Understanding the Difference Between Medigap and Medicare Advantage

Medicare is the primary source of health insurance for individuals over 65. It can provide significant benefits, but there are limitations to what it covers that could leave you paying out of pocket for some care. Medigap and Medicare Advantage plans are optional private insurance plans that can help you cover expenses that traditional Medicare doesn’t pay for.

While both may be good options, they do not work the same way. Understanding the difference between Medigap and Medicare Advantage can help you better navigate your healthcare options in retirement and decide which coverage option is the right choice for you.

What Is Medigap?

Medigap, also known as Medicare supplemental insurance, is a type of private insurance you can purchase in addition to Medicare. As the name suggests, it fills in the gaps left by Medicare to reduce your out-of-pocket costs. This includes copayments, coinsurance, and deductibles you’re required to pay with Medicare. Depending on the plan you choose, Medigap may even pay for some care or treatments that Medicare doesn’t cover.

How It Works

Different Medigap plans are identified by letters A–D, F, G, and K–N. Although you purchase Medigap policies from private insurance companies, the policy options are standardized, so a K plan from one insurance company provides the same coverage as a K plan from another.

The table below from Medicare.gov shows what each Medigap plan covers:

Benefit	A	B	C	D	F*	G*	K	L	M	N
Part A coinsurance and hospital costs (up to 365 additional days)	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓
Part B coinsurance/copayment	✓	✓	✓	✓	✓	✓	50%	75%	✓	✓**
Blood (first 3 pints)	✓	✓	✓	✓	✓	✓	50%	75%	✓	✓
Part A hospice care coinsurance/copayment	✓	✓	✓	✓	✓	✓	50%	75%	✓	✓
Skilled nursing facility care coinsurance	✗	✗	✓	✓	✓	✓	50%	75%	✓	✓
Part A deductible	✗	✓	✓	✓	✓	✓	50%	75%	50%	✓
Part B deductible	✗	✗	✓	✗	✓	✗	✗	✗	✗	✗
Part B excess charges	✗	✗	✗	✗	✓	✓	✗	✗	✗	✗
Foreign travel emergency (up to plan limits)	✗	✗	80%	80%	80%	80%	✗	✗	80%	80%
Out‑of‑pocket limit (2025)	N/A	N/A	N/A	N/A	N/A	N/A	$7,220	$3,610	N/A	N/A

*Plans F and G offer a high deductible plan in some states.

**Plan N pays 100% of the costs of Part B services, except for copayments for some office visits and some emergency room visits.

When To Sign Up

You can purchase a Medigap policy at any time, but the optimal time is typically during the Medigap Open Enrollment period. This is a six-month window that begins the month you are both:

at least 65, and
enrolled in Medicare Part B.

When you purchase a Medigap policy during this period, you’re guaranteed coverage at the standard rate. If you purchase a Medigap policy outside of this timeframe, you may have to go through additional medical underwriting that could result in a higher premium or even coverage denial.

What Is Medicare Advantage?

Medicare Advantage is another type of private health insurance you can purchase on your own. Unlike Medigap, which is an addition to Medicare, Medicare Advantage plans replace it and typically provide additional coverage, as well. Also called Medicare Part C, it combines your Medicare Parts A and B. Most Medicare Advantage plans also include a Part D drug plan and provide additional coverage for things like hearing, dental, or vision care.

How It Works

Medicare Advantage plans function very similarly to the health insurance coverage you’d get through a group plan at work. You’ll get the optimal price for care provided by a network of healthcare professionals and pay more out of pocket for treatment you receive from out-of-network providers.

When To Sign Up

There are several different times when you can enroll in or switch Medicare Advantage plans:

You can choose to enroll in a Medicare Advantage plan when you first become eligible for Medicare.
You can purchase, drop, or switch Medicare Advantage plans during the regular Medicare Open Enrollment period from October 15 to December 7 of each year.
If you’re already enrolled in a Medicare Advantage plan, then you may switch to another one or drop coverage during the Medicare Open Enrollment period, which runs from January 1 to March 31 each year.

You may also be able to sign up for Medicare Advantage during special enrollment periods, such as if you move out of your plan’s service area or lose other insurance coverage.

Medigap vs. Medicare

Both types of plans can help you cover out-of-pocket costs or pay for care not typically covered by Medicare. Neither is right for everyone, and there are benefits and drawbacks to each.

Medigap plans primarily cover out-of-pocket costs associated with Medicare Parts A and B. You may pay a higher premium compared to Medicare Advantage, but face lower out-of-pocket expenses.
Medicare Advantage plans replace Medicare and provide additional coverage. You may pay a lower premium, but could still face higher out-of-pocket costs.

Feature	Medigap	Medicare Advantage
Primary Insurance	Secondary to Medicare	Replaces Medicare
Coverage	Medicare out-of-pocket costs, such as coinsurance, copays, and deductibles	Same as Medicare plus Part D and other services, such as dental, vision, and hearing
Provider Access	Any healthcare provider who accepts Medicare	Limited to a network of providers
Costs	Higher premiums but lower out-of-pocket costs	Lower premiums but may have higher out-of-pocket costs
Referral needed for specialists?	No	Typically, yes
Maximum out-of-pocket costs?	No cap, but Medigap may cover	Yes

When Should You Consider Medicare Advantage?

Consider a Medicare Advantage plan if you have access to a robust network of healthcare providers that offer the services you need or think that a Medigap policy is too expensive for your budget.

When Should You Consider Medigap?

Medigap plans may be better if you can afford the premium and want to minimize your potential out-of-pocket costs. They’re also a better choice if you prefer the flexibility to see any healthcare provider you choose.

Understanding the Difference Between Medigap and Medicare Advantage

By understanding the key differences between Medigap and Medicare Advantage, you can make a confident decision that helps ensure your health coverage in retirement is cost-effective and provides the optimal coverage for your personal situation, needs, and budget.

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