Medicare Advantage vs. Medigap

One of the most common questions we hear from people approaching 65 is whether they should choose a Medicare Advantage plan or pair Original Medicare with a Medigap (Medicare Supplement) policy. Both approaches are designed to help with costs Original Medicare doesn't fully cover, but the way they work — and the tradeoffs involved — are quite different.

How Medicare Advantage works

Medicare Advantage plans are offered by private insurers as an alternative to Original Medicare. They typically bundle hospital coverage, medical coverage, and often prescription drug coverage into a single plan, and many include extra benefits like dental, vision, or hearing. In exchange, most Medicare Advantage plans use a network of doctors and hospitals, similar to how many employer health plans work, and out-of-pocket costs (copays, coinsurance) are generally paid as you use care rather than through a flat monthly premium alone.

How Medigap works

Medigap policies are designed to work alongside Original Medicare, not replace it. They help cover the "gaps" left by Original Medicare, such as copayments, coinsurance, and deductibles. Because Medigap works alongside Original Medicare, you generally keep the freedom to see any doctor or hospital nationwide that accepts Medicare, without needing referrals or staying in-network. Medigap policies typically carry a higher monthly premium than Medicare Advantage, but often result in more predictable, lower costs when you actually need care.

What changed for 2026: the Part D out-of-pocket cap

As of 2026, Medicare Part D drug coverage includes a yearly out-of-pocket cap of $2,100, after which your plan covers 100% of costs for covered prescription drugs for the rest of the year. This cap applies whether your drug coverage comes through a standalone Part D plan or is bundled into a Medicare Advantage plan. Medicare has also introduced the Medicare Prescription Payment Plan, an optional program that lets you spread your out-of-pocket drug costs into monthly installments over the year instead of paying larger amounts at the pharmacy. Medigap policies don't cover prescription drugs, so this change doesn't apply directly to Medigap — but it's a helpful piece of the picture when weighing your overall costs between the two approaches.

Questions worth asking yourself

Do you travel frequently or split time between states, where network restrictions could matter more? Do you have a preferred doctor or specialist you don't want to risk losing access to? Would you rather pay a more predictable monthly premium, or a lower premium with more variable costs depending on the care you need? There's no single right answer — the better fit depends on your health needs, budget, and how much you value flexibility versus predictability.

How we help

We compare plans across multiple carriers so you can see the tradeoffs side by side for your specific situation, rather than guessing based on a generic comparison chart.