Medicare Advantage vs Medicare Supplement Insurance

Many new Medicare enrollees are surprised to learn that Original Medicare doesn’t cover every cost that might be associated with your healthcare. Adding Medicare supplemental insurance or replacing your Original Medicare policy with a Medicare Advantage plan can help extend your coverage and limit your healthcare costs. However, you cannot have both a Medicare Advantage plan and a Medicare supplement plan — so it’s important to understand the differences in these coverages before you enroll. Learn more about comparing Medicare Advantage vs Medicare Supplement Plans using Benzinga's educational guide.

What Is Medicare?

Medicare is a federal health insurance program primarily for men and women older than 65 and younger men and women living with select disabilities. Medicare has multiple parts, including:

• Part A (hospital insurance)
• Part B (medical insurance)

Part A and Part B coverage make up Original Medicare. Medicare also includes:

• Part C (Medicare Advantage plans that replace Original Medicare coverage)
• Part D (prescription drug coverage)

You can also add supplemental coverage to your Original Medicare policy, which helps fill in some of the coverage gaps that Original Medicare won’t help you pay for (like coinsurance percentages and select deductibles). 

What Is a Medicare Advantage Plan?

Medicare Advantage plans (also known as Medicare Part C coverage) are an alternative option to Original Medicare. This means that when you qualify for Medicare, you have the option to enroll in Original Medicare coverage (Part A and Part B) or replace this coverage with a Medicare Advantage plan (Part C). No matter which option you choose, you’ll have all of the benefits that are included on Original Medicare coverage.

Medicare Advantage plans are offered by private companies overseen and authorized by the federal government. Medicare Advantage plans have variable coinsurance rates, premiums and deductibles but also include coverage for many things that Original Medicare does not. For example, most Medicare Advantage plans include coverage for prescription drugs that you take outside of a hospital setting (Part D coverage). If you have Original Medicare, you’ll need to purchase separate Part D coverage for assistance covering the costs of prescription drugs.

Benefits on Medicare Advantage plans will vary by insurance provider. Beyond coverages found on Original Medicare, your insurance provider has control over which benefits it will offer and the amount you’ll pay for your coverage. Be sure to thoroughly read your policy’s terms and inclusions before signing onto coverage. 

Who Benefits From Medicare Part C?

There are many instances when you might benefit from a Medicare Advantage plan more than Original Medicare. Some of the most common reasons Medicare enrollees choose Part C coverage include the following.

• Additional benefits: The main draw of Medicare Advantage plans is that they often offer coverage beyond what is included in Original Medicare Part A and Part B. For example, many Medicare enrollees are surprised to learn that things like prescription drugs and dental care are not covered by Original Medicare. However, these and additional benefits may be included on Part C coverage at the discretion of the insurance provider.
• Easier plan management: When you enroll in Original Medicare, you may pay an independent premium for Part A and Part B coverage depending on your income and when you enroll in your insurance. With a Part C plan, you’ll pay a single premium, which can make this coverage easier to manage. 

If these benefits seem valuable to you, a Medicare Advantage plan might be the right option for your Medicare coverage. 

What Is Medicare Supplement Insurance?

Medicare supplemental insurance plans (sometimes referred to as Medigap coverage) are add-on coverages that you can combine with your Original Medicare coverage to pay for some of the things that Part A and Part B do not. There are 10 Medicare supplemental insurance options, but not everyone can purchase every plan type.

Unlike Medicare Advantage benefits, Medigap plan inclusions are standardized across companies. This means that no matter which company you purchase your Medigap coverage from, Plan A will always include the same benefits, as will other Medicare supplemental plan options. However, not every insurance company offers each Medicare supplemental plan option.

Take a look at all 10 Medigap policy options and the coverages included on each plan.

Plan A

Plan A includes the following benefits:

• Part A coinsurance and hospital costs for an extra 365 days after Original Medicare benefits are exhausted
• Part B coinsurance or copayment
• First 3 pints of blood
• Part A hospice care coinsurance or copayment

Plan B

Plan B includes the following coverages:

• Part A coinsurance and hospital costs for an extra 365 days after Original Medicare benefits are exhausted
• Part B coinsurance or copayment
• First 3 pints of blood
• Part A hospice care coinsurance or copayment
• Part A deductible

Plan C

Plan C includes the following benefits:

• Part A coinsurance and hospital costs for an extra 365 days after Original Medicare benefits are exhausted
• Part B coinsurance or copayment
• First 3 pints of blood
• Part A hospice care coinsurance or copayment
• Part A deductible
• Part B deductible
• Skilled nursing facility care coinsurance
• Up to 80% of care costs administered out of the country

Plan D

Plan D includes the following benefits:

• Part A coinsurance and hospital costs for an extra 365 days after Original Medicare benefits are exhausted
• Part B coinsurance or copayment
• First 3 pints of blood
• Part A hospice care coinsurance or copayment
• Part A deductible
• Skilled nursing facility care coinsurance
• Up to 80% of care costs administered out of the country

Plan F

Plan F includes the following benefits:

• Part A coinsurance and hospital costs for an extra 365 days after Original Medicare benefits are exhausted
• Part B coinsurance or copayment
• First 3 pints of blood
• Part A hospice care coinsurance or copayment
• Part A deductible
• Part B deductible
• Part B excess charges
• Skilled nursing facility care coinsurance
• Up to 80% of care costs administered out of the country

Plan G

Plan G includes the following benefits:

• Part A coinsurance and hospital costs for an extra 365 days after Original Medicare benefits are exhausted
• Part B coinsurance or copayment
• First 3 pints of blood
• Part A hospice care coinsurance or copayment
• Part A deductible
• Part B excess charges
• Skilled nursing facility care coinsurance
• Up to 80% of care costs administered out of the country

Plan K

Plan K includes the following benefits:

• Part A coinsurance and hospital costs for an extra 365 days after Original Medicare benefits are exhausted
• 50% of your Part B coinsurance or copayment
• 50% of the cost of your first 3 pints of blood
• 50% of your Part A hospice care coinsurance or copayment
• 50% of your Part A deductible
• 50% of your skilled nursing facility care coinsurance

The out-of-pocket maximum for Plan K coverage is $6,620 in 2022.

Plan L

Plan L includes the following benefits:

Part A coinsurance and hospital costs for an extra 365 days after Original Medicare benefits are exhausted

• 75% of your Part B coinsurance or copayment
• 75% of the cost of your first 3 pints of blood
• 75% of your Part A hospice care coinsurance or copayment
• 75% of your Part A deductible
• 75% of your skilled nursing facility care coinsurance

The out-of-pocket maximum for Plan L coverage is $3,310 in 2022.

Plan M

Plan M includes the following benefits:

• Part A coinsurance and hospital costs for an extra 365 days after Original Medicare benefits are exhausted
• Part B coinsurance or copayment
• First 3 pints of blood
• Part A hospice care coinsurance or copayment
• 50% of your Part A deductible
• Skilled nursing facility care coinsurance
• Up to 80% of care costs administered out of the country

Plan N

Plan N includes the following benefits:

• Part A coinsurance and hospital costs for an extra 365 days after Original Medicare benefits are exhausted
• Part B coinsurance or copayment
• First 3 pints of blood
• Part A hospice care coinsurance or copayment
• Part A deductible
• Skilled nursing facility care coinsurance
• Up to 80% of care costs administered out of the country

In some states, high deductible options for Plan F and Plan G are available. These plans allow you to pay less per month for your coverage. Additionally, if you qualified for Medicare before Jan. 1, 2020, you cannot purchase Plan C or Plan F coverage, as Medigap plans can no longer cover your Part B deductible for new Medicare enrollees. 

Who Benefits From Medigap Coverage?

Anyone who has Original Medicare coverage can benefit from a Medigap policy. Though Original Medicare does provide an expansive range of coverages, excess charges like coinsurance can quickly begin to add up and become unaffordable. Even if you aren’t sure whether you’ll be purchasing a Medicare Advantage plan or enrolling in Original Medicare, it’s worth exploring both options to fully estimate your likely medical care costs. 

Medicare Advantage vs Medicare Supplement: Can You Use Both Part C and Medigap?

No, you cannot have a Medicare supplemental insurance policy and a Medicare Advantage plan because you cannot use your Medigap coverage to pay for copayments, deductibles and premiums associated with your Medicare Advantage coverage. It is against the law for a Medicare supplemental plan provider to sell you coverage if you have a Medicare Advantage plan unless you make it clear that you’re also in the process of switching back to Original Medicare coverage. 

Benzinga's Best Medicare Providers

Here are our favorite brokers, providers and marketplaces to find a Medicare Advantage plan.

Comparing Your Medicare Options

Now that you know the differences with Medicare Advantage vs Medicare Supplement Insurance, you can take the next step. One important note to remember — you cannot have both Medigap coverage as well as a Medicare Part C plan. This makes it especially important to begin comparing your Medicare plan options and choices before you must sign up for coverage. Getting started with one of Benzinga’s many guides to Medicare options can be a smart first step when it comes to finding the best option for your needs.

Frequently Asked Questions: Medicare Advantage vs Medicare Supplement Plans