Comparing Medicare Advantage and Medicare Supplement Plans: What's the Difference

Medicare Advantage plans are offered by private insurance companies, which contract with Medicare to provide coverage. This is in contrast to Medicare Supplement plans, which are standardized by the government and sold by private insurance companies.

Medicare Advantage plans often have networks of healthcare providers, which can limit your choices of doctors and hospitals. Medicare Supplement plans, on the other hand, can be used to see any doctor who accepts Medicare.

Medicare Advantage plans typically have lower premiums than Medicare Supplement plans, but may have higher out-of-pocket costs. For example, Medicare Advantage plans may have higher copays for doctor visits or prescriptions.

Medicare Supplement plans, however, can provide more comprehensive coverage, including coverage for deductibles and copays.

Medicare Advantage plans cover the included services of both Parts A and B, and often come with extra benefits like dental, vision, hearing, and prescription drug coverage.

You can expect to pay little to nothing for these plans, with some costing as low as $0/month, although you'll still need to pay your Part B premium.

Medicare Advantage plans often require you to see doctors within their network, but some plans have an out-of-network option, which will cost you more.

Most Medicare Advantage plans offer extended networks within the U.S. and some even provide coverage for emergency services abroad.

If you're looking for prescription drug coverage, most Medicare Advantage plans have you covered, but you can also add Part D coverage if your plan doesn't cover prescriptions.

Medicare Supplement plans, on the other hand, only pay for the out-of-pocket costs that Parts A and B don't cover, such as copays, co-insurances, and deductibles.

You'll need to pay a higher monthly premium for Medicare Supplement plans, but you'll likely have lower copays and co-insurance.

With Medicare Supplement plans, you can see any doctor or hospital that accepts Original Medicare, without needing to worry about network restrictions.

Medicare Supplement plans do offer travel coverage, as long as you stay within the U.S. and the provider accepts Medicare, and you may have some coverage for foreign travel emergencies.

Here's a comparison of the two plans:

Choosing a plan can be a daunting task, but understanding the basics can make it more manageable. You can enroll in Medigap in the first month that you are 65 years old and enrolled in Medicare Part B, and the enrollment period extends for six months.

Standardization of Medigap plans lets you confidently compare insurers' prices for each lettered plan, allowing you to concentrate on choosing the plan that best fits your needs. This means you can compare prices for each plan without worrying about varying coverage.

Plan F provides the most comprehensive coverage, including payment of your annual Medicare Part B deductible ($240 in 2024), but it's not available to people who turned 65 on or after January 1, 2020.

Selecting a plan with a $0 or low annual premium can be important, but it's also essential to analyze costs such as copayments, coinsurance, and hospitalization costs to get an accurate estimate of your annual expenses.

Medicare Advantage plans have varying costs, including premiums, deductibles, copays, and out-of-pocket maximums, which can differ across plans.

Some Medicare Advantage plans may pay a portion of out-of-network care, while others will cover only doctors and facilities within an HMO or PPO network.

It's crucial to consider the quality and size of a particular plan's network, as care is often limited to in-network physicians and hospitals.

Only two Medicare Advantage plans earned a 5-star rating from the National Committee for Quality Assurance (NCQA) in 2024, while 25 earned 4.5 stars and 123 earned a 4-star rating.

You can use the "Compare" tool on Medicare.gov to see a side-by-side comparison of plans and get a better understanding of their costs and benefits.

Medicare Supplement plans, on the other hand, offer standardized coverage, so you can confidently compare insurers' prices for each lettered plan.

All Medigap plans cover Part A coinsurance and hospital costs, but some plans may offer more comprehensive coverage, including payment of your annual Medicare Part B deductible.

Choosing a Medicare Advantage plan can be overwhelming, especially when it comes to choosing a doctor. Original Medicare allows you to see any doctor or hospital that accepts Medicare.

Most Medicare Advantage plans, however, restrict you to in-network service providers. This means you'll need to check if your preferred doctor is part of the plan's network.

You may also need to get a referral from your primary doctor to see a specialist under Medicare Advantage HMO plans. This can be a hassle if you need to see a specialist quickly.

Medicare Advantage PPO plans don't require a referral, which can be a relief if you need to see a specialist. Original Medicare also doesn't require a referral to see a specialist.

Availability of doctors and hospitals can vary by location. If you live in a rural area, you may have fewer options when it comes to choosing a Medicare Advantage plan.

Before choosing a plan, take a moment to consider your total cost of care. This includes not just your premium, but also other expenses like deductibles, copays, and co-insurances.

Your healthcare needs are unique, and understanding them will help you make an informed decision. Are you mainly seeing your doctor for routine care, or are you managing a chronic condition like diabetes?

If you have any upcoming hospital stays or outpatient procedures, factor these into your plan selection. This will help ensure you're covered for any unexpected medical expenses.

Don't underestimate the costs of dental, vision, or hearing care without coverage. These expenses can add up quickly.

If you have monthly prescriptions, make sure they're covered by either your Medicare Advantage plan or by purchasing a separate Prescription Drug Plan.

Medicare Supplement, also known as Medigap, is a type of insurance that helps fill the gaps in Original Medicare coverage.

Many people consider Medigap to cover out-of-pocket expenses that Original Medicare doesn't cover, such as deductibles, coinsurance, and copayments.

Medigap pays costs that would otherwise be your responsibility with Medicare, including your Part A deductible, coinsurance or copayments when you receive care, and care you get when you're traveling overseas.

Original Medicare has gaps in coverage, including prescription drugs, hearing aids, eyeglasses, and dental care, which are not covered by Original Medicare.

To fill these gaps, you can enroll in Original Medicare and purchase a Medigap supplemental policy and a Part D plan for drug coverage.

Medigap is recommended in most situations if you can afford it, as it allows you to seek services from any doctor or hospital in the United States that accepts Medicare, without prior authorization or a referral from a primary care doctor.

Here are some key benefits of Medigap: