How are Medigap and Medicare Advantage different?

ByDonald L. Leech

Jun 8, 2022

Even though private insurers sell Medigap plans, federal rules standardize coverage. Insurers can offer up to 10 different plans, each labeled with a letter. (See the chart below for more details.) Plans with the same letter include the same benefits even though different insurance companies offer them, but premiums can vary significantly.

You can go to any doctor who accepts Medicare and Medigap will fill in the gaps. Medigap does not cover prescription drugs. If you have traditional health insurance and want drug coverage, you will need to obtain a standalone Part D prescription drug policy.

How and when to buy a Medigap policy

You can purchase a Medigap policy whenever you have Medicare Parts A and B. This insurance does not have an open enrollment period during certain times of the year, such as the Medicare Advantage and Part D plans.

But insurers can dismiss you or charge you more if you have pre-existing conditions, unless you buy a policy at certain times, such as within six months of enrolling in Medicare Part B if you’re 65 or older. Medigap insurers must also offer you a policy regardless of pre-existing conditions in other situations, such as if you had been enrolled in a Medicare Advantage plan and moved outside of the plan’s service area.

If you qualify for Medicare before age 65 because of a disability, federal Medigap rules do not protect you from being disallowed or charged additional fees because of your medical condition. But some states have additional protections for people under or over 65 who might struggle to get the lowest prices. Contact your National Health Insurance Assistance Program (SHIP) to find out more about the rules in your area.

You can learn more about Medigap plans available in your area at or your state insurance department.

How Medicare Advantage is different from Medigap

Medicare Advantage, also known as Medicare Part C, is an all-in-one alternative to Original Medicare. Private insurance companies offer Medicare-approved Medicare Advantage plans, and they bundle Part A hospital coverage, Part B physician and outpatient services, and usually Part D prescription drug coverage into one package. single package.

If you decide to get coverage through a Medicare Advantage plan, you will still need to enroll in Medicare Parts A and B, including paying premiums for Part A, if you don’t qualify for it for free, and the part B. But then you can choose a Medicare Advantage plan and sign up with a private insurer.

The federal government requires Medicare Advantage plans to cover everything Medicare Parts A and B cover, but they may have different deductibles and copayments. Most Medicare Advantage plans also cover prescription drugs, and many also help pay for services that original Medicare doesn’t cover, such as routine dental, hearing, and vision care.

Unlike original Medicare, which covers all doctors and other providers who accept Medicare, most Medicare Advantage plans have a network of providers and may or may not charge more to cover doctors or facilities outside of a plan’s network. .

The two most common types of Medicare Advantage plans are Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs). With HMOs, you typically don’t have coverage for out-of-network providers except in an emergency. PPOs also have a network of doctors, hospitals and other facilities. You may get coverage if you go out of a plan’s network, but you’ll usually have higher copayments and other out-of-pocket costs.

All Medicare Advantage plans have federal rules that limit annual out-of-pocket costs for services covered by Medicare Parts A and B. In 2022, this represents $7,550 or less for in-network health services and $11,300 or less for in-network covered services. and combined off-grid services.

How and when to buy a Medicare Advantage plan

Before you can get a Medicare Advantage plan, you must enroll in Medicare Parts A and B, including the $170.10 per month Part B premium for most people in 2022. You may also need to pay a monthly premium to the Medicare Advantage insurer. The average premium for Medicare Advantage enrollees is $19 in 2022, but more than half of plans charge no premium.

You can compare premiums, copayments, and coverage for Medicare Advantage plans in your area, including copayments for your medications, by using Medicare’s plan finder. You can register through the Plan Finder or directly with the plan.

You can get a Medicare Advantage plan when you first enroll in Medicare or in other situations, such as within two months of losing employer coverage. Otherwise, you must wait for open enrollment from October 15 to December 7 for coverage from January 1. Pre-existing conditions do not affect eligibility for Medicare Advantage.

How to choose between Medigap and Medicare Advantage

When considering buying a Medigap policy or enrolling in a Medicare Advantage plan, the key decision is whether you want to get your federal government coverage through original Medicare or through a private insurer that offers Medicare Advantage plans.

If you choose Original Medicare, you can use any doctor and facility that accepts Medicare. But you’ll need to purchase separate Medigap and Part D drug coverage to fill in the gaps.

If you choose Medicare Advantage, you may have low or no premiums beyond your monthly Part B premiums. But the additional expenses you pay out of pocket will likely be different, especially as you use more services. medical. You usually need to use a provider network. If you go to an out-of-network doctor, the visit may not be covered or you may have a higher co-payment.

Most Medicare Advantage plans include prescription drug coverage. Those without are designed for enrollees who have drug coverage from a previous or current employer or other source. You won’t have to buy a separate Part D.

keep in mind

If you enroll in a Medicare Advantage plan, you cannot use a Medigap policy to cover your personal expenses. You will therefore have to pay any deductible, copayment or co-insurance yourself. It is illegal for an insurance company to sell you a Medigap policy if you are enrolled in a Medicare Advantage plan.