Medicare Advantage vs. Medigap: What's the Difference?
If Medicare won’t cover all your healthcare needs, Medicare Advantage and Medigap can help. Both Medicare Advantage and Medigap supplement original Medicare to provide more coverage, but there are some important differences between the two.
What is Medicare Advantage?
Medicare Advantage is private health insurance through Medicare that often also includes prescription drug coverage, or Medicare Part D. The plans usually provide coverage for things like vision, dental, disability services, home health, and other health care needs not covered by original Medicare.
“Medicare Advantage plans offer the convenience of providing all of these services in one plan,” Erin Nance, MD, a New York City-based orthopedic surgeon, tells WebMD Connect to Care. “The costs and coverage details vary depending on the specific insurance company and what state you live in.”
Medicare Advantage plans can be HMOs, PPOs, Special Needs Plans (SNPs), private fee-for-service (PFFS) plans, or Medical Savings Account (MSA) plans.
While Medicare Advantage patients don’t need referrals to see a specialist, there are some limits when it comes to providers.
“There are different types of Medicare Advantage Plans that may limit your ability to see a certain provider,” Nance says. “The vast majority of doctors accept Original Medicare and the Medigap supplemental insurance.”
What is Medigap?
Medigap, also known as Medicare Supplement Insurance, adds to original Medicare by filling in gaps where you aren’t covered. Medigap plans usually don’t cover vision, hearing, long-term care or at-home care. However, they're useful for specific types of coverage, such as health insurance while traveling or frequent emergency care.
For instance, under Medigap plan N, foreign emergencies and hospital visits are covered, while emergency visits cost $50. Medigap plan F, a more expensive plan, pays for Part B deductibles while covering the 20% cost of services Medicare doesn’t pay.
Medigap plans do not provide prescription drug coverage, and Medigap cannot be combined with Medicare Advantage. But Medigap plans are a way to tweak your Medicare to your specific situation while covering larger expenses.
Which one is better?
Both Medicare Advantage and Medigap provide advantages and disadvantages.
Some advantages of Medicare Advantage include:
- More coverage and benefits, which can include services like gym memberships, long-term care, and disability equipment
- Lower premiums
- An all-in-one plan which covers Medicare Part A, B, and D
Some disadvantages of Medicare Advantage include:
- Having to make sure your preferred provider is in your plan
- No coverage while traveling
- A likelihood of higher out-of-pocket and emergency costs
Some advantages of Medigap plans include:
- Fewer out-of-pocket expenses
- Access to all providers who accept Medicare
- Coverage while traveling overseas
Some disadvantages of Medigap plans include:
- Higher monthly premiums
- Having to navigate the different types of plans
- No prescription coverage (which you can purchase through Plan D)
How do you decide?
“Make sure you have enough coverage to limit your financial liability in case of catastrophic injuries or disease,” Nance says. “While the plans that have better benefits often cost more, they will usually save you in the long run in terms of out-of-pocket fees.” Nance further recommends speaking to family and friends to compare experiences.