditions. When you first enroll in both Medicare A and B and annually thereafter during Open Enrollment (Oct. 15-Dec. 7).
Part D (drug) coverage Not included. You must buy a separate Part D plan for this. Most plans include Part D coverage.
Travel extra Better solution for those who travel often or maintain two homes.  If you travel often, you may out of network and pay. 
Quality information available No. There are no standardized ratings for Medigap plans. Yes. has star ratings (5 stars are the best). Consumer Reports has Medicare Advantage quality rankings from NCQA.
Do benefits change each year Not usually. Once a year. It is important to review your coverage. 
Cards in your purse or wallet Three. 1. Red, white, and blue Medicare card. 2. Medigap card. 3. Part D card. Usually just one Medicare Advantage card. The red, white, and blue Medicare card can stay in your desk drawer.
Paperwork Little to none. Medigap almost always automatically cuts a check to providers after Medicare pays its share. Some, because you pay deductibles and copays directly to providers.