When you become eligible for Medicare, you face a fork in the road. One path is Original Medicare, Parts A and B, usually paired with a standalone Part D drug plan and a Medicare Supplement policy, often called Medigap. The other is Medicare Advantage, also known as Part C, where a private insurer approved by the Centers for Medicare & Medicaid Services (CMS) delivers your Part A and Part B benefits, usually with drug coverage built in. Both paths are legitimate, but they behave very differently.
How Original Medicare works
Part A covers inpatient hospital care, skilled nursing facility care after a qualifying hospital stay, hospice, and some home health care. Most people pay no premium for Part A because they or a spouse paid Medicare taxes for at least 40 quarters.
Part B covers doctor visits, outpatient care, preventive services, durable medical equipment, and many other services. It has a standard monthly premium set each year by CMS, with higher income-related amounts, known as IRMAA, for people with higher incomes. After the annual Part B deductible, you generally pay 20 percent coinsurance with no annual cap.
That lack of an out-of-pocket maximum is the key weakness of Original Medicare on its own. A cancer treatment or major surgery can produce large 20 percent bills. Medigap exists to fill those gaps.
How Medigap works
Medigap policies are sold by private insurers but are standardized by federal law. In most states, plans are labeled with letters such as A, B, D, G, K, L, M, and N, and a Plan G from one insurer has the same benefits as a Plan G from another. Only the price, customer service, and the insurer’s pricing method differ. Massachusetts, Minnesota, and Wisconsin standardize plans differently.
Plan F and Plan C, which cover the Part B deductible, are not available to people who became eligible for Medicare on or after January 1, 2020. For newer enrollees, Plan G is a popular choice because it covers nearly everything except the Part B deductible. Plan N has lower premiums but includes some copays for office and emergency visits.
With Original Medicare plus Medigap, you can see any doctor or hospital in the country that accepts Medicare, without referrals. That flexibility is valuable for people who travel, split time between states, or want access to specific academic medical centers.
The Medigap open enrollment window
Your Medigap open enrollment period lasts six months, starting the month you are both 65 or older and enrolled in Part B. During that window, insurers must sell you any Medigap policy they offer at their best available rate, regardless of health. After it ends, in most states insurers can use medical underwriting, which means they can deny you or charge more based on health conditions. A few states, including New York and Connecticut, offer broader guaranteed-issue rights, and several states have added annual or birthday-month switching rules.
This timing rule is why the decision at 65 matters so much. If you start with Medicare Advantage and later want Medigap, you may not be able to get it at a reasonable price.
How Medicare Advantage works
Medicare Advantage plans must cover everything Original Medicare covers, but they may use different rules, costs, and networks. Most are HMOs or PPOs. Many include Part D drug coverage and extras such as dental, vision, hearing, and fitness benefits. Many plans have low or zero premiums beyond your Part B premium.
Every Medicare Advantage plan must have an annual out-of-pocket maximum for in-network Part A and B services, which Original Medicare lacks. CMS sets the upper limit each year, and plans can choose lower limits.
The tradeoffs:
- Networks. HMOs generally require in-network providers and referrals. PPOs allow out-of-network care at higher cost.
- Prior authorization. Plans often require approval before certain services, tests, or drugs.
- Annual changes. Plans can change premiums, networks, copays, and drug lists each year. You must review the Annual Notice of Change every fall.
- Geographic limits. Coverage outside your service area is usually limited to emergencies and urgent care.
Comparing costs
Original Medicare plus Medigap usually means higher fixed monthly costs (Part B premium, Medigap premium, and Part D premium) but very predictable out-of-pocket costs. Medicare Advantage often means lower premiums but variable costs through copays and coinsurance, up to the plan’s maximum.
A useful exercise is to model two scenarios: a healthy year with only routine care and a bad year in which you reach the out-of-pocket maximum. If the bad-year Medicare Advantage cost would strain your budget, Medigap’s predictability may be worth the premium.
Prescription drug coverage
If you choose Original Medicare, you will usually add a standalone Part D plan. The Inflation Reduction Act capped annual out-of-pocket Part D drug costs starting in 2025, which significantly reduces worst-case drug spending for people with expensive medications. Compare plans with the Medicare Plan Finder on Medicare.gov using your exact drug list and pharmacy.
Enrollment periods to remember
- Initial Enrollment Period. Seven months around your 65th birthday.
- Annual Election Period. October 15 to December 7, when you can switch between Original Medicare and Medicare Advantage or change Part D plans.
- Medicare Advantage Open Enrollment Period. January 1 to March 31, when Medicare Advantage enrollees can switch to another plan or return to Original Medicare.
Free, unbiased counseling is available through your State Health Insurance Assistance Program (SHIP).
Questions to ask yourself before choosing
- Do I travel or live in more than one state? Original Medicare with Medigap works anywhere in the US with providers that accept Medicare. Most Medicare Advantage plans are local.
- Do I have specific doctors I want to keep? Check each Medicare Advantage plan’s provider directory and call the offices to confirm.
- How do I feel about prior authorization? Some people prefer the predictability of Original Medicare, where prior authorization is far less common.
- What is my budget for fixed premiums? Medigap premiums can rise with age depending on how the insurer prices policies: community-rated, issue-age-rated, or attained-age-rated.
- Do extra benefits matter to me? Dental, vision, and hearing extras are attractive, but compare them with the cost of buying standalone coverage.
Watching out for aggressive marketing
Every fall, television ads and phone calls promote Medicare Advantage plans. CMS has rules governing how plans and third-party marketers may contact beneficiaries, and agents generally cannot make unsolicited calls or visit your home uninvited. Never give your Medicare number to someone who calls you unexpectedly. Use Medicare.gov’s Plan Finder or 1-800-MEDICARE to verify plan details.
Special situations
People who qualify for both Medicare and Medicaid, often called dual eligibles, may have access to Dual Eligible Special Needs Plans that coordinate both programs. People with certain chronic conditions may qualify for Chronic Condition Special Needs Plans. Those under 65 who qualify for Medicare because of disability face a different Medigap landscape, because federal law does not require insurers to sell Medigap to people under 65, though many states do.
Related reading: How State Minimum Auto Insurance Requirements Actually Work in the US.
Frequently Asked Questions
Can I have Medigap and Medicare Advantage together?
No. Medigap policies do not work with Medicare Advantage, and it is illegal for anyone to sell you a Medigap policy if they know you are enrolled in Medicare Advantage.
Is Medicare Advantage free?
Some plans have a $0 premium, but you still pay the Part B premium and any copays, coinsurance, and deductibles the plan charges.
What if I am still working at 65?
If you have coverage through an employer with 20 or more employees, you may be able to delay Part B without penalty. Your Medigap open enrollment window then starts when you enroll in Part B.
Can I switch from Medicare Advantage back to Original Medicare later?
Yes, during the Annual Election Period or the Medicare Advantage Open Enrollment Period. Buying Medigap at that point may require medical underwriting unless you have a trial right or state protection. People who joined Medicare Advantage when first eligible for Medicare and leave within 12 months generally have a guaranteed right to buy certain Medigap plans.
This article is for general informational purposes only and is not legal, medical, tax, or financial advice. Rules vary by state and change over time; confirm details with the relevant agency or a licensed professional.
