Medigap vs. Medicare Advantage—How Do I Choose?

It is important to understand the difference between a Medicare supplement and a Medicare Advantage plan. They are not the same—in fact, they work very differently. With an understanding of how each plan works, we help you determine which kind of plan might best suit you. Some important things to consider are:

  • Do your physicians accept Medicare Advantage plans or do they only accept original Medicare?
  • Are your preferred hospitals in the Medicare Advantage network?
  • Are you a frequent traveler? If so, you might find original Medicare with a Medicare supplement to be a good fit for you since you can use it for any doctor or hospital in the country that accepts Medicare.
  • Can you predict your health spending by year? If you have a year of heavy health spending, do you have enough savings to pay the possible out-of-pocket maximum that a Medicare Advantage plan might require? In other words, the monthly premium for a Medicare Advantage plan may be substantially lower than for a Medicare Supplement, but the out-of-pocket expenses can be substantially higher if you are hospitalized or need tests in a given year.
  • Which would you prefer? Are you a person who will sleep better at night if you have a lower premium and just pay for services as you go? If so, you might be a good candidate for a Medicare Advantage plan. Or, if unexpected expenses will worry you, or if you won’t have the funds to pay for them as needed, a Medicare supplement could give you the peace of mind of knowing exactly what medical spending you will incur regardless of your health. You pay a higher monthly premium, but there are few unexpected expenses.

There are certain groups of individuals who may be more suited toward Medigap plans. These include frequent travelers who intend to make some travel around the nation during their retirement. Choosing original Medicare and a supplement allows these individuals to access any Medicare provider in the nation.

While Medicare Advantage plans have out-of-area benefits for emergencies and urgent care, people who may live in another state during the winter may have doctors in both locations and want to access familiar health care providers regardless of which state they happen to be in at the time. Additionally a person who has had a rich benefits plan in place for many years as an employee or business owner will often enjoy the flexibility of Medigap plans, which have no network restrictions and require no referrals to see specialists.