# October, 31, 2019

Which Is Better, Medigap or Medicare Advantage?

Medicare beneficiaries have to make many decisions. One of the first choices you face is whether you want Original Medicare with a Medigap and Part D plan, or a Medicare Advantage (MA) plan. Unfortunately, there is no one-size-fits-all answer to the question, which is better, Medigap or Medicare Advantage. This post walks you through both options to help you decide what works best for your unique situation.

Please note that this article assumes you have a working knowledge of the Medicare program and its terminology. If not, our Understanding the Basics of Medicare page is a great place to start.

Original Medicare + Medigap + Part D = Option One

Original Medicare gives you hospital coverage through Part A and outpatient medical insurance via Part B. Prescription drug coverage comes courtesy of a Part D plan, sold by private insurers.

Each “part” carries a number of out-of-pocket costs, including:

  • Monthly premiums
  • Deductibles
  • Co-insurance
  • Co-pays

The “gap” part of Medigap refers to these out-of-pocket costs.

Your costs under Original Medicare

Medicare has yet to release its costs for 2020. Therefore, all costs listed below are for 2019. Amounts change yearly.

Please note that Part D costs vary according to the plan and provider you choose.

Comparing your Medicare costs

Medicare Part A

Most people don’t pay a monthly premium for Part A. However, if you did not pay Medicare taxes for the required 40 quarters (10 years), the standard Part A premium is $437 per month. Those who paid Medicare taxes for 30 to 39 quarters have a monthly premium of $240.

Part A also has a deductible of $1,364 each benefit period. A benefit period begins the day you enter the hospital and ends once you go 60 days without receiving hospital care. If you receive inpatient care at any point during that 60 days, you’re in the same benefit period. If you go back to the hospital on day 61, though, a new benefit period begins. That means you owe another $1,364 deductible.

You only pay Part A co-insurance if you’re in the hospital for 61 days or more. Days 1 through 60, you pay zero for each benefit period (except the deductible). Days 61 through 90 cost you $341 per day. That amount jumps to $682 on day 91. You pay that through your “lifetime reserve days.” You get 60 of these. After that, you are responsible for 100 percent of the cost of your hospital care.

Medicare Part B

Your costs under Part B are a bit easier to understand.

  • The standard monthly premium is $135.50
  • You have a yearly deductible of $185
  • Co-insurance is usually 20 percent of the Medicare-approved amount

Please note that for both Part A and Part B, monthly premiums may be higher if you exceed certain income thresholds. These also change yearly. In 2019, you typically pay more if your income is above either $85,000 (single) or $170,000 (married) per year.

Why We Suggest Original Medicare + Medigap

Although Medicare provides excellent healthcare coverage, out-of-pocket costs can add up quickly, especially if you have multiple chronic conditions or require a lengthy hospital stay.

Medicare Supplement Insurance, commonly referred to as Medigap, helps pay many of your out-of-pocket costs under Original Medicare. And while no Medigap plan covers 100 percent of your costs, all of them cover your hospital co-insurance and give you an extra 365 hospital reserve days. In addition, all Medigap plans cover at least part of your Part B co-insurance.

For full information on Medigap, please see our Medicare Supplement page.

Medicare Advantage insurance icons

How Does Medicare Advantage Compare?

Medicare Advantage enrollment has grown every year for over a decade. In 2018, over one-third of beneficiaries chose Medicare Advantage over Original Medicare. Numbers vary by state, as MA enrollment depends on plan options in your area.

All MA plans must cover the same services as Parts A and B, but most offer additional coverage as well. For example, many MA plans include prescription drug coverage. You also find plans that cover routine vision and dental care, gym memberships, and more.

In addition, most people pay less under Medicare Advantage, even though they pay both the Part B premium and a monthly premium for their MA plan. That’s because most MA plans charge a set co-pay for services rather than the 20 percent co-insurance required by Original Medicare.

Costs vary according to the plan and insurer. Our plan finder tool helps you compare plan options. Just enter your location and coverage start date then hit Continue to compare coverage and costs for your area.

So, How Do You Choose Between Medigap and Medicare Advantage?

Since you can’t have both a Medigap and an MA plan, you need to decide which option best meets your needs and budget. We recommend you consider the following:

  • Coverage: Not all MA plans cover the same services, although all must meet the minimums set by Original Medicare.
  • Do you travel: If you’re a frequent traveler or spend summers in one state and winters in another, Medicare Advantage probably won’t work for you. That’s because most MA plans don’t cover non-emergency care received outside your network or service area.
  • Out-of-pocket costs: This includes the full cost of coverage, including premiums, co-insurance, and co-pays. Many beneficiaries fail to look beyond the monthly premium. Unfortunately, low premiums often hide higher out-of-pocket costs.
  • Provider network: Original Medicare allows you to visit any provider who accepts Medicare. No referrals, no network restrictions. Medicare Advantage plans usually have a provider network. And, depending on where you live, that can be fairly restrictive.

Taking the time to consider your options could save you hundreds or even thousands of dollars on your healthcare.

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Donna Frederick

After retiring from a career as an executive travel counselor in 2006, Donna Frederick embarked on a second career as a licensed insurance agent. During that first year, many clients told Donna how overwhelmed they felt by Medicare, but that her assistance helped them finally understand the Medicare program. That experience inspired Donna to focus her efforts on educating her clients to ensure they fully understand their Medicare options. Today, Donna takes pride in providing outstanding customer service and going the extra mile to make sure each client knows all of their options and has a sound understanding of their Medicare plan, from costs to coverage and all points in between.

The MedicareUSA website is operated by HealthPlanOne, LLC a licensed health insurance agency based in Connecticut; in California d/b/a HPOne Insurance Agency, license #OF30784. HealthPlanOne, is a licensed and certified representative of Medicare Advantage HMO, PPO and PPFS organizations and stand-alone prescription drug plans with a Medicare contract. Enrollment in any plan depends on contract renewal.

For a complete list of available plans please contact 1-800-MEDICARE (TTY users should call 1-877-486-2048), 24 hours a day/7 days a week or consult www.medicare.gov.

The purpose of this communication is the solicitation of insurance. Contact will be made by an insurance agent/producer or insurance company.

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Last Updated 12/21/2018