Comparing Medicare Advantage Plans to Medicare Supplement Plans

Last Updated : 10/31/20194 min read

People might have a difficult time deciding whether to enroll in a Medicare Advantage plan (Medicare Part C) or a Medicare Supplement insurance plan (also known as Medigap).

With a Medicare Advantage plan, the beneficiary receives all of their services through the plan administered by a private insurance company contracted with Medicare rather than from the federal Medicare program.

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These plans must provide at least the same amount of coverage as Original Medicare, Part A and Part B, but some may have additional benefits.

With a Medicare Supplement insurance plan, Medicare benefits are provided by Original Medicare while the Medigap plan covers the beneficiary’s share of the out-of-pocket costs associated with Original Medicare benefits.

Both types of plans have their own specific advantages and disadvantages. It’s worth noting that you cannot enroll in both. Medicare Advantage plans do not work with Medicare Supplement insurance plans. This means that you cannot use your Medicare Supplement insurance plan to take care of the copayments, premiums, or deductible from your Medicare Advantage plan.

What are the benefits and disadvantages of Medicare Advantage?

The benefits of a Medicare Advantage plan may include the following, though may not always be the case as plan details and pricing can vary by provider.

  • Potentially low monthly premiums. According to eHealth, average monthly premium for a Medicare Advantage plan in 2019 was $8. This low number is in part due to the popularity of $0-dollar premium plans.
  • Drug coverage included with most Medicare Advantage plans, known as a Medicare Advantage Prescription Drug plan or MA-PD
  • Possible ancillary benefits, such as routine dental, routine vision, and health club membership
  • Managed care, such as supervision of doctors by the plan, possible case management, sometimes a 24-hour nurse hotline
  • Availability to all individuals entitled to Medicare Part A and enrolled in Medicare Part B who reside within the service area, without regard to age or health conditions, except for end-stage renal disease

Disadvantages include:

  • Cost sharing and copayment structure for services
  • Network restrictions
  • Possible geographic area restrictions and referral requirements

What are the benefits and disadvantages of Medicare Supplement?

The benefits of a Medicare Supplement insurance plan can be:

  • Freedom to see any provider that accepts Original Medicare, Part A and Part B
  • Minimal to no cost sharing for Medicare-covered services, depending on the plan
  • Freedom to use the plan nationwide (except for Medicare SELECT plans)
  • No medical underwriting if the plan is purchased during the Medigap Open Enrollment Period, which lasts six months beginning the month a beneficiary turns 65 and is enrolled in Medicare Part B

Disadvantages include:

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  • Potentially high monthly premiums. According to eHealth research, the average premium of a Medicare Supplement insurance plan was $152 in 2019.
  • Drug coverage not included but can be added separately through a Medicare Part D plan
  • Medical underwriting, except during the Medigap Open Enrollment Period, unless beneficiary qualifies for guaranteed issue rights due to special circumstances
  • Depending on the state, plan choices may be limited and more expensive for individuals under 65

Please note that these are general considerations, which can be affected significantly by various factors, including state laws and the availability and cost of plans in specific areas.

Annual Election Period Premium Comparison

Source: Medicare Index Report: Annual Enrollment Period for 2019 Coverage

MA = Medicare Advantage

MAPD = Medicare Advantage Prescription Drug Plan

PDP = Part D Prescription Drug Plan

Medigap = Medicare Supplement insurance plan

As you can see, there is much to consider when researching which type of Medicare plan may best suit your needs. Do you join a Medicare Advantage plan that may offer drug coverage so that all of your medical needs are covered under one plan? Or do you add a Medicare Supplement insurance policy to your Original Medicare, Part A and Part B, coverage? That answer probably depends a lot on your individual needs.

Begin by searching for plans in your service area by clicking the Compare Plans button on this page.

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