Medicare Advantage vs. Medicare Supplement: Which Gap Insurance Wins?

Medigap vs. Medicare Advantage: The Definitive Choice Guide

Deciding between Medicare Advantage (Part C) and Medicare Supplement (Medigap) is one of the most consequential choices U.S. retirees make. Both “gap” options try to solve the same problem — open pockets for expenses Original Medicare (Parts A and B) doesn’t fully cover — but they do it in fundamentally different ways. This guide is an exhaustive, evidence-based, and practical walkthrough designed to help you choose the right gap coverage for your health needs, budget, and lifestyle. Throughout I’ll include concrete 2026 figures, enrollment rules, real-world scenarios, ROI considerations, and a clear decision checklist.

Quick summary — the bottom line

If you want predictable, near-zero out-of-pocket risk for Medicare-covered services, broad provider freedom, and you can afford higher monthly premiums: Medigap (especially Plan G or high‑deductible Plan G) is usually superior.
If you prioritize lower monthly premiums, want bundled benefits (medical + Part D + extras), and accept networks and prior authorizations: Medicare Advantage can be the better, lower‑cost option — especially for generally healthy people who rarely use care.
Your final choice depends on (a) expected annual medical use, (b) need for provider freedom, (c) willingness to manage networks/authorizations, and (d) tolerance for catastrophic out-of-pocket risk.

Important data point (2026 context)

Medicare Part B standard premium for 2026: $202.90/month; Part B deductible: $283. (CMS, released Nov 14, 2025 — figures effective for calendar year 2026). (cms.gov)

Table of contents

What Medicare Advantage and Medigap actually are
How costs compare — premiums, deductibles, and catastrophic risk
Networks, prior authorization, and freedom to choose providers
Benefit differences: prescription drugs, vision, dental, and extras
Enrollment windows, guaranteed-issue rights, and switching rules
Three real-world examples (cost-model scenarios)
ROI / break-even analysis and decision matrix
Special cases: chronic care, travel, under-65 disability, low-income protections
Practical checklist: How to choose in 30 minutes
FAQs and expert recommendations
References and further reading (internal resources)

Table of Contents

1) What they are — simple definition, big differences

Bold definitions

Medicare Advantage (MA / Part C): Private plans that replace Original Medicare by contracting to deliver Part A and Part B benefits (and often Part D). You still have Medicare, but the insurance company administers benefits, often with provider networks, plan rules, and an annual maximum out‑of‑pocket (MOOP) limit. MA plans can be HMOs, PPOs, PFFS, or SNPs. (cms.gov)
Medigap (Medicare Supplement Insurance): Private supplemental policies that work with Original Medicare. Medigap pays some or all of the coinsurance, copays, and deductibles left by Parts A & B depending on the plan letter (A–N). Medigap does not work with Medicare Advantage (you cannot use both simultaneously). Medigap policies are standardized in most states. (medicare.gov)

Core philosophical difference

MA = Managed, bounded-cost model (cap your max annual risk; accept networks and utilization rules).
Medigap = Fee-for-service gap protection (pay higher premiums for predictable low per-episode costs and near-zero catastrophic risk).

2) How costs compare — premiums, deductibles, and catastrophic risk

Cost elements to weigh

Monthly premiums (Part B + MA premium or Part B + Medigap premium)
Annual deductibles and per-visit copays/coinsurance
Maximum out-of-pocket (MOOP) and catastrophic exposure
Drug coverage (Part D premiums and out-of-pocket prescription caps)
Irregular versus chronic utilization (one major hospitalization vs. many office visits)

Key 2026 numbers you must know (as of Jan 24, 2026)

Medicare Part B standard premium: $202.90/month; Part B deductible: $283. (These are baseline costs built into any path.) (cms.gov)
Medicare Advantage federal in‑network MOOP ceiling (plan-dependent ranges for 2026): HMO/PPO and other plan types can set MOOPs within CMS ranges; many plan MOOPs will be below the federal cap but median MOOPs have increased in 2026. Expect MOOPs commonly in the low-to-mid $4k–$9k range depending on plan type. (Analyses of the 2026 landscape show rising MOOPs and fewer lower‑MOOP options.) (bettermedicarealliance.org)
Medigap: For popular plans like Plan G, once you meet the Part B deductible (or the Medigap high deductible variant threshold), the plan pays nearly 100% of covered Medicare charges — effectively making your out‑of‑pocket for Part A/B services near zero. Medigap plans do not have MOOPs because they cover coinsurance and most cost sharing after deductibles as defined by the plan. (Medigap costs vary by insurer, age-rating method, and location.) (kff.org)
Part D prescription out-of-pocket cap (Inflation Reduction Act): $2,100 in 2026 (indexed). This is separate from MA MOOP and applies to drug costs. (cms.gov)

Comparative cost profile (generalized)

Medicare Advantage: lower or $0 plan premiums are common; you may still pay copays, coinsurance, and face a MOOP that can be several thousand dollars in a high‑use year. Good for low-use beneficiaries who want low monthly cost and extra benefits.
Medigap: higher monthly premiums but far lower variable cost when you use services. Best for high-use beneficiaries and those who want provider freedom and predictable costs.

Comparison table — quick view

Criterion	Medicare Advantage (MA)	Medigap (Medicare Supplement)
Typical monthly premium	Low to $0 (plus Part B)	Higher (plus Part B)
Annual deductibles/copays	Often present; per-service	Part A/B deductibles apply; copays covered depending on plan
Maximum annual risk	MOOP exists (plan cap; varies)	No MOOP — plan reduces cost sharing to near zero
Provider flexibility	Network restrictions common	Can see any provider accepting Medicare
Prior authorization	Often required	Not for Original Medicare services
Prescription drugs	Often included (MAPD) or add Part D	Add Part D separately
Best for	Healthy, low‑use, seeking low premium & extra benefits	Frequent users, chronic conditions, provider freedom

3) Networks, prior authorization, and provider freedom

Provider access

Medicare Advantage plans frequently use networks (HMO, PPO) that limit where you can go without higher cost sharing. If retaining your doctors matters, verify they are in-network. (cms.gov)
Medigap is built on Original Medicare: any provider who accepts Medicare fee-for-service can be used without network constraints.

Prior authorization and utilization management

MA plans frequently apply prior authorization and step therapy for certain procedures and drugs. This can create delays and appeals if care is urgent.
Medigap — because Original Medicare covers hospital and physician services subject to Medicare rules — generally avoids private plan utilization management for covered Medicare services (though Medicare can still use coverage rules).

Administrative friction

If you dislike phone calls, denials, and appeals, Medigap + Original Medicare is often a smoother clinical path.
If you are comfortable navigating prior authorization for lower premiums and extras, MA is workable.

4) Benefit differences: prescription drugs, vision, dental, and extras

Add-on benefits

Medicare Advantage: Many plans bundle Part D prescription coverage and add extras — dental, vision, hearing, fitness, OTC allowances — that Original Medicare + Medigap do not include by default.
Medigap: Does not include Part D or non‑Medicare benefits. You add a standalone Part D PDP for drugs and possibly buy separate dental/vision plans.

Prescription drugs & the IR Act cap

Part D reforms (Inflation Reduction Act) introduced an annual out-of-pocket cap for prescription drugs ($2,100 for 2026). This reduces catastrophic drug spending risk regardless of whether you have standalone Part D or MA with Part D. Confirm your plan’s formulary and gap coverage, especially for specialty drugs. (cms.gov)

Practical implication

If you want one-stop coverage with extras and are comfortable with networks, MA’s bundle may be attractive (lower monthly cost + perks). If drugs are the main worry but you want provider freedom, you can pair Medigap with Part D — but that increases the number of premiums you pay.

5) Enrollment windows, guaranteed-issue rights, and switching rules

When you can enroll or switch matters; mistakes are expensive.

Medicare Advantage election periods (overview)

Key MA election periods include the Initial Coverage Election Period (ICEP), Annual Enrollment Period (AEP) Oct 15–Dec 7, Medicare Advantage Open Enrollment Period (Jan 1–Mar 31), and various Special Enrollment Periods (SEPs) for qualifying events. You must live in the plan’s service area to join. (cms.gov)

Medigap open enrollment and guaranteed issue

The Medigap Open Enrollment Period is a six‑month window that starts the month you turn 65 and are enrolled in Part B. During this period insurers must sell you any Medigap plan available in your state regardless of health (no underwriting). Outside that window insurers can use medical underwriting unless you have a guaranteed-issue right triggered by specific qualifying events (losing employer coverage, moving out of service area, trial rights after joining MA the first time, etc.). Check your state for added protections — many states have greater rights than federal minimums. (medicare.gov)

Guaranteed-issue rights practical tips

If you plan to try Medicare Advantage before committing, be aware of “trial rights”: switching back to Medigap without underwriting is only possible within specific windows (e.g., within 12 months of first joining MA under some circumstances). Document all notices if you lose coverage. (medigap.com)

Why this matters

Missing Medigap’s open enrollment often means medical underwriting or denial, and higher premiums later. If you’re considering Medigap, the timing around Part B enrollment and job-based coverage losses is crucial.

6) Three real-world examples: cost-model scenarios

Below are three anonymized, realistic scenarios to show how total costs shift depending on health use and choice. Numbers are estimates to illustrate structure (use them to compare relative outcomes).

Assumptions (annual basis, 2026 context)

Part B premium: $202.90/month ($2,434.80/year). (cms.gov)
Medigap Plan G average premium (example geography, age 70): $150–$300/month depending on factors — use conservative $260/month ($3,120/year) for illustration. (Note: premiums vary widely by location and insurer.)
Medicare Advantage average premium: $0–$25/month — assume $12/month ($144/year) for a typical low-premium MAPD.
MA average MOOP: variable; we’ll use $4,200 MOOP in this example; Medigap Plan G has effectively minimal additional out-of-pocket for Medicare-covered services after deductible.

Scenario A — Low healthcare use (healthy retired couple)

Services used: routine visits, preventive care, occasional acute visit; annual total Medicare-covered spend: $1,000.
Cost MA: Part B ($2,434.80) + MA premium ($144) + out-of-pocket for visits (say $300) = $2,878.80.
Cost Medigap: Part B ($2,434.80) + Medigap premium ($3,120) + limited coinsurance (near $0 if Plan G) = $5,554.80.
Winner: MA — much lower annual cost when usage is low.

Scenario B — High acute-cost year (hospitalization + surgery)

Medicare-covered services: hospitalization + surgery — expected Medicare allowed amounts = $50,000 in the year.
Cost MA: Part B ($2,434.80) + MA premium ($144) + MOOP reached (let’s assume $4,200) = $6,778.80.
Cost Medigap: Part B ($2,434.80) + Medigap premium ($3,120) + Part A deductible ($1,736 for 2026) = $7,290.80*. However, many Medigap plans cover the Part A deductible (Plan G covers Part A coinsurance but not the Part B deductible — confirm plan details). In practice, Medigap often results in very low marginal costs after hospital deductible. (cms.gov)
Winner: Close — in many acute high-cost years, Medigap and MA both shield you from catastrophic costs. The exact winner depends on MOOP and the Medigap premium paid.

Scenario C — Chronic care (multiple specialists, frequent tests, ongoing therapy)

Medicare-covered services: $20,000/year
Cost MA: Part B ($2,434.80) + MA premium ($144) + regular copays/coinsurance (estimate $2,500 before hitting MOOP) = $5,078.80.
Cost Medigap: Part B ($2,434.80) + Medigap premium ($3,120) = $5,554.80.
Winner: Depends — if MA copays escalate toward MOOP you might pay less with MA (if low premium), but if services are frequent but below MOOP, Medigap’s certainty wins. For chronic conditions requiring out-of-network specialists, Medigap’s provider freedom can be decisive.

Note: These scenarios are illustrative. Exact premiums and copays must be verified with specific carriers and plans. The main takeaway: MA often wins when use is low; Medigap often wins when usage and need for provider choice are high.

7) ROI / break-even analysis and decision matrix

How to decide mathematically

Aggregate your total fixed annual premium cost: Part B + MA premium OR Part B + Medigap premium + Part D if required.
Estimate expected annual utilization cost under each plan (copays, coinsurance, unreimbursed deductibles).
Add worst-case catastrophic exposure (the MOOP for MA; effectively zero incremental costs for Medigap beyond premiums).
Compare totals and compute variance under three scenarios (low, average, high use).
Consider non-monetary factors: continuity with doctors, prior authorization risk, travel needs.

Break-even example (concept)

If Medigap premium minus MA premium = $X/year, and expecting to spend $Y/year in copays under MA, Medigap becomes worthwhile if Y > X (plus factoring in peace-of-mind/catastrophic avoidance). For many people, X (extra Medigap premiums) equals several thousand dollars — so you need to expect several thousand per year in MA cost-sharing to justify Medigap financially.

Decision matrix (high-level)

Primary Concern	Choose MA if…	Choose Medigap if…
Lower monthly cost	You’re healthy and have low expected use	You can’t afford high premiums or prefer predictable costs? (then MA)
Catastrophic risk protection	You’re okay with a MOOP and potential appeals	You want the fewest surprises and near-zero pay-as-you-go costs
Provider freedom	You’re willing to change providers or your docs are in network	You must keep your providers and travel to many specialists
Chronic illness	You’re confident care will be in-network and copays manageable	You have frequent, expensive care and need predictable coverage
Extra benefits (dental/vision)	You value bundled extras and Rx convenience	Extras are less important; you prefer higher provider freedom

8) Special cases: chronic care, travel, under‑65 disability, and low-income protections

Chronic care & complex conditions

If you require multiple specialists, frequent imaging, outpatient therapies, and hospitalizations, Medigap often provides the best protection against surprise charges and network churn. It also reduces admin friction for prior authorizations.

Travel outside your region / snowbirds

Medigap generally pays for Medicare‑covered services anywhere in the U.S. (and often some emergency care abroad depending on plan). MA plans are geographic and may not cover out‑of‑area care except emergencies.

Under‑65 beneficiaries (disability, ESRD)

Federal law does not require insurers to sell Medigap to people under 65, though some states do. If under 65 due to disability or ESRD, check state rules — you may have limited options or higher premiums. Medicare.gov urges checking state insurance departments for rights. (medicare.gov)

Low-income subsidies and assistance

Extra Help and Medicare Savings Programs interact with both MA and Medigap decisions; certain programs may make MA plans more attractive if they reduce premiums and cost sharing. Work with a benefits counselor to evaluate.

9) Practical checklist — How to choose in 30 minutes

Confirm your Part B enrollment date (open Medigap window = month you turn 65 and are enrolled in Part B). (medicare.gov)
List your top 5 providers and check whether they accept Medicare (for Medigap) or are in-network for preferred MA plans.
Estimate your expected Medicare-covered spend this year (low: <$2,000, medium: $2k–$10k, high: >$10k).
Pull quotes for: (a) a popular MA MAPD plan in your ZIP (include premium + in-network MOOP), and (b) Medigap Plan G + standalone Part D premium.
Run the simple math from Section 7 to compare totals across low/medium/high scenarios.
Consider non-financial factors: travel, continuity of providers, tolerance for prior authorization.
If undecided, consider a short-term trial (join MA in open enrollment, test for up to 12 months, but be mindful of Medigap guaranteed-issue limits and trial-right rules). (medigap.com)

10) FAQs & expert recommendations

Q: Can I have Medigap and Medicare Advantage at the same time?
A: No. Medigap works only with Original Medicare (Parts A & B). If you enroll in MA, you cannot buy a Medigap policy to cover MA cost-sharing.

Q: Is Plan F still available?
A: Plan F is closed to new Medicare enrollees who became eligible after Jan 1, 2020. People eligible before that date may still have Plan F. For new buyers, Plan G is the closest equivalent. (kff.org)

Q: Are Medicare Advantage plans better for prescription drugs now that Part D has a cap?
A: The Part D OOP cap (Inflation Reduction Act) reduces prescription cost risk for all Part D enrollees, whether in MA with Part D or standalone PDPs. Check formularies and pharmacy networks for access to your specific drugs. (cms.gov)

Expert recommendation (short)

If you have chronic conditions, see multiple specialists, or prioritize provider freedom: strongly favor Medigap (Plan G is the leading choice for new enrollees).
If you are healthy, want low premiums and extra benefits, and your doctors are in network: Medicare Advantage is a financially sensible choice.
Always price out both options in your ZIP code and run the three-scenario math. The geographic variation in premiums and MA offerings is huge.

11) References & further reading

Authoritative sources used in this guide

CMS — 2026 Medicare Parts A & B Premiums and Deductibles (CMS factsheet). (cms.gov)
CMS — Medicare Managed Care Eligibility and Enrollment (MA election periods & rules). (cms.gov)
Better Medicare Alliance / Avalere analysis — 2026 Medicare Advantage Landscape (median MOOP trends). (bettermedicarealliance.org)
Medicare.gov — Get ready to buy Medigap (open enrollment & guaranteed-issue guidance). (medicare.gov)
KFF — What is Medigap? (overview and policy context). (kff.org)

Internal deep-dive articles (read next)

Final actionable steps

Step 1: Gather quotes in your ZIP for (a) a popular MAPD and (b) Medigap Plan G + Part D.
Step 2: Run the 3-scenario comparison from Section 6 with your own estimated use.
Step 3: If still unsure, talk with a licensed counselor (State Health Insurance Assistance Program — SHIP) or a fee-for-service insurance broker who can show side-by-side numbers for your area.

If you want, I can:

Run a personalized cost comparison using your ZIP code, approximate age, and expected annual usage; or
Pull 3 MA plans and 3 Medigap quotes for a chosen ZIP and run the break-even math with a downloadable table.

Which would you prefer — personalized quotes for your ZIP, or a downloadable scenario spreadsheet template you can fill in yourself?