What’s the Difference Between Medicare Advantage and Medigap?
Medicare Advantage and Medigap are both health insurance plans that can help Medicare beneficiaries get the unique benefits and financial assistance they need — but they have some key differences. Medicare Advantage can be purchased separately in lieu of the benefits of Original Medicare, while Medigap helps supplement Original Medicare costs. You cannot hold a Medicare Advantage and Medigap plan at the same time.
Highlights of Medicare Advantage:
- Must be purchased through private Medicare-approved insurers
- May offer additional benefits like vision, hearing, and dental
- Prescription drug (Part D) coverage is included in most plans
Highlights of Medigap:
- Must be purchased separately through Medicare
- Offers supplemental financial assistance, not medical coverage
- Helps beneficiaries pay for premiums, coinsurance, copays, and other out-of-pocket costs
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The Advantages of Medicare Advantage Over Medigap
Medicare Advantage provides features beyond what Original Medicare can offer, ideal for beneficiaries seeking extended benefits who do not need financial assistance through Medigap.
Medicare Advantage plans must, by law, offer all of the same benefits as Original Medicare (Part A and Part B), plus they typically offer additional benefits such as dental, vision, and hearing services, wellness programs, and fitness membership options. These special features are not included in Original Medicare or Medigap plans.
Medicare Advantage plans also typically include Part D drug coverage, which saves beneficiaries the hassle of enrolling in a separate prescription drug plan like with Medigap. Some Medicare Advantage plans may also cover medically necessary transportation and offer perks like payment assistance for utility bills or buying healthy foods under wellness programs.
Lower Out-of-Pocket Costs
Even though Medicare Advantage plans must be purchased separately from a private insurer, they still often require lower monthly premiums than Medigap. Some Medicare Advantage plans offer $0 monthly premiums, though usually you still have to keep paying your Medicare Part B premium to maintain coverage.
Additionally, Medicare Advantage plans usually include out-of-pocket maximums, which can limit your annual healthcare expenses. Once you reach your limit for out-of-pocket expenses such as copays and coinsurance, you do not need to pay for Part A or Part B services for the rest of the year.
Most Medicare Advantage plans include prescription drug coverage, which is not included and must be purchased separately for Original Medicare or Medigap plans. Medicare Advantage Part D coverage proves both convenient and cost-effective, with medical and prescription drug coverage bundled into one plan.
Aside from the savings, automatic enrollment in a drug plan through Medicare Advantage is simple and easy, compared to purchasing a standalone prescription drug plan with Original Medicare. Options are limited, and Medicare charges a penalty for Medigap beneficiaries who miss the window to purchase Part D coverage.
Medicare Advantage plans combine various Medicare benefits into a single plan, making it easier to manage your healthcare coverage. Medicare Advantage includes basic hospital and medical care through Parts A and B, as well as additional benefits such as dental, vision, hearing, and prescription drug services, all under one policy.
By contrast, purchasing a Medigap plan to supplement Original Medicare may help with the out-of-pocket costs, but you would still need to purchase piecemeal plans for each benefit. Unlike Medigap, Medicare Advantage enables you to work with one point of contact for any questions and concerns regarding your policy.
Most Medicare Advantage plans, in addition to Original Medicare, provide access to telehealth services, allowing you to consult with healthcare professionals remotely through audio or video calls. Many Medicare beneficiaries may prefer the convenience of scheduling routine check-ups, follow-up visits, and non-emergency medical consultations from the comfort of their own home.
Telehealth services may be especially beneficial if your in-network care options are limited. Most Medicare Advantage plans include their own networks of doctors and hospitals, which can range in size and availability depending on your location. For example, members of a Medicare Advantage plan in a rural area might be able to access a broader network through telehealth.
Does Medigap Have Benefits Over Medicare Advantage?
Medigap not only helps people on Medicare pay their share of medical expenses but may offer more freedom to choose providers and access coverage than a Medicare Advantage plan.
Freedom To Choose Providers
Unlike the network limitations of Medicare Advantage, Medigap plans allow you to see any healthcare provider that accepts Medicare. This important feature benefits people on Medicare who want the freedom to choose their own provider from anywhere in the United States.
Medigap policyholders also enjoy the ability to visit any doctor or specialist without needing a referral from the primary care physician, which is often required of Medicare Advantage plans. Medicare beneficiaries who require frequent appointments with specialists or may seek a new doctor in the future may especially appreciate the convenience of Medigap coverage.
Though plans vary, some Medigap plans provide coverage for emergency medical care while traveling outside of the United States. For those who frequently travel internationally or spend extended periods abroad, Medigap plans can offer peace of mind for unforeseen medical emergencies.
On the contrary, most Medicare Advantage plans typically do not provide coverage for medical services received outside the U.S., though some additional plans offer it for a fee. Medigap policyholders and seasoned travelers may enjoy the convenience and savings of international medical benefits already bundled into their plan.
No Prior Authorization
Medigap plans do not require prior authorization for medical services. You may pursue a treatment or procedure — as long as it is deemed medically necessary by your doctor — without being required to get approval from Medicare beforehand.
Medicare Advantage plans, by contrast, often require prior authorization for certain services, which can delay or restrict access to much-needed care.