Medicare Supplement vs. Medicare Advantage Explained

Q: What’s the core difference between Medigap and Medicare Advantage?

Medigap supplements Original Medicare by paying some or all of Medicare’s cost-sharing while you keep Medicare as your primary coverage. Medicare Advantage replaces Original Medicare with a private plan that manages your Part A and Part B benefits (often including Part D) under its own network and rules.

Q: How do costs typically compare?

Medigap usually has higher monthly premiums but low costs when you receive care. Medicare Advantage often has lower premiums but adds copays and coinsurance as you use services and includes an annual out-of-pocket maximum.

Q: What about provider networks and referrals?

Medigap with Original Medicare allows visits to any provider nationwide who accepts Medicare, generally without referrals. Medicare Advantage plans use networks (HMO, PPO, etc.); out-of-network care may be limited or cost more, and HMOs often require referrals to see specialists.

Q: Is prescription drug coverage included?

Medigap does not include drug coverage; you add a separate Part D plan if needed. Many Medicare Advantage plans include prescription drug coverage (MAPD), subject to each plan’s formulary and pharmacy network.

Q: Do Medicare Advantage plans have an annual out-of-pocket maximum?

Yes. Medicare Advantage plans set a yearly cap for Part A and Part B costs; after you reach it, covered services are typically paid at 100% for the rest of the year. Original Medicare has no such cap; Medigap limits your exposure by paying Medicare cost-sharing.

Q: How do benefits like dental, vision, hearing, and extras compare?

Many Medicare Advantage plans include extras such as limited dental, vision, hearing, fitness, or OTC allowances. Medigap policies generally do not include these benefits; separate stand-alone coverage can be purchased if desired.

Q: What about prior authorization and plan rules?

Medicare Advantage commonly requires prior authorization and other plan rules for certain services. Medigap with Original Medicare typically follows Medicare coverage rules without the same level of prior authorization.

Q: How do travel and snowbird situations work?

Medigap with Original Medicare generally provides nationwide access to any Medicare-accepting provider. Medicare Advantage plans may limit routine care to local networks; emergency and urgent care are typically covered while traveling, but non-emergency out-of-area services can be restricted.

Q: Is health underwriting involved?

Medicare Advantage does not use health underwriting for enrollment periods. Medigap has guaranteed-issue rights during the initial Medigap Open Enrollment or specific special rights; outside those, carriers in many states may require medical underwriting to add or switch Medigap.

Q: Can I switch later if I change my mind?

You can switch during Medicare enrollment windows, but moving from Medicare Advantage to Medigap later may require medical underwriting unless you qualify for a guaranteed-issue right in your state.

Medicare Supplement vs. Medicare Advantage

At Diversified Insurance Brokers, we help seniors compare Medicare Supplement and Medicare Advantage plans to find the best fit for their needs. With access to more than 100 top-rated carriers and years of experience guiding retirees through the complexities of Medicare, our advisors are equipped to help you make a confident, informed decision. Whether you’re evaluating costs, coverage, or long-term flexibility, our team can guide you every step of the way. Get a personalized quote today and discover which Medicare plan is right for you.

What’s the Difference Between Medicare Supplement and Medicare Advantage?

Medicare Supplement (also known as Medigap) policies are designed to work alongside Original Medicare. These plans help cover out-of-pocket expenses like deductibles, coinsurance, and copayments. Medicare Advantage (Part C), on the other hand, is a private alternative to Original Medicare. Advantage plans often bundle hospital, medical, and prescription coverage into one, and may include extra benefits like dental or vision.

Here’s a quick breakdown:

Medicare Supplement: Higher monthly premiums, but minimal out-of-pocket costs and freedom to see any provider that accepts Medicare nationwide.
Medicare Advantage: Lower premiums, but restricted provider networks and potentially higher out-of-pocket costs when care is needed.

Who Should Choose a Medicare Supplement Plan?

A Medicare Supplement policy is often a better choice if you:

Travel frequently or live in multiple states throughout the year
Want the freedom to choose any Medicare provider without referrals
Prefer more predictable out-of-pocket costs
Don’t mind paying a higher premium for better flexibility

When Is Medicare Advantage a Good Fit?

A Medicare Advantage plan may be a smart option if you:

Prefer lower premiums and are comfortable using a provider network
Want extra perks like dental, vision, hearing, or gym memberships
Are generally healthy and don’t anticipate frequent medical visits

Each plan type has its own strengths, and the best choice depends on your lifestyle, medical needs, and financial goals. At Diversified Insurance Brokers, we’ll walk you through both options, show you real numbers, and help you feel confident about your Medicare decision.

FAQs: Medicare Supplement (Medigap) vs Medicare Advantage (Part C)

What’s the core difference between Medigap and Medicare Advantage?

Medigap supplements Original Medicare (Parts A & B) by helping pay its out-of-pocket costs; you keep Medicare as your primary insurance. Medicare Advantage (Part C) replaces your Original Medicare coverage with a private plan that bundles hospital, medical, and often drug coverage, using the plan’s network and rules.

How do costs typically compare?

Medigap usually has a higher monthly premium but very low costs when you get care (and no annual out-of-pocket max on Original Medicare). Medicare Advantage often has a lower premium (sometimes $0) but adds copays/coinsurance as you use services and includes an annual out-of-pocket maximum.

What about provider networks and referrals?

With Medigap + Original Medicare, you can see any provider nationwide who accepts Medicare—no referrals required. Medicare Advantage plans use networks (HMO/PPO, etc.); out-of-network care may cost more or not be covered, and HMOs often require referrals for specialists.

Is prescription drug coverage included?

Medigap does not include Part D—you add a separate drug plan if you want prescription coverage. Many Medicare Advantage plans include drug coverage (MAPD); always confirm the formulary and pharmacy network.

Do Medicare Advantage plans have an annual out-of-pocket maximum?

Yes. Each MA plan sets a yearly cap for in-network Part A/B costs. Once you hit it, covered services are typically paid at 100% for the rest of the year. Original Medicare has no such cap; Medigap controls costs by paying most or all of your Medicare cost-sharing.

How do benefits like dental, vision, hearing, and extras compare?

Many Medicare Advantage plans include extra perks (limited dental, vision, hearing, fitness, OTC). Medigap policies generally do not include extras; you can buy stand-alone dental/vision if desired.

What about prior authorization and plan rules?

Medicare Advantage frequently uses prior authorization and utilization management for certain services. With Medigap + Original Medicare, you follow Medicare’s rules; prior authorization is less common, and coverage decisions are based on Medicare’s national and local policies.

How do travel and snowbird situations work?

Medigap + Original Medicare travels well—any Medicare-accepting provider nationwide is usually covered. Medicare Advantage may limit routine care to local networks; emergency/urgent care is generally covered while traveling, but non-emergency out-of-area care may be restricted.

Is health underwriting involved?

Medicare Advantage has no health underwriting (except end-stage renal disease rules that have largely eased). Medigap has guaranteed-issue during your first Medigap Open Enrollment (and certain special rights). Outside those windows, some states/carriers require medical underwriting to switch or add Medigap.

Can I switch later if I change my mind?

You can switch MA plans or between MA and Original Medicare during set enrollment windows. Moving from MA to Medigap later may require underwriting (and you may be declined or rated) unless you have a guaranteed-issue right in your state.

Who tends to prefer Medigap vs Medicare Advantage?

Medigap often suits people who value broad provider access, travel frequently, or want minimal bills at the point of care. Medicare Advantage often suits people who prioritize lower premiums and bundled extras and who are comfortable with networks and plan rules.

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About the Author:

Tonia Pettitt, CMIP©, is a seasoned Medicare specialist with more than 40 years of hands-on experience guiding individuals and families through the complexities of Medicare planning. As a senior advisor with the nationally licensed independent agency Diversified Insurance Brokers, Tonia provides clear, dependable guidance across all areas of Medicare—including Medicare Advantage, Medicare Supplement (Medigap), and Part D prescription coverage. Leveraging active contracts with dozens of highly rated insurance carriers, she helps clients compare options objectively and secure the most suitable coverage for their health and budget.

Known for her patient, education-first approach, Tonia has built a reputation as a trusted resource for retirees seeking reliable, unbiased Medicare support. With four decades of experience across evolving Medicare laws, carrier changes, and plan structures, she brings unmatched insight to every client conversation—ensuring clients feel confident, protected, and fully prepared for each stage of their retirement healthcare journey.