| Medigap | Medicare Advantage | |
|---|---|---|
| Coverage for Prescription Drugs | No | Forks |
| Coverage for Out-of-Pocket Costs | Will pay some (or all) of Medicare coinsurance; the amount depends on the plan | Offers many options for deductibles, copayments, and/or coinsurance |
| Choice of Doctors | Valid with any doctor who accepts Medicare | May have additional limits or restrictions |
| Dental or Vision Care | No | Yes, many plans offer this |
| Coverage out of State | Forks | Maybe, subject to limits or exclusions per the plan |
| Coverage out of Country | Forks | No |
| Extra Medical Benefits | No | Forks |
Both Medicare Advantage and Medigap are health plans that are provided by private insurers. But just like Medicare, their coverage basics are regulated by the government. Each one has its own pros and cons, whether providing you with more coverage or helping to lower your out-of-pocket costs.
Prescription Coverage
Medigap does not cover the cost of prescription drugs. If you want to add that on to Medigap, you’ll need Medicare Part D. Most Medicare Advantage plans include prescription drug coverage.
Coverage for Out-of-Pocket Costs
Medicare Part B covers 80% of your health care costs, which then leaves 20% for you to pay for the rest on your own. Standard Medicare has no out-of-pocket maximum, so that 20% could add up to a lot of money if you have a lot of medical needs.
Medigap can help cover that 20% Medicare co-pay or part of the deductibles which you would have to pay out of pocket with Basic Medicare coverage. Some of the Medigap plans also include maximum out-of-pocket limits. The scope of coverage depends on the Medigap plan you choose.
Medicare Advantage has maximum limits for out-of-pocket costs, so it can save you money in the long term compared to Medicare Basic. These costs vary based on the details of your plan.
note
Medigap open enrollment allows you to get a Medigap plan, without regard to the state of your health, for a limited time. It occurs for a 180-day window after the date when Part B goes into effect. Outside of this time, Medigap uses medical underwriting, which means you may be denied due to preexisting conditions.
Choice of Doctors
Since Medigap is supplemental Medicare, you can use your plan at any US health care provider that accepts Medicare. Some plans will even cover the cost of your health care outside the US
Medicare Advantage may have its own limits in terms of network or type of doctor (such as a specialist), and may restrict more. The plan may cover some providers outside of your network, but these are subject to varied rates, depending on the plan you choose.
Dental or Vision Care
Medigap is only designed for standard health care, so it doesn’t cover dental and vision care. Many Medicare Advantage plans do include dental, vision, or both.
Coverage Outside the State or Country
If you tend to travel a lot, Medigap has a clear bonus for you. It works anywhere that Medicare is accepted, whether you’re in or out of state. Many plans cover health care outside the US, as well, for certain emergencies.
Medicare Advantage may be limited for out-of-state travel, and it does not apply for travel outside the US
Additional Medical Benefits
In terms of extra perks, Medicare Advantage is the clear winner over Medigap. Since Medigap is designed only to supplement your existing Medicare coverage, it doesn’t offer any extra benefits above the standard plan.
Medicare Advantage, on the other hand, offers many, such as:
- Custom plans for certain chronic conditions
- Coverage for transportation to doctor’s visits
- Health and wellness services
- Hearing coverage
- Fitness programs
note
You cannot have a Medigap plan and to Medicare Advantage plan; you will have to choose one or the other.
Which Is Right for You?
Choosing supplemental or additional Medicare coverage comes down to your own health care needs.
Using the table above, you can see that if you travel a lot, the Medicare Advantage plan may limit your access to health care while you travel, whereas a Medigap Plan will give you access to the entire US network of doctors that accept Medicare, and may even cover out of country costs. But if you don’t travel as much, and what you really need is drugs, dental coverage, and vision care, then a Medicare Advantage plan can be the way to go since Medigap does not cover these options.
How To Find the Best Medigap or Medicare Advantage Plan
When trying to find the best price for Medigap coverage or a Medicare Advantage plan, you may want to shop with independent brokers and non-captive agents. If you call an insurer directly, it will not be able to offer you more than one option for each plan because the insurance company can only speak for its own plans.
An independent broker or agent may represent a large number of companies, so they will be able to compare many options and give you advice. Agents and brokers are regulated by the government and by codes of ethics; They will not charge you fees. Instead, they are paid a commission by the insurance company they refer you to.
note
Get the advice of a licensed Medicare health insurance professional before making any final decisions. It won’t cost you a thing, and it may save you money in the long run.
The Bottom Line
Take some time to review your lifestyle and medical needs, including prescription drug costs, before making a decision on what kind of plan will work best in your situation. Consider the limits or consequences of switching plans if you become sick later in life. Switching from a Medigap plan to an Advantage Plan is always possible, but switching back may not be.