Medigap or Medicare Advantage Plans, Which is Better?
If you're approaching 65—or if you’ve worked past 65 and are just now enrolling in Medicare—you’ve probably discovered that signing up for Medicare Part A & B is just the beginning. Original Medicare helps cover a lot, but not everything. That’s where Medigap and Medicare Advantage plans come into play.
In this post, we’ll break down the key differences, pros and cons of each, and help you decide which path might be right for your needs.
Why You Need a Supplemental Plan
Medicare Part A and B cover many health services, but they leave behind some pretty significant out-of-pocket costs. For instance:
A hospital stay can cost you $1,700 in 2025.
Skilled nursing rehab? That’s $300 per day.
And Medicare only covers 80% of outpatient services like doctor visits, chemo, and surgeries.
That’s why most people choose between a Medigap (also known as Medicare Supplement) plan or a Medicare Advantage plan to help manage those extra costs.
What is Medigap?
Medigap sits underneath your Medicare A & B coverage, helping cover the costs that traditional Medicare doesn’t.
Key Features of Medigap:
You pay a fixed monthly premium instead of unpredictable out-of-pocket costs.
You can visit any doctor or hospital nationwide that accepts Medicare.
Plans are standardized by letter (A, B, C, D, F, G, K, L, M, and N). Note that Plans C and F are closed to new enrollees, so Plan G is now the most comprehensive available for newcomers.
Pro Tip: Even though the benefits of Plan G are the same across all insurance companies, prices vary widely. If you live in a state like Connecticut, for example, compare prices on the Medicare website to find the best rate.
What Medigap Doesn’t Cover:
Prescription drugs (you’ll need to enroll in Part D separately).
Dental coverage, which usually costs an extra $40–$60/month.
You'll want to weigh whether paying for dental is worth it based on how much coverage you’ll actually use. Many people find they’re paying more than they’re getting in return.
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When to Enroll in Medigap
You have a six-month Medigap open enrollment period when you’re first eligible for Medicare. That’s:
3 months before your 65th birthday
The month of your birthday
And 3 months after
If you delay Medicare because you're still working, you have 8 months after you or your spouse retire to enroll.
During this time, you won’t have to answer any health questions. But if you wait and try to enroll later, you might be subject to medical underwriting—meaning you could be denied coverage if you have pre-existing conditions.
However, in Connecticut and New York, you can switch to a Medigap plan anytime, regardless of health status. That’s not true in most other states.
What is Medicare Advantage?
Medicare Advantage (Part C) is an all-in-one alternative to Original Medicare. Instead of adding a second insurance plan, you’re replacing Original Medicare with a private plan that includes A & B, and often Part D and other extras.
Key Features of Medicare Advantage:
Typically lower premiums than Medigap (some plans are $0/month).
Includes prescription drug coverage and often dental/vision benefits.
You agree to use a network of doctors and hospitals (local to your area).
So how do $0 plans work? When you sign up for Medicare Advantage, the government sends your Part B premium directly to the private insurer. That money helps cover your care, so the insurer may not charge you an additional monthly premium.
There Are Trade-Offs:
You’ll usually pay co-pays for services, with a 2023 out-of-pocket max of $8,300 in-network.
Your network can change from year to year, and not all doctors participate.
Referrals and pre-authorizations are often required, especially with certain plan types.
Some denials of care and claims issues have been reported, especially at end-of-life care.
Types of Medicare Advantage Plans
Let’s break down the most common types:
HMO (Health Maintenance Organization):
Must use in-network doctors
Need referrals for specialists
Lowest premiums (often $0/month)
Most restrictive
PPO (Preferred Provider Organization):
Use in- or out-of-network providers
No referrals needed
More flexibility but higher costs if you go out-of-network
HMO-POS (Point of Service):
Like an HMO, but allows out-of-network care with referrals
More flexibility, but higher out-of-pocket costs
So, Which is Better: Medigap or Medicare Advantage?
There’s no one-size-fits-all answer—it depends on your health, lifestyle, and budget.
You Might Prefer Medigap If:
You travel or live in multiple states
You want predictable costs and freedom to see any doctor
You have significant health needs (e.g., cancer, autoimmune disease)
You don’t want to deal with network restrictions or claim denials
You Might Prefer Medicare Advantage If:
You’re in good health
You want a low or $0 premium
You don’t mind changing doctors if your network changes
You’re OK navigating referrals and co-pays
In states like CT and NY, you have the option to start with Medicare Advantage and switch later to Medigap without being denied coverage due to health issues.
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Closing Thoughts
Choosing between Medigap and Medicare Advantage is one of the most important decisions you'll make about your healthcare in retirement. Think about your health today, but also consider what the future might bring. Your choice can impact your access to care, your freedom to travel, and your financial stability.
If you have questions about your specific situation or need help comparing plans in your area, consider speaking with a licensed Medicare advisor.
If you have a question or topic that you’d like to have considered for a future episode/blog post, you can request it by going to www.retirewithryan.com and clicking on ask a question.
As always, have a great day, a better week, and I look forward to talking with you on the next blog post, podcast, YouTube video, or wherever we have the pleasure of connecting!
Written by Ryan Morrissey
Founder & CEO of Morrissey Wealth Management
Host of the Retire with Ryan Podcast