If you're trying to decide between a Medicare Advantage (Medicare Part C) plan and a Medicare Supplement (Medigap) Plan, or if you're just unsure about the benefits each program offers, here's a quick overview of these types of plans and how they compare.
There are several different types of Medicare Advantage plans: HMO (Health Maintenance Organization), PPO (Preferred Provider Organization), PFFS (Private Fee-for-Service), SNP (Special Needs Plan), HMO-POS (Health Maintenance Organization Point-of-Service), and MSA (Medical Savings Account). For an overview of these types of plans, please see Medicare Part C-Medicare Advantage Plans.
There are also several types of Medigap policies; for more details, Medigap Supplemental Plans. Some states sell Medicare SELECT policies. The rules of these policies are somewhat different from other Medicare Supplement Plans. For example, with Medicare SELECT, you generally have to choose a doctor within the plan's network.
Medicare Advantage and Medicare Supplement plans don't work together; we don't recommend that you try to sign up for both. In fact, you cannot be sold and use a Medigap plan if you enroll in a Medicare Advantage plan.
Here's a chart that compares these two types of insurance (both sold by private companies).
Must have Original Medicare, Part A and Part B, and live in service area.
Takes all applicants other than those with end-stage renal disease, except in certain circumstances.
Must have Original Medicare, Part A and Part B. These plans are used with Original Medicare.
If you enroll during your Medigap Open Enrollment period, or if you qualify for guaranteed issue rights, the insurance company may not deny your application or charge you more if you have certain health conditions.
If you don't enroll during your Medigap Open Enrollment period, the insurance company can use medical underwriting to decide whether to accept your application and how much to charge you.
Generally, Medigap Open Enrollment Period begins as soon as you're enrolled in Medicare Part B, and continues for six months. See medicare.gov for more information.
Your Medigap policy covers only you, not your spouse.
Typically, you pay cost-sharing (copayments) for most medical services.
Plans have an out-of-pocket annual maximum.
You still need to pay your Medicare Part B premium.
Premium may vary with gender and health and may go up with age.
Premium for the same plan may differ from company to company.
Companies may underwrite (adjust premium based on health factors) unless you sign up during the Medigap Open Enrollment Period or you qualify for guaranteed issue rights.
Generally, no copayment costs for Medicare-covered services at time of service.
No out-of-pocket maximum.
Provider choice and availability
HMOs and PPOs maintain provider networks. They must have available Medicare-assigned providers in order to accept new members.
PFFS plans have no provider network. It may be hard to find providers who accept it in some areas.
HMOs generally cover in-network only. Referrals may be required for specialist visits.
PPOs cover out-of-network providers, but costs may be higher.
In PPO plans, usually referrals by your doctor aren't required when you need to see a specialist.
You can go to any doctor or other health care provider that accepts Medicare assignment, unless you have a Medicare SELECT plan (which might require you to choose a doctor in the plan's network).
Usually referrals by your doctor aren't required when you need to see a specialist. If you have a Medicare SELECT plan, ask about their referral policy.
It may be hard to find providers accepting Original Medicare, Part A and Part B, in some areas.
Medigap insurance may be used for treatments at major medical facilities.
You can generally get medical services in any state or U.S. territory (unless you have a Medicare SELECT plan).
Prescription drug coverage
If you want drug coverage, consider enrolling in a Medicare Advantage Prescription Drug plan. If your Medicare Advantage plan does not include drug coverage, you can enroll in a Medicare prescription drug plan.
With a PFFS plan, you may choose either the plan's prescription drug coverage, if offered, or a stand-alone Medicare prescription drug plan.
Not included. If you want this coverage, you may want to consider enrolling in a stand-alone Medicare Part D prescription drug plan.
Do benefits change? Is the plan renewable?
Benefits may change yearly. You usually remain in a plan unless you disenroll during the Annual Election Period (AEP) or Medicare Advantage Disenrollment Period.
Benefits don't generally change. Guaranteed renewable as long as you pay the premium and you were truthful on the application. No Annual Election Period (AEP) for Medigap plans. However, if you drop this plan, you might never get it again.
Some Medicare Advantage plans include routine dental, vision
Some offer additional alternative medicine package.
Plans typically cover some of the "gaps" in Original Medicare (Part A and Part B) coverage, such as copayments and deductibles.
Some plans also cover other services, such as medical care when traveling outside the country.
For whom it works best
Network plans may be good for people who otherwise can't find a Medicare provider.
May save money unless you need frequent appointments or treatments.
Having a packaged plan may simplify choices.
May be good for travelers or those with vacation homes in a different state.
May save money for people needing high-cost or frequent care.
How to comparison shop
Plans are not standardized. You can use the plan comparison form on this page, contact 1-800-MEDICARE (TTY users should call 1-877-486-2048), 24 hours a day/7 days a week or at Medicare.gov.
10 types of Medigap plans are standardized in 47 states; each plan is labeled with a letter (such as Plan B). Once you decide which plan you want, you can compare different companies offering the same plan. For example, if you choose Plan B, you can look at the prices and any extra options that different companies might have for Plan B. You may also want to choose a health insurer you're already comfortable with, or you can shop around for your best price -- it's up to you. You can use the plan comparison form on this page, or visit Medicare.gov.