Answer:

Medigap and Medicare Advantage (Part C) both offer additional cost sharing options beyond what Original Medicare (Part A and Part B) offers. In this way they are similar, they do however have some notable differences and are important not to confuse (especially since beneficiaries can’t hold both a Medigap and Medicare Advantage policy).

The main difference between Medigap and Medicare Advantage is that Medigap fills in the gaps in Original Medicare, while Medicare Advantage offers an alternative to Original Medicare.[1]

In terms of premiums and cost-sharing: Medigap generally offers higher premiums in exchange for better cost-sharing, while Medicare Advantage generally offers lower premiums in exchange for less favorable cost-sharing than Medigap. In some cases, Medicare Advantage can actually offer lower premiums than what Original Medicare does, while Medigap plans always charge a premium beyond what you pay with Original Medicare.

In terms of other benefits: Medigap cannot offer drug coverage and generally doesn’t include additional benefits beyond what Medicare covers (it only improves the cost-sharing already offered by Original Medicare). Meanwhile, Medicare Advantage can offer drug coverage and can also offer coverage for other benefits not covered by Original Medicare like vision, dental, hearing, and wellness programs.

In terms of how they are structured: Both are provided by private insurers, but Medigap is a standalone coverage type that is not part of Medicare, while Medicare Advantage is part of Medicare (it is Part C). Medicare Advantage providers contract with Medicare to provide all your Part A and Part B benefits, where Medigap providers do not.

TIP: Medigap can be paired with a Part D drug plan and so can a Medicare Advantage plan without drug coverage. Those who want drug coverage will either need to choose a Medicare Advantage plan with drug coverage or will need to get a standalone Part D plan.

Citations

  1. Medigap & Medicare Advantage Plans. Medicare.Gov.

Can't find the answer? Ask your question here