Medigap vs Medicare Advantage: Which Plan Is Right for You?

Medigap vs Medicare Advantage

We’ve said it before: Medicare is a great program, but it can be confusing. Not in how it works, that’s fairly straightforward. But sifting through your plan options and deciding which one offers you the best coverage at the best price? That can be a challenge.

One of the toughest choices you make is whether you’d be better off with Original Medicare plus a Part D plan and Medigap, or just a Medicare Advantage plan. Unfortunately, there is no single answer to that question. Everything depends on your particular circumstances. But, we can describe the differences and benefits to help you decide.

For this piece, we’re going to assume you know the Medicare basics. If not, our Medicare 101 post makes great prerequisite reading.

Option One: Original Medicare Plus Medigap

Original Medicare includes Part A, hospital insurance, and Part B, medical insurance. You round out your coverage with a Part D Prescription Drug Plan.

For each of these parts, you have a variety of costs, including your monthly premiums, deductibles, co-insurance, and co-pays. These are the “gaps” people refer to when they talk about coverage gaps. When your health is mainly good, they don’t present much of a problem. It’s when you have an accident or serious illness that these gaps seem more like gaping holes.

What Happens When Catastrophe Strikes?

If you have a serious illness or an accident that requires hospitalization, your coverage gaps can lead to serious financial consequences. Let’s start with your Part A deductible.

This amount changes every year. In 2018, it’s $1,340 per benefit period. The kicker here is that you can have multiple benefit periods in a single year. Unlike Part B, which categorizes each calendar year as a benefit period, Part A looks like this:

  • The benefit period begins when you are admitted to the hospital
  • The benefit period ends 60 days after you are released from the hospital
  • A new benefit period begins if you are admitted to the hospital on day 61 or later

So, if you have surgery on January 1 and are released on January 3, your benefit period ends March 4. Readmittance to the hospital any time after that marks a new benefit period – and a new deductible.

If your hospital stay is a long one – over 60 days – your Part A co-insurance responsibility kicks in. For days 61 through 90, that’s $335 per day (per 2018 rates).

Medigap vs Medicare Advantage

Medicare also charges you co-insurance for the Part B portion of the care you receive in a hospital. Once you meet your yearly deductible, which is $183 in 2018, you pay 20 percent of the costs covered by Part B. Even if your hospital stay isn’t a lengthy one, you could still owe tens of thousands of dollars after a serious procedure.

How Medigap Helps

These worst-case scenarios are why many Medicare beneficiaries buy a Medigap policy. Coverage and costs vary according to the plan you choose. Unfortunately, none of the Medigap plans cover every cost. For example, they don’t cover your Part D premium or prescription co-pays. Medigap also doesn’t cover your monthly premium, although most of the plans cover 100 percent of your Part A deductible.

Start comparing Medigap plan coverage here and, if you have questions, you can schedule an appointment with one of our licensed agents. They’ll walk you through Medigap plan options to help you determine which ones best meet your needs. You can learn more about Medicare Supplement Insurance by reading our Everything You Need to Know about Medigap post.

Option 2: Medicare Advantage

Medicare Advantage (MA), also known as Medicare Part C, more closely resembles private health insurance. Most MA plans have a monthly premium, which you pay in addition to your Part B premium (most people get premium-free Part A).

Medigap vs Medicare Advantage

These plans are required to cover everything included in Original Medicare, but most of them offer additional services. This typically means prescription drug coverage, so you don’t need a Part D plan, but it may also include routine vision and dental. Details and costs vary by plan.

Your costs in Medicare Advantage are typically lower than your costs in Original Medicare. Instead of the 20 percent co-insurance you have with Part B, most MA plans have only a small co-pay for doctor visits, diagnostics, and even surgeries.

Start comparing plans here. Just choose your state, enter your zip code, and you’ll see which plans are available in your area.

So, Which Option Is Better?

Unfortunately, you can’t have both a Medigap and a Medicare Advantage plan. That means you have to choose which option offers the best benefits at the best price. The answer depends on your situation. You want to consider three items: cost, provider options, and how often you travel.

  • Cost: Medigap plans typically have higher monthly premiums than Medicare Advantage plans do. However, that difference may be offset by lower out-of-pocket costs with Medigap. It all depends on which MA plans are available in your area and the services they offer.
  • Provider options: Most MA plans have provider networks, especially if you choose the HMO or PPO options. Compare the plan’s network to your current providers. If your doctor isn’t covered, and you aren’t willing to change providers, MA may not work for you.
  • Travel: If you travel a lot, or live the snow bird lifestyle, you probably want to stick with Original Medicare and a Medigap policy. Most Advantage plans are area-specific; they won’t cover care received outside of your network. Original Medicare and Medigap cover you in all 50 states, so long as your provider accepts Medicare.

Making Your Choice

Weigh your options carefully and read everything you can. If you still have questions, call us toll-free at 855-350-8101. One of our licensed agents can walk you through your options to find the best plan to meet your needs.

Paula Walker

Paula Walker

Licensed Insurance Agent at Medicare Solutions
For over a decade, Paula Walker has advised clients across the country on their insurance needs. Although she has sold a variety of insurance policy types, Paula's first love is Medicare, because it lets her make a difference in people's lives every day. She takes a great deal of pride in helping Medicare recipients. Raised by her grandparents and seeing the power of the program firsthand, Paula approaches each client as though she were helping a relative find the perfect plan. She believes that the customer always comes first, which Paula says is easy when she works for such amazing clients.
Paula Walker
Paula Walker

Author: Paula Walker

For over a decade, Paula Walker has advised clients across the country on their insurance needs. Although she has sold a variety of insurance policy types, Paula's first love is Medicare, because it lets her make a difference in people's lives every day. She takes a great deal of pride in helping Medicare recipients. Raised by her grandparents and seeing the power of the program firsthand, Paula approaches each client as though she were helping a relative find the perfect plan. She believes that the customer always comes first, which Paula says is easy when she works for such amazing clients.

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