Choosing Medicare coverage comes with a whole new vocabulary. You’ll hear several terms, like original Medicare, Medicare Advantage, and Medigap, that sound similar but work in different ways. Understanding how each option is structured makes it much easier to choose coverage that fits your health needs and budget.
Here, we explain how each option works, what it covers, how costs are billed, and how much freedom you’ll have when choosing doctors and hospitals. Let’s take a look at your options.
What original Medicare (Part A and Part B) includes
Original Medicare is the traditional federal government program. It has two parts, and you must enroll in both.
- Part A (hospital insurance) helps cover hospital stays, skilled nursing facility care, hospice, and certain home health services.
- Part B (medical insurance) helps cover doctor visits, outpatient care, medical equipment, and preventive services.
How original Medicare works
- You pay a monthly Part B premium and are responsible for a deductible, copays, and coinsurance. Some people must pay a Part A premium, depending on their work history, but most people qualify for free Part A coverage.
- After meeting your deductible, you typically pay 20% of approved Part B services with no annual cap on what you might spend.
- You can see any doctor or visit any hospital in the U.S. that accepts Medicare. There are no networks or referrals.
- What’s not included: Routine dental, vision, hearing, and prescription drugs are not covered. Drug coverage requires a separate private prescription drug plan called Medicare Part D.
What Medicare Advantage (Part C) includes
Medicare Advantage plans are the all-in-one alternative to original Medicare. They’re offered by private insurance companies approved by Medicare. When you enroll, the plan replaces how you receive your Part A and Part B benefits.
- Plans must cover everything original Medicare covers.
- Most plans also include prescription drug coverage.
- Dental, vision, hearing, and wellness programs are common extra benefits.
How Medicare Advantage works
- Plans often have low or no monthly premiums, but you must still pay the Part B monthly premium. You also may be responsible for deductibles, copays, and coinsurance. Costs and rules vary by plan.
- Most plans use HMO or PPO networks. Costs are kept down by staying within the plan’s network of doctors and hospitals. Going outside the network may cost more or not be covered at all.
- Doctor visits, tests, specialist visits, and hospitalizations often require referrals from your primary care physician or prior authorization from your insurer.
- Annual out-of-pocket caps limit your exposure to deductibles, copays, and coinsurance.
- Plans typically operate within a defined geographical service area, which can be inconvenient if you travel frequently.
What Medigap plans do
The open-ended cost exposure under the 20% coinsurance of original Medicare is what many people refer to as the “gap.” It often leads them to supplement with a Medigap plan. Medigap, also called Medicare supplement insurance, works alongside original Medicare to fill the gaps, but it doesn’t replace it.
- Medigap helps pay some or all of the deductibles, copays, and coinsurance that original Medicare leaves for the individual to pay. Some plans also provide coverage for emergency care while traveling abroad.
- Medigap’s ten plans are standardized and have letter names (such as Plan G or Plan N). The benefits for each plan letter are identical nationwide, but individual plans can vary in price and quality of customer service depending on the insurer.
- Medigap is not a way to obtain additional Medicare benefits, such as vision, dental, or drug coverage. You would still need to buy separate Part D and other policies to cover those areas.
Important to know: You can’t have a Medigap policy and a Medicare Advantage plan at the same time.
Why people choose Medigap
- Predictable costs: You pay a monthly premium to the Medigap insurer, in addition to your Part B premium. Medigap policies significantly reduce or eliminate your out-of-pocket costs for copays, coinsurance, and deductibles.
- Nationwide access: Because Medigap works with original Medicare, you retain the freedom to see any Medicare-accepting provider nationwide without referrals or authorizations.
Seeing the differences side by side
| Feature | Original Medicare (Parts A and B) alone | Original Medicare + Medigap + Part D | Medicare Advantage (Part C) |
| Primary coverage | Government-run | Original Medicare + private policies | Private plan that replaces Parts A and B |
| Provider choice | Any doctor who accepts Medicare (nationwide) | Any doctor who accepts Medicare (nationwide) | Limited to the plan’s network (regional) |
| Monthly premiums | Part A (most often free) + Part B | Part B, Medigap, and Part D | Part B + your plan premium (often $0) |
| Out-of-pocket costs | Parts A and B deductibles, copays, and coinsurance | Very low to none (Medigap pays your share) | Deductibles, copays, and coinsurance (varies by plan) |
| Out-of-pocket cap | None | Yes (determined by the Medigap plan you select) | Yes (determined by the plan you choose) |
| Extra benefits | None | None | Often yes (bundled into the plan) |
| Travel coverage | Nationwide | Nationwide, plus some foreign coverage with certain Medigap plans | Extent of the plan’s service area |
| Prescription drugs (Part D) | Separate Part D plan required | Separate Part D plan required | Usually included |
Matching programs to preferences
Choosing the right path depends entirely on your health, lifestyle, and financial priorities.
Best for flexibility and predictability: Original Medicare paired with a Medigap plan and a Part D plan.
This combination often appeals to:
- People with multiple specialists or chronic conditions. It provides the most financial protection against high medical bills, allowing a focus on care without worrying about network restrictions or high copays for each visit.
- Travelers and snowbirds. It offers coverage with any Medicare-accepting doctor in the U.S., plus some foreign travel emergency coverage with specific Medigap plans.
- People who value flexibility. You have complete freedom to choose any Medicare-accepting provider without referrals, authorizations, or network restrictions.
Best for lower premiums and bundled extras: Medicare Advantage
Medicare Advantage can work well for:
- People on a tight budget. Plans often feature low or $0 monthly premiums. This option can also be more cost-effective if you’re relatively healthy.
- People who want extra benefits. If you value having dental, vision, hearing, and drug coverage and prefer them bundled into a single plan, this option fits the bill.
- People comfortable with managed care. If you’re satisfied with a local network of doctors and the idea of referrals (found in some HMO plans) is familiar and acceptable, this could be a good choice.
When to enroll: Your critical windows
Your first enrollment choices can affect your future flexibility, especially with Medigap.
- Initial enrollment period: A 7-month window surrounding your 65th birthday in which you enroll in Parts A and B. Once enrolled in both parts, you can opt to replace original Medicare with Medicare Advantage. Unless you have other health care coverage, not enrolling during this period can result in lifelong premium penalties.
- Medigap open enrollment: A one-time 6-month period that starts once you’re 65+ and have enrolled in Part B. During this Medigap window, insurers must accept you, regardless of health. If you miss it, you may face higher premiums or be denied coverage altogether, depending on your state.
- Medicare Advantage annual enrollment: October 15 to December 7 each year, during which you can:
- Switch from original Medicare to a Medicare Advantage plan.
- Switch from a Medicare Advantage plan back to original Medicare (and add a Part D plan, but maybe not Medigap).
- Switch from one Medicare Advantage plan to another.
Medicare, Medicare Advantage, and Medigap: Understanding your coverage choices
Choosing between original Medicare, Medicare Advantage, and Medigap isn’t about finding a single best option; it’s about finding the one that fits your priorities. Each option offers a different balance of costs, provider access, and benefits, and understanding those tradeoffs is key. Knowing how the options work can help you make informed decisions and avoid costly mistakes. With the right information, you can choose coverage that supports your care needs with confidence.
