Medicare Advantage and Medigap: What’s the Difference?

The majority of Medicare beneficiaries sign up for plans with additional benefits. Should you—and which kind?

When you enroll in Medicare, you have an important decision to make: Should you get a plan that provides additional benefits?

Most people do, because the out-of-pocket health care costs associated with Original Medicare (Parts A and B) can be very high. Some people have coverage provided by an employer, such as retiree insurance. But more than half of Medicare beneficiaries choose either a Medicare Advantage plan (Part C) or Medicare Supplement insurance plan (Medigap), according to the Kaiser Family Foundation.

Here’s a look at the key features of Medicare Advantage and Medigap plans — and how to decide if either is right for you.

Stay active, have fun, get fit — with SilverSneakers! Classes and events are happening right now at participating gyms, online through SilverSneakers LIVE, and at community centers near you. Activate your free online account to get started.

Medicare Advantage (Part C)

Medicare Advantage (Part C) is a managed care plan, such as a health maintenance organization (HMO) or preferred provider organization (PPO), offered by a private insurance company.

The coverage provided by Medicare Advantage plans can be much more comprehensive than what you’d get from Original Medicare or Medigap. You’ll still receive your Original Medicare benefits—hospital care (Part A) and medical care (Part B).

In addition, most will bundle in Part D prescription drug benefits, if you choose them. And many include vision, dental, hearing care, and fitness benefits like SilverSneakers. Find a Medicare Advantage plan that includes SilverSneakers here.

Potential upsides: Medicare Advantage plans are an affordable, attractive option for many people, says David Armes, principal of Dover Healthcare Planning LLC, a fee-only Medicare advisor in Long Beach, California.

About half of all Medicare Advantage enrollees pay no monthly payment beyond their Part B premium. In 2023, those will start at $174.70.

Medicare Advantage plans also help contain out-of-pocket costs because they have yearly limits on covered hospital and medical services. These limits vary among plans. Original Medicare has no out-of-pocket maximums, unless you have supplemental coverage (like Medigap).

Potential drawbacks: If your Medicare Advantage plan is an HMO, you will choose in-network providers — your care generally isn’t covered if you use out-of-network providers, with the exception of emergency care. If you have a PPO, you have the option of using out-of-network providers, but you’ll pay more.

Provider networks vary in size from plan to plan. On average, Medicare Advantage networks include 46 percent of doctors and 51 percent of hospitals in a county, according to the Kaiser Family Foundation. If you’re far away from home for extended periods of time — say, you’re a snowbird — sticking to a network can be challenging, and you could end up with high out-of-pocket costs.

Important note: There are never any costs or limitations associated with a SilverSneakers membership. It can be used — at no cost — at thousands of participating locations around the country at any time. Members can also take SilverSneakers LIVE online classes.

Medicare Supplement Insurance (Medigap)

As its name implies, a Medicare Supplement insurance plan (Medigap) adds to Original Medicare and helps cover costs Original Medicare doesn’t, including deductibles, coinsurance, and copayments.

These plans, which are designated by different letters, are also offered by private insurance companies but are standardized across all states but three (Massachusetts, Minnesota, and Wisconsin). In other words, in the other 47 states, all “N” plans offer the same basic benefits.

Potential upsides: Unlike Medicare Advantage, a Medigap plan can be used with any provider that accepts Original Medicare. That means you have a vast network across the United States. In addition, many provide international coverage; Medicare Advantage plans do not. This makes Medigap especially attractive to older adults who have multiple residences or travel frequently.

Medigap also gives you more hospital options, which may give you access to prestigious or highly specialized facilities. The most robust Medigap plans can leave you with little or no out-of-pocket health care costs for covered services. Thus, they often appeal to people who require ongoing treatment or tend to use many health care services, Armes adds.

Potential drawbacks: Depending on the plan you choose, Medigap premiums can be significantly higher than what you’d pay for a Medicare Advantage plan. Monthly premiums vary depending on the plan, where you live, and other factors. Moreover, you have to buy a separate Medicare Prescription Drug Plan (Part D), and you may have to pay extra for vision, dental, and hearing care.

In general, Medigap plans offer fewer perks, though some do provide fitness benefits like SilverSneakers. Find a Medigap plan that includes SilverSneakers here.

How to Choose Which Is Right for You

Deciding between Medicare Advantage and Medigap can be tricky, especially since your health care usage and needs can change over time. Ask yourself a few key questions:

• Are you comfortable being limited to a network of doctors?
• How much medical care do you realistically receive in a typical year?
• Do you prefer to have prescription, vision, dental, and hearing coverage wrapped into a single Medicare Advantage plan?
• Do you value the travel coverage that some Medigap plans offer?
• Are you willing to pay a higher premium to reduce your out-of-pocket costs?

With those questions in mind, you can explore a few resources to help you assess your options:

• Medicare Plan Finder, a tool on the U.S. government’s official Medicare site, lets you search available Medicare Advantage and Medicare Prescription Drug Plans (Part D).
• Medigap Policy Search, another tool on the official Medicare site, lets you search available Medigap plans.

If you’re looking for Medicare Advantage or Medigap plans that include SilverSneakers, click here.

Check Your  SilverSneakers  Eligibility Instantly!  

SilverSneakers members can go to thousands of nationwide gyms and fitness locations, plus take SilverSneakers LIVE online classes that are designed for all fitness levels and abilities. If you have a Medicare Advantage plan, it may include SilverSneakers — at no additional cost. Check your eligibility instantly here.

Already a member? Get your SilverSneakers member ID and exclusive fitness and wellness content by activating your online account here.

Not eligible for SilverSneakers? You can still get 200+ free SilverSneakers On-Demand videos and stay in touch with us by creating your online account.