Medigap vs. Medicare Advantage: Making the Right Choice for Your Coverage

Making Your Medigap Choice Simple

Choosing a Medicare Supplement (Medigap) plan can feel overwhelming, but it doesn’t have to be. These plans help cover costs that Original Medicare doesn’t, like deductibles and coinsurance. Understanding a few key principles will simplify your decision and give you peace of mind.

The most important time to act is during your 6-month Medigap Open Enrollment Period, which starts when you’re 65 or older and enrolled in Medicare Part B. During this window, you have a guaranteed right to buy any Medigap policy sold in your state, regardless of your health.

Medigap plans are standardized by letters (e.g., Plan G, Plan N), meaning a Plan G from one company has the same core benefits as a Plan G from another. This makes it easy to compare: once you’ve chosen a plan letter that fits your needs, your main focus should be on finding the best price from a reputable insurer.

At ShieldWise, we provide clear, unbiased guidance to help you steer your options and make an informed decision without any sales pressure.

Original Medicare (Parts A and B) is the foundation of your coverage, but it does not pay for everything. You are still responsible for hospital and medical deductibles, daily hospital coinsurance if you have a long stay, 20% coinsurance for most outpatient care, and there is no annual out-of-pocket maximum. Those “gaps” can add up quickly, especially if you face an unexpected illness or need frequent doctor visits.

A Medicare Supplement plan is designed specifically to help with these gaps. Instead of worrying about every bill that arrives, you can choose a Medigap plan that fits your budget and risk tolerance. Some people are comfortable taking on more out-of-pocket costs in exchange for a lower premium, while others prefer to pay a bit more each month so they can predict their costs and avoid surprises.

When thinking about how to choose a Medicare supplement plan, it helps to start with a few simple questions:

• How often do you see doctors or specialists now?
• Do you travel frequently or spend time in more than one state during the year?
• Would you rather pay higher premiums for fewer surprise bills, or lower premiums knowing you may pay more when you get care?
• Do you want completely free choice of doctors who accept Medicare, or are you comfortable working within a network?

Keeping these questions in mind as you learn the basics in the sections below will make your final decision much easier and more confident.

Understanding Your Primary Coverage Options: Medigap vs. Medicare Advantage

When you become eligible for Medicare, you face a fundamental choice: stick with Original Medicare (Parts A and B) and add a Medicare Supplement (Medigap) plan, or opt for a Medicare Advantage (Part C) plan. This decision shapes your healthcare coverage and out-of-pocket costs.

Original Medicare provides broad access to doctors and hospitals nationwide, but it has cost-sharing like deductibles and coinsurance. A Medigap policy works alongside Original Medicare to help pay for these “gaps.” In contrast, a Medicare Advantage plan is an all-in-one alternative offered by private insurers that bundles Part A, Part B, and often Part D (prescription drugs) into one plan, usually with network restrictions.

Here’s a breakdown of the key differences:

Feature	Original Medicare + Medigap	Medicare Advantage (Part C)
Doctor & Hospital Choice	You can see any doctor or use any hospital in the U.S. that accepts Medicare. No referrals are needed for specialists.	You generally must use doctors, hospitals, and specialists within the plan’s network and service area. You may need referrals.
Costs	You pay a monthly premium for Part B and a separate premium for your Medigap plan. Once deductibles are met, many plans cover most or all of your remaining costs.	You pay your Part B premium plus a plan premium (some plans have a $0 premium). You’ll have copayments and coinsurance for services. There is an annual out-of-pocket maximum.
Coverage	Covers services and supplies deemed medically necessary by Medicare. Medigap fills the cost gaps. Does not include routine dental, vision, or hearing.	Must cover everything Original Medicare covers. Many plans also include extra benefits like dental, vision, hearing, and gym memberships.
Prescription Drugs	You need to enroll in a separate Medicare Part D plan for prescription drug coverage.	Most plans include prescription drug coverage (MA-PD).
Foreign Travel	Original Medicare offers very limited foreign travel coverage. Many Medigap plans provide coverage for medical emergencies abroad.	Coverage outside the U.S. is typically limited to emergencies, though some plans offer more comprehensive travel benefits.

For a more detailed comparison, you can visit the official government site to Compare Original Medicare & Medicare Advantage.

If you like the idea of nationwide access to providers who accept Medicare, predictable cost-sharing, and the freedom to see specialists without referrals, staying with Original Medicare and adding a Medigap plan may be a better fit. If you prefer one ID card, extra benefits such as dental or vision, and are comfortable following a provider network and prior-authorization rules, a Medicare Advantage plan may appeal to you.

Many people in Illinois and across the country choose Medigap specifically because they want stable, predictable coverage year after year, regardless of changes in networks.

What is a Medicare Supplement (Medigap) Policy?

A Medicare Supplement (Medigap) policy is sold by private insurance companies to help pay some of the healthcare costs that Original Medicare does not cover, such as copayments, coinsurance, and deductibles.

Key points about Medigap policies:

• They supplement Original Medicare. Medicare pays first, then your Medigap plan pays its share.
• They are standardized in most states by plan letter (A–N). A Plan G from one company must offer the same basic benefits as a Plan G from another company.
• You must have Medicare Part A and Part B to buy a Medigap policy.
• You pay a monthly premium for your Medigap policy in addition to your Part B premium.
• Medigap plans sold today generally do not include prescription drug coverage, so you may also need a separate Part D plan.
• A Medigap policy is not a Medicare Advantage Plan. It does not replace Medicare; it works with it.

Because benefits are standardized, one of the most important parts of how to choose a Medicare supplement plan is comparing prices and company track records rather than being distracted by complex benefit descriptions.

For more detail, visit More info about Medicare Supplement and Medigap.

How is Medigap Different from Medicare Advantage?

Although both Medigap and Medicare Advantage plans are offered by private insurance companies, they work very differently:

• How they coordinate with Medicare

  • Medigap: Works with Original Medicare. You keep your red, white, and blue Medicare card and show your Medigap card when you receive care.
  • Medicare Advantage: Replaces Original Medicare for most of your coverage. You use your plan’s card instead of your Medicare card for services.

• Provider choice and networks

  • Medigap: You can see any doctor or hospital in the U.S. that accepts Medicare patients, with no network restrictions.
  • Medicare Advantage: You typically must stay within a local or regional network of providers, except for emergencies and urgent care.

• Prescription drugs and extra benefits

  • Medigap: Does not include prescription drug coverage; you usually add a separate Part D plan. It also does not cover routine dental, vision, or hearing services.
  • Medicare Advantage: Often bundles medical, prescription drugs, and sometimes extras like limited dental, vision, or hearing benefits into one plan.

• How you pay for care

  • Medigap: You generally pay higher monthly premiums but have very low or even no bills when you actually receive covered care, depending on the plan you choose.
  • Medicare Advantage: Premiums can be lower (sometimes $0 beyond Part B), but you pay copays and coinsurance as you use services, up to an annual out-of-pocket maximum.

Understanding these differences is central to deciding how to choose a Medicare supplement plan. If avoiding surprise medical bills and having maximum provider choice are your top priorities, Medigap is usually the stronger option.

For a broader overview of your choices, see the Guide to Understanding Medicare Coverage Options.

You don’t have to make this decision alone. ShieldWise™ can help you compare Medigap and Medicare Advantage options from trusted carriers side by side so you can see how each choice would affect your budget and access to care.

How to Choose a Medicare Supplement Plan: A Deep Dive into Medigap

Once you’ve decided to stick with Original Medicare, the next step is choosing a Medigap plan to manage your out-of-pocket costs. In most states, Medigap plans are standardized and identified by letters A, B, C, D, F, G, K, L, M, and N. This standardization means that a Plan G from one insurance company offers the exact same medical benefits as a Plan G from another. The primary difference between them is the price.

(Example benefits chart from Medicare.gov. Always refer to the most current chart for details.)

Medigap plans are sold by private insurance companies, including many of the same carriers you may know from individual or employer health insurance. However, unlike many under‑65 plans, the benefits for each lettered Medigap plan are set by federal rules. That means you can focus on which letter best matches your needs, then compare companies for cost and service.

Comparing Popular Medigap Plans

While there are several options, most new Medicare beneficiaries focus on a few key plans:

• Plan G: This is the most comprehensive option for new enrollees. It covers nearly all of your out-of-pocket costs, including hospital deductibles and coinsurance. The only major cost it doesn’t cover is the annual Medicare Part B deductible. Once you’ve paid that deductible, Plan G covers 100% of your Medicare-approved costs for the rest of the year. It also covers Part B “excess charges,” which are rare additional fees some doctors may charge.

• Plan N: This plan offers a good balance of coverage and lower premiums. Like Plan G, it covers most costs after you’ve met your Part B deductible. However, to keep premiums lower, you’ll pay small copayments for some doctor’s office visits (up to $20) and emergency room visits (up to $50, waived if you’re admitted). Plan N does not cover Part B excess charges. It’s a great option if you are generally healthy and want to save on monthly costs.

• Plan F: For many years, Plan F was the most popular plan because it covered everything, including the Part B deductible. However, a federal law change means Plan F is only available to individuals who were eligible for Medicare before January 1, 2020. If you are eligible, you can still buy it, but Plan G often provides better value as Plan F premiums can be significantly higher than the cost of the Part B deductible it covers.

Beyond these, some people consider high-deductible versions of Plan G (and, if eligible, Plan F). These options require you to pay a higher deductible each year before the plan begins paying most benefits, in exchange for a significantly lower monthly premium. High-deductible plans can make sense if you are comfortable budgeting for potential out-of-pocket costs and want to minimize ongoing premiums.

When choosing, consider your health needs and budget. If you prefer predictable costs and comprehensive coverage, Plan G is an excellent choice. If you’re comfortable with small, occasional copayments in exchange for a lower monthly premium, Plan N could be a better fit.

How to choose a Medicare Supplement Plan by comparing benefits (Plans A–N)

To narrow down your choices, it helps to understand what each lettered plan generally covers:

• Plan A

  • Offers the most basic set of benefits.
  • Covers your Part A hospital coinsurance and an extra 365 days of hospital coverage after Medicare benefits are used up.
  • Covers Part B coinsurance or copayments and some blood and hospice coinsurance.
  • Premiums are often lower, but you will have more out-of-pocket costs if you need care.

• Plan G

  • Considered the most comprehensive plan available to people new to Medicare.
  • Covers:
    • Part A deductible and coinsurance
    • Skilled nursing facility coinsurance
    • Part B coinsurance or copayments
    • Part B excess charges
    • First three pints of blood
    • Hospice care coinsurance or copayments
    • Foreign travel emergency care (up to plan limits)
  • You are responsible only for the annual Part B deductible and your monthly premiums.

• Plan N

  • Covers most of what Plan G does, including:
    • Part A deductible and coinsurance
    • Skilled nursing facility coinsurance
    • Part B coinsurance (with some copayments)
    • First three pints of blood
    • Hospice coinsurance or copayments
    • Foreign travel emergency care (up to plan limits)
  • You pay:
    • The Part B deductible
    • Up to $20 copay for some office visits
    • Up to $50 copay for emergency room visits (waived if admitted)
  • Does not cover Part B excess charges, so if you see providers who bill above the Medicare-approved amount in states where this is allowed, you could owe extra.

• Plan F (for those first eligible for Medicare before 2020)

  • Covers everything that Plan G covers plus the Part B deductible.
  • Because it pays that small deductible, premiums are often higher than the combined cost of a Plan G premium and the deductible itself.

Other plans (such as K, L, and M) use a cost‑sharing model where the plan pays a percentage of certain costs and you pay the rest, often with an annual out-of-pocket limit. These may be options if you want a lower premium and are comfortable with paying a share of costs when you receive services.

You can view a current, official chart of benefits for all standardized plans at Compare Medigap Plan Benefits and in Medicare’s Choosing a Medigap Policy booklet.

How to choose a Medicare Supplement Plan by understanding costs

Benefits are only half the story. When learning how to choose a Medicare supplement plan, it is just as important to understand how premiums are set and what might make your costs change over time.

Monthly premiums and rating methods

Insurance companies use different methods to set Medigap premiums:

• Community-rated (no-age-rated)

  • Everyone pays the same premium, regardless of age.
  • Premiums may increase over time due to inflation or overall claims, but not simply because you get older.

• Issue-age-rated (entry-age-rated)

  • Premium is based on your age when you first buy the policy.
  • People who buy at a younger age typically pay less.
  • Premiums may go up due to inflation or other factors, but not because you age.

• Attained-age-rated

  • Premium is based on your current age and increases as you get older.
  • Often starts out lower than other types, but can become more expensive in later years.

When comparing plans, ask each company which rating method they use. A slightly higher starting premium with a community- or issue-age-rated plan may save you money in the long run compared with an attained-age-rated plan that increases sharply over time.

Factors that influence your cost

In addition to the rating method, companies may adjust premiums based on:

• Age at the time you enroll
• Location, such as your state or ZIP code
• Tobacco use, with higher rates for people who smoke
• Gender, in some states
• Household discounts if more than one person in your household enrolls with the same company

Illinois and other states may have their own rules that affect Medigap pricing and availability, so it is important to look at options specific to your area.

Balancing premiums and protection

To find the right fit:

1. Decide how much risk you are willing to take on.

   • If you want to avoid most surprise medical bills, a more comprehensive plan like Plan G may be worth the higher premium.
   • If you can comfortably handle some copays and potential excess charges, Plan N or a cost‑sharing plan might be suitable.

2. Compare total annual costs, not just monthly premiums.

   • Add together: your Part B premium, your Medigap premium, and expected out-of-pocket expenses such as the Part B deductible and any copays.

3. Consider future affordability.

   • Ask each insurer about its history of rate increases for the plan you are considering.
   • Think about how the premium might fit into your budget five or ten years from now.

For a deeper look at how these costs work together, see the More info about Medicare Out-of-Pocket Costs Guide.

ShieldWise™ can help you compare Medigap quotes from multiple carriers side by side so you can quickly see how different plans, rating methods, and discounts affect your bottom line.