At 65, your mailbox fills with Medicare Advantage brochures promising low or $0 premiums, dental and vision benefits, and gym memberships. A friend tells you to get a Medigap plan instead. These are two fundamentally different ways to receive Medicare benefits, and the choice affects your access to doctors, your costs, and your options for years to come.
Key Takeaways
- Original Medicare lets you see any doctor or hospital that accepts Medicare nationwide, but has no annual out-of-pocket cap; Medigap policies fill most of those gaps.
- Medicare Advantage plans often have lower premiums and extra benefits, but use networks and prior authorization and have annual out-of-pocket limits.
- Your Medigap open enrollment period — six months starting when you are 65 or older and enrolled in Part B — is when you can buy any Medigap policy without medical underwriting.
- In most states, switching from Medicare Advantage to Medigap later can mean medical underwriting, which may result in higher premiums or denial.
Compare current plans in your area at medicare.gov or with a State Health Insurance Assistance Program (SHIP) counselor.
Option 1: Original Medicare plus Medigap
Original Medicare includes Part A (hospital) and Part B (medical). You can see any doctor or hospital in the US that accepts Medicare. Referrals are generally not needed.
But Original Medicare has cost-sharing:
- A Part A deductible per benefit period
- A Part B annual deductible
- Generally 20% coinsurance for most Part B services
- No annual out-of-pocket maximum
Medigap (Medicare Supplement Insurance) policies, sold by private insurers, cover some or all of these costs. Plans are standardised by letter (such as Plan G or Plan N), so benefits are the same across insurers for the same letter, though premiums differ.
You usually add a separate Part D prescription drug plan.
Advantages: broad access to providers, predictable costs, few prior authorization requirements.
Disadvantages: higher monthly premiums, separate drug plan, generally no dental, vision or hearing coverage.
Option 2: Medicare Advantage
Medicare Advantage (Part C) plans are offered by private insurers approved by Medicare. They provide Part A and B benefits and usually include drug coverage.
Features:
- Networks: HMOs generally require you to use network providers; PPOs allow out-of-network care at higher cost.
- Prior authorization: plans may require approval for certain services.
- Annual out-of-pocket maximum: plans must cap your in-network spending on covered Part A and B services each year.
- Extra benefits: many plans include some dental, vision, hearing and fitness benefits.
- Premiums: often low, sometimes $0, though you still pay the Part B premium.
Advantages: lower premiums, out-of-pocket cap, extra benefits, all-in-one coverage.
Disadvantages: network restrictions, prior authorization, costs that vary with use, plans that can change benefits and networks each year.
The underwriting trap
When you first enroll in Part B at 65 or older, you get a six-month Medigap open enrollment period. During this window, insurers must sell you any Medigap policy they offer, without considering your health.
After that window, in most states, insurers can use medical underwriting: they may charge more or refuse coverage based on health conditions. Some states have additional protections allowing switches at other times.
This means choosing Medicare Advantage at 65 and trying to switch to Medigap later — after developing a health condition — may not be possible on favourable terms. Federal rules provide some guaranteed issue rights in specific situations, such as a “trial right” if you joined Medicare Advantage when first eligible and leave within the first year.
Which might fit you?
Original Medicare plus Medigap may suit you if:
- You want freedom to see any provider that accepts Medicare
- You travel within the US or live in more than one state
- You prefer predictable costs and can afford higher premiums
- You have chronic conditions or expect significant medical care
Medicare Advantage may suit you if:
- You are comfortable with a network
- Your preferred doctors and hospitals are in the plan’s network
- You want lower premiums and extra benefits
- You are comfortable with variable costs up to the out-of-pocket maximum
Questions to ask before choosing
- Are my doctors, specialists and hospitals covered?
- Are my prescriptions on the plan’s formulary, and at what cost?
- What is the annual out-of-pocket maximum?
- What services need prior authorization?
- How does coverage work when I travel?
- If I choose Medicare Advantage, could I buy Medigap later in my state?
Frequently Asked Questions
Can I have both Medicare Advantage and Medigap? No. Medigap policies cannot be used with Medicare Advantage.
Can I switch plans every year? During Medicare’s annual Open Enrollment Period (October 15 to December 7), you can switch between Original Medicare and Medicare Advantage and change drug plans. Medigap switches may involve underwriting.
Does Medigap cover prescriptions? Current Medigap policies do not include drug coverage. You need a separate Part D plan.
Who can help me compare? State Health Insurance Assistance Programs offer free, unbiased counselling.
The bottom line
Medigap buys predictability and freedom of choice at a higher premium; Medicare Advantage offers lower premiums with networks and rules. Decide carefully at 65, because your Medigap open enrollment window does not come back.
