The core trade-off between Medicare Advantage and a Medicare Supplement (Medigap) plan is networks and cost structure. Medicare Advantage usually has a low or zero monthly premium and uses a provider network. You pay copays and coinsurance as you use care, up to the plan's annual out-of-pocket maximum, and drug coverage is usually bundled in. A Medigap plan has a monthly premium but lets you see any provider in the country that accepts Original Medicare, and it leaves you with very predictable, low out-of-pocket costs. With Medigap you add a separate Part D drug plan.
Neither path is automatically better. The right answer depends on how you use care, where you live and travel, what doctors and hospitals you want access to, and how you feel about monthly cost versus cost at the point of care.
Last updated: June 2026.
Key takeaways
- Medicare Advantage replaces Original Medicare with a private network-based plan, usually with a low monthly premium and copays as you use care.
- A Medicare Supplement (Medigap) plan works alongside Original Medicare, has a monthly premium, and leaves you with very predictable out-of-pocket costs at any provider that accepts Medicare.
- Most Medicare Advantage plans include drug coverage. With Medigap, you add a separate Part D drug plan.
- Medigap fits travelers and people who want broad provider choice. Medicare Advantage often fits people in one local area who want lower monthly cost and are comfortable with networks and copays.
- The easiest time to pick up a Medigap plan with no health questions is your one-time six-month Medigap open enrollment window.
In 2026, 55% of eligible Medicare beneficiaries are enrolled in Medicare Advantage, about 35 million people, up from 19% in 2007 (KFF, 2026).
About 43% of people in Original Medicare carry a Medigap policy, at an average premium near $2,600 per year (KFF, 2023).
Medicare Advantage vs Medicare Supplement at a glance
| Feature | Medicare Advantage | Medicare Supplement (Medigap) |
|---|---|---|
| Monthly premium | Typically low or $0 | A monthly premium |
| Provider access | Network, usually HMO or PPO | Any provider nationwide that accepts Original Medicare |
| Cost when you use care | Copays and coinsurance as you go | Very predictable, low |
| Annual out-of-pocket maximum | Yes, set by federal rules | No formal cap but very little cost-sharing in practice |
| Drug coverage | Usually bundled | Add a separate Part D plan |
| Referrals and prior authorization | Common | None from the plan |
| Extra benefits (dental, vision, hearing) | Often included | Generally not included |
| Best fit | One local area, lower monthly cost, comfortable with copays | Travelers, want predictable costs and broad provider choice |
How Original Medicare Works (and Where the Gaps Are)
Original Medicare is the federal program. Part A covers inpatient hospital, skilled nursing, hospice, and some home health care. Part B covers outpatient care, doctor visits, preventive services, lab work, and durable medical equipment. After you meet the Part B deductible, you generally pay a 20% coinsurance on most Part B services, and Original Medicare has no annual cap on what you can owe out of pocket. Both Medicare Advantage and Medigap plans exist to fill in those gaps, but they do it very differently.
We do not list current-year Part A or Part B premium and deductible dollar amounts here because they change every year. For current figures, see Medicare.gov. For a broader list of what Original Medicare does not cover, see our guide on what Medicare does not cover.
How a Medicare Supplement (Medigap) Plan Works
A Medigap plan works alongside Original Medicare. You keep Part A and Part B, and the Medigap plan pays some or all of the cost-sharing that Original Medicare leaves on you, depending on which lettered plan you choose. Medigap plans are federally standardized, so a given lettered plan (for example Plan G or Plan N) covers the same things regardless of which carrier sells it. Only the price and the company differ.
Key things to know about Medigap:
- No provider network. Any doctor or hospital in the country that accepts Original Medicare accepts your Medigap plan.
- No referrals and no prior authorization from the Medigap plan to see specialists or get covered services.
- Predictable out-of-pocket costs. With a comprehensive plan like Plan G, your routine cost-sharing is essentially the annual Part B deductible.
- You add a separate Part D plan for prescriptions.
- Most extras like routine dental, vision, hearing, and fitness benefits are not included.
For a side-by-side of the two most popular standardized plans, see Medigap Plan G vs Plan N.
How a Medicare Advantage Plan Works
A Medicare Advantage plan (also called Part C) is offered by a private insurance company that contracts with Medicare. Instead of paying providers through Original Medicare, you get your Part A and Part B benefits through the Advantage plan. Most Advantage plans also include Part D drug coverage and often add extras like routine dental, vision, hearing, and fitness benefits.
Key things to know about Medicare Advantage:
- Usually a low or zero monthly plan premium. You continue to pay your Part B premium.
- Provider networks. Most plans are HMO or PPO. HMO plans generally require in-network care except for emergencies. PPO plans allow out-of-network care at higher cost.
- Cost-sharing at the point of care, in the form of copays and coinsurance.
- An annual out-of-pocket maximum for in-network care, set by federal rules. Once you hit it, the plan pays 100% of covered in-network services for the rest of the year.
- Prior authorization is common for certain procedures, imaging, and post-acute services.
We do not name or recommend specific Advantage plans here. To shop plans available in your area, use the official Medicare Plan Finder.
Networks and Provider Access, Side by Side
This is usually the single biggest practical difference.
- Medigap: any provider in the country that accepts Original Medicare. No referrals, no plan-level prior authorization.
- Medicare Advantage: the plan's network and service area. Networks can change from year to year, and out-of-network care is typically more expensive or, on an HMO, generally not covered except for emergencies.
If you travel a lot, split time between states, or have a specific specialist or hospital you want to be able to reach, that points more naturally toward Medigap. If your doctors are in network and you live in one place most of the year, Advantage networks may work well for you.
Cost Structure, Side by Side
Think of Medigap as paying more up front, every month, in exchange for paying very little when you use care. Think of Medicare Advantage as paying less up front, every month, in exchange for paying more when you use care, up to the plan's annual out-of-pocket maximum.
- Medigap: monthly premium plus the Part B deductible, plus your separate Part D plan. Very few surprise bills.
- Medicare Advantage: usually a lower monthly cost, but copays and coinsurance add up over the year if you use a lot of care, capped by the annual out-of-pocket maximum.
We do not state specific premium amounts here. Premiums vary by carrier, plan, area, and the individual. Higher-income beneficiaries also pay IRMAA on top of Part B and Part D, which applies under both paths. See our IRMAA pillar for how that works.
Drug Coverage
Most Medicare Advantage plans bundle Part D drug coverage. With a Medigap plan, you enroll in a separate stand-alone Part D drug plan. Either way, your drug list and pharmacy network matter, so it is worth checking your specific medications against the plan's formulary before you enroll.
Switching Between Paths and Medical Underwriting
Going from Original Medicare with a Medigap plan into a Medicare Advantage plan is generally straightforward during the right enrollment window. Going from Medicare Advantage back into Medigap is the direction that requires more planning. Outside specific guaranteed-issue situations, Medigap carriers in most states can ask health questions, and your health at the time you apply can affect whether you are accepted and at what rate.
The cleanest time to lock in a Medigap plan is during your one-time six-month Medigap open enrollment window, which starts when you are both 65 or older and enrolled in Part B. During that window, Medigap carriers in your state must offer you a plan and cannot use your health to deny you or raise your rate. For the full set of enrollment windows and the rules for switching, see Medicare enrollment periods explained.
Who Each Path Tends to Fit
These are general patterns, not rules. The right answer always depends on your specific doctors, medications, and area.
Medigap tends to fit people who:
- Want predictable, low cost-sharing and are willing to pay a higher monthly premium for that.
- Travel often or live in more than one state.
- Want broad freedom to choose specialists and hospitals without network restrictions.
- Have, or expect to have, significant or complex healthcare needs.
Medicare Advantage tends to fit people who:
- Prefer a lower monthly cost and are comfortable with copays at the point of care.
- Live in one area most of the year and have providers in the local network.
- Value bundled extras like routine dental, vision, hearing, or fitness benefits.
- Are generally healthy and want a single, simple plan card.
What This Choice Does Not Decide
Picking Medigap or Medicare Advantage does not change Original Medicare itself. You still need to be enrolled in Part A and Part B, you still face the standard Medicare enrollment windows and the Part B late enrollment penalty if you delay enrollment without creditable coverage, and IRMAA still applies if your income is above the federal thresholds. For the rules on enrollment timing and penalties, see Medicare enrollment periods explained. For income-based premium adjustments, see Medicare IRMAA explained. For what Original Medicare leaves uncovered (and how people typically fill those gaps), see what Medicare does not cover. Local cost context for our area is in Medicare costs in Nebraska.
Frequently Asked Questions
What is the main difference between Medicare Advantage and a Medicare Supplement?
Medicare Advantage replaces Original Medicare with a private plan that usually has a low or zero premium, uses a provider network, and charges copays and coinsurance as you use care, up to an annual out-of-pocket maximum. A Medicare Supplement (Medigap) plan works alongside Original Medicare, has a monthly premium, lets you see any provider nationwide that accepts Medicare, and leaves you with very predictable, low out-of-pocket costs.
Does Medicare Advantage usually include drug coverage?
Most Medicare Advantage plans bundle Part D prescription drug coverage. With a Medigap plan, you add a separate stand-alone Part D drug plan.
Can I use my doctors anywhere with Medicare Advantage?
Medicare Advantage plans use provider networks, usually HMO or PPO. You generally pay less when you stay in network, and HMO plans typically require you to use in-network providers except for emergencies. A Medigap plan has no network: any provider in the country that accepts Original Medicare will accept your Medigap plan.
Is one option cheaper than the other?
It depends on how much care you use. Medicare Advantage usually has a lower monthly cost and higher costs when you use care, capped by the plan's annual out-of-pocket maximum. A Medigap plan has a higher monthly cost and very low costs when you use care. People who use more care often pay less in total with Medigap; very healthy years often look cheaper with Advantage.
Can I switch from Medicare Advantage to a Medigap plan later?
Usually yes, but outside specific guaranteed-issue windows, Medigap carriers in most states can ask health questions and may decline you or charge a higher rate. The easiest time to pick up a Medigap plan is during your one-time six-month Medigap open enrollment window.
Can I have both a Medigap plan and a Medicare Advantage plan?
No. Federal rules prohibit selling you a Medigap plan while you are enrolled in Medicare Advantage. You choose one path at a time.
Which option is better for someone who travels a lot?
Medigap tends to fit travelers and snowbirds well because it works with any provider nationwide that accepts Original Medicare. Most Medicare Advantage plans have local networks tied to a service area.
Does income affect what I pay?
Higher-income beneficiaries pay an extra amount called IRMAA on top of their Part B and Part D premiums, regardless of which path they choose. See our IRMAA pillar for the rules.
References
- Medicare.gov: Medicare costs at a glance
- Medicare.gov: How to compare Medigap policies
- Medicare.gov Plan Finder
We are not connected with or endorsed by the federal government or the Medicare program.
We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.
Want help comparing Medicare Advantage and Medigap for your specific doctors, medications, and area? I am a licensed independent agent based in Omaha. I can walk you through both paths side by side. Free consultation, no pressure.
Book a free Medicare consultation with Nick Depke or call (402) 680-6171.
Written by Nick Depke, licensed independent insurance agent (NPN 19158595), Depke Insurance Agency, 17310 Wright St Ste 100, Omaha, NE 68130.