Choosing health insurance is a crucial decision for your health and future. Fortunately, when it comes to choosing Medicare coverage, you’ve got options.
While original Medicare covers your basic hospital and outpatient medical needs, you may also want additional coverage for things like medications, vision, and dental. Original Medicare also leaves you with a few different costs like deductibles, premiums, and other out-of-pocket medical expenses.
Learn the differences between Medicare Advantage and Medigap plans and how they can help provide additional coverage.
Medicare Advantage (Part C) and Medicare Supplement (Medigap) are additional plans that pair with your original Medicare (parts A and B). They may offer you the customization you need to meet your individual healthcare needs.
Both plans are designed to offer coverage that other parts of Medicare may not. However, you may not purchase both Medicare Advantage and Medigap.
If you want additional Medicare coverage, you must choose either Medicare Advantage or Medigap.
To help you compare, here are both plans side by side:
| Medicare Advantage (Part C) | Medicare supplement (Medigap) | |
|---|---|---|
| Costs | varies by plan provider | varies by age and plan provider |
| Eligibility | age 65 or older, enrolled in parts A and B | age varies by state, enrolled in parts A and B |
| Specific coverage | everything covered by parts A, B (sometimes D), and some additional benefits for hearing, vision, and dental; offerings vary by provider | costs like copayments and coinsurance; doesn’t cover dental, vision, or hearing |
| Worldwide coverage | you must be within your plan’s coverage area | plans for emergency coverage within 60 days of your international trip |
| Spousal coverage | individuals must have their own policy | individuals must have their own policy |
| When to purchase | during open enrollment, or your initial enrollment in parts A and B (3 months before and after 65th birthday) | during open enrollment, or your initial enrollment in parts A and B (3 months before and after 65th birthday) |
Medicare Advantage plans are private insurance options for Medicare coverage. Here is an overview of the coverage, costs, and eligibility rules for Medicare Advantage.
Medicare Advantage coverage
These plans cover what original Medicare does, including:
- hospitalization
- medical services
- prescription drugs
Depending on the Medicare Advantage plan you choose, your plan may also cover:
- dental
- vision
- hearing
- gym memberships
- transportation to medical appointments
Medicare Advantage costs
Much like any other insurance plan, Medicare advantage premiums vary depending on the provider and the plan you choose.
Some plans don’t have a monthly premium, while others charge several hundred dollars. However, it’s unlikely you’ll pay more for your Part C premium than the one for Part B.
Additionally, costs like copays and deductibles will also vary by plan. Your best bet when determining potential costs for your Medicare Advantage plan is to carefully compare plans while you shop.
Other factors that may affect the cost of Medicare Advantage plans include:
- how often you want access to medical services
- where you receive your medical care (in network or out of network)
- your income (this may be used to determine your premium, deductible, and copays amount)
- if you have financial assistance like Medicaid or disability
Medicare Advantage eligibility
To be eligible for Medicare Advantage:
- You must be enrolled in original Medicare (Medicare parts A and B).
- You must live in the service area of a Medicare Advantage insurance provider that’s offering the coverage/price you want and that’s accepting new users during your enrollment period.
Medicare supplement (Medigap) plans are optional insurance products that help pay for the out-of-pocket costs of your original Medicare coverage. Learn more about the coverage, costs, and eligibility for Medigap below.
Medigap coverage
Medigap is a different set of plans that help cover out-of-pocket costs not covered by your original Medicare plan. These costs can include:
- Medicare Part A coinsurance and hospital fees
- Medicare Part A hospice coinsurance or copayment costs
- Medicare Part B coinsurance or copayment costs
- blood transfusion costs, up to the first 3 pints
- skilled nursing facility coinsurance
- Medicare Part A deductible
- Medicare Part B deductible
- Medicare Part B excess charges
- emergency medical costs during foreign travel
There are currently 10 different Medigap plans available: A, B, C, D, F, G, K, L, M, and N.
As of January 1, 2020, newly purchased Medigap plans don’t cover Part B deductibles. This means you cannot purchase Plan C or Plan F if you became eligible for Medicare in 2020 and onward.
You can purchase Medigap in addition to your other original Medicare coverage (parts A, B, or D).
Medigap costs
Again, each insurance plan varies in price based on your eligibility and the type of coverage you want.
With Medicare Supplement plans, the more coverage you want, the higher the cost. Additionally, the older you are when you enroll, the higher a premium you may have.
Factors that may affect the cost of your Medigap coverage include:
- your age (the older you are when you apply, the more you may pay)
- the plan you choose
- if you qualify for a discount (nonsmoker, female, paying electronically, etc.)
- your deductible (a higher deductible plan may cost less)
- when you purchased your plan (rules can change, and an older plan may cost less)
Medigap eligibility
You are eligible to apply for a Medicare plan, and add a Medigap policy, during the 3 months before, 3 months after, and month of your 65th birthday.
Insurance companies aren’t required to sell you a Medigap policy, especially if you’re under age 65.
Once the initial enrollment period and open enrollment period have passed, you may have a harder time finding an insurance company that will sell you a plan. As soon as you enroll in Medicare Part B, you should apply for a Medigap policy if you’d like one.
If you still aren’t sure if a Medicare Advantage plan or a Medigap plan is right for you, review the following factors to consider when weighing each option.
Medicare Advantage considerations
Medicare Advantage may be a good fit for you if:
- You already have parts A, B, and D.
- You have an approved provider you already like, and you know they accept Medicare and Medicare Advantage plans.
- You want additional covered benefits, like hearing, vision, and dental.
- You’d rather manage one plan for all of your insurance needs.
Medicare Advantage may not be a good fit for you if:
- You travel extensively or plan to while on Medicare. (You must live within your plan’s coverage area, except for emergencies.)
- You want to keep the same provider each year. (The requirements for approved providers change annually.)
- You want to keep the same rate. (Rates change annually.)
- You’re concerned about paying for extra coverage you won’t use.
Medigap considerations
Medigap coverage may be a good fit for you if:
- You prefer to choose the amount of coverage for out-of-pocket expenses you’re purchasing.
- You need help covering out-of-pocket expenses.
- You already have the coverage you need for vision, dental, or hearing.
- You plan on traveling outside of the United States and want to be prepared.
Medigap coverage may not be a good fit for you if:
- You already have a Medicare Advantage plan. (It’s illegal for a company to sell you Medigap when you already have Medicare Advantage.)
- You want coverage for extended long-term or hospice care.
- You don’t use much healthcare and don’t usually meet your annual deductible.
- There are many different plan options if you want additional Medicare coverage.
- Medicare Advantage covers your part A, B, and often D plans and more.
- Medigap helps pay out-of-pocket costs like copays and coinsurance.
- You can’t purchase both of these types of plans, so it’s important to consider your needs and choose the option that best meets them.