Medicare Advantage or Medicare Supplement? The Pros and Cons

Medicare Advantage vs Medicare Supplement 2019 Comparison |


There is a lot of information on the internet about Medicare Advantage and Medicare Supplement plans. That typically means there is some misinformation, too. I follow a lot of news sources on Medicare and read articles on the web. While gathering information for this article, the first two articles I ran across had glaring mistakes about what these two plans do.

I’ll get into those later, but the fact is that you need to learn about the programs and know what is best for you. You are the one to make the best decision for your situation. My goal here is to help educate and this article will be a little lengthy.

How Medicare Advantage Plans Are Structured

Medicare has a lot of co-payments and deductibles. It can be costly if you do not have insurance to fill the gaps – whether Medigap or Medicare Advantage. Medicare has four parts – A, B, C, and DPart A typically covers most of your confined care – such as hospital, home health care, hospice, and skilled nursing facilities. Then there is Part B which typically covers your physician and other healthcare providers’ services, as well as some preventative care. There are other items covered under each, but for the sake of simplicity that is the easiest way to remember the two parts of Medicare. Part D is prescription drug coverage.

Medicare Advantage replaces your Medicare Part A and Part B services – and most of the time your Part D as well – and combines them into one policy with a private insurance company. This is what is known as Part C of Medicare. If you have a Medicare Advantage plan, you do not even have to carry your Medicare card around with you – just the card that the insurance company provides. You must still pay the Part B premium (as you do with Medigap plans).

If you enroll in a Medicare Advantage plan, you are giving up your rights as a Medicare beneficiary and handing them over to an HMO.

How Medigap Plans Are Structured

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Medicare supplement plans do not replace your Medicare coverage under Part A and Part B. Instead, it covers the gaps in Part A and Part B that you would normally have to pay out of pocket if you have Medicare only. You can click here to see the cost information and deductibles on the website. The Medicare supplement plans do just what the name says – they supplement your Medicare coverage, filling in the gaps of coverage.

Medicare Advantage PROS


Medicare Advantage plans usually have lower premiums than Medicare supplements. There are many areas where Medicare Advantage plans have no monthly premiums at all – only co-pays and deductibles. This is one reason the MA plans have gotten so popular.

Part D Inclusion

Nearly 80% of the Medicare Advantage plans available have the Part D included at no additional charge as an option for coverage. By including your Part D coverage with the Medicare Advantage (MAPD), you can keep your monthly premium lower and have one insurance card on your person for Medicare and for prescription drugs.

All Coverage From One Provider

As I just mentioned in the last point, MAPD plans allow you to have all your insurance coverage from one insurance company.

Extra Services

Almost all MAPD plans also include extra services such as limited dental, vision, and gym memberships at no additional cost. These extra services may be limited, but they are included even with many of the no-premium plans available today.

Medicare Advantage CONS

Network Limitations

Medicare Advantage plans negotiate contracts with networks doctors, hospitals, and other healthcare providers. These networks are put in place in order to keep their costs low. This means that you must adhere to their networks or face substantially higher out of pocket costs. If you are in a HMO plan, you will be forced to pay all costs if you go out of network. Under a PPO plan, you would be faced with higher out of pocket cost-sharing. This has been an issue in some instances where patients went in for surgery thinking everything is fine with their network coverage only to receive a huge bill from an anesthesiologist who was actually not in the network, or a patient who receives care in an emergency room from a physician not in their network.

Most of the time, the networks cover certain geographic regions. So if you need care while traveling or visiting family, it could become a problem. Also, Medicare Advantage plans offer no coverage at all for travel outside of the United States.

Your Co-Pays, Deductibles, Physicians, Networks, and Plan Can Change From Year To Year

I mentioned above that 78% of beneficiaries have access to zero-premium plans in 2015. In 2014 – just one year earlier – that number was actually 86%. Medicare Advantage plans are not guaranteed renewable which means that your deductibles and co-pays are not set in stone – your plan coverage can change from year to year. Not only can it change, but your plan can go away completely or your physicians can be out of network from one year to the next. You could be forced to scramble to find a new insurance plan as happened with AARP plans in Florida recently.

Worse yet, your physicians can actually leave the network in the middle of the year. This could be especially bad if you are in the middle of treating a condition. As more cuts to the payments that the government send to the insurance companies for Medicare Advantage patients are expected, the insurance companies are responding by saying they will have to further reduce the size of their networks.

Fluctuating Annual Costs

If you maintain good health, you can expect your costs to be much lower because of the low premiums of the MAPD plans. Your out of pocket expenses could remain low if you aren’t going to the doctor often. However, one major health problem or accident could worsen the emotional and physical toll by also hitting your bank account to the tune of up to $8,300 – the out-of-pocket maximum for 2024. If you are out of network with your HMO plan you could be responsible for the entire the bill.. The uncertainty of what your healthcare expenses will be from year to year makes it difficult to budget for those expenses.

Chemotherapy treatments are treated as an outpatient procedure. This means with most plans you could face a 20% co-payment for chemo treatments. Our son went through a fight with cancer when he was 11 years old. I can tell you from experience those drugs are expensive. One particular drug was over $10,000 every time he took it.

You can see that at 20% co-payments, you could hit that $8,300 co-payment each year in a hurry. Cancer is not something you ever want to face. But being saddled with a lot of out of pocket costs on top of it could make it even worse. All you want to think about at that time is getting better, not having to worry about how you are going to pay for it.

Enrollment/Disenrollment Issues

Medicare Advantage plans and Part D prescription drug plans have only one window of opportunity each year for you to enroll. It happens from October 15 through December 7 each year. During that time, you can change plans or go from MAPD to original Medicare with a Medicare Supplement plan (or vice versa). There are Special Enrollment periods such as if you move in or out of your network coverage area. You have an Initial Enrollment Period three months before and three months after you first enroll in Part B of Medicare. Other than that, you cannot change plans or move back to original Medicare.

Medicare Supplement (Medigap) PROS

No Networks

With a Medigap plans, you can go to any doctor, any specialist, or any hospital anywhere in the United States as long as they accept Medicare. As of the end of 2013, less than 1% of doctors had formally withdrawn from the Medicare program (42% of those were psychiatrists). That equates to over 99% of US physicians taking Medicare payments for their services. There are no networks to keep up with.

Another benefit is that the most Medigap plans (C, D, F, G, M, and N) cover foreign travel emergency up to $50,000 for travel outside of the United States. Medicare Advantage has no coverage outside of the US.

Guaranteed Renewability

When you take a Medigap plan to supplement Medicare, the insurance company cannot change your coverage. They also cannot cancel your coverage unless you just don’t pay the premium. Even if Medicare quits offering your plan, your coverage will remain in force as long as you pay for it. I still have clients that are on the old Plan J that hasn’t been offered for sale since 2010.

The company also cannot raise your premium unless they do so for everyone on that plan in your state. So if you are diagnosed with a medical condition and have a lot of claims the insurance company cannot drop you. They also cannot raise your premiums because of it. And they can never single you out for a rate increase on a Medicare supplement plan.

Standardized Plans

Medicare Advantage plans that vary from company to company, year to year, or even from region to region. Medigap plans are identical from company to company. The Plan G you buy from Mutual of Omaha is identical to the Plan G from UnitedHealthcare or Aetna. So there is no confusion as to what your coverage is or what it might change to. The difference in premium between each company comes down to the claims they pay and the way they underwrite applicants.

No Claim Filing or Paperwork

All Medigap insurance companies offer electronic crossover filing with Medicare. This means that when your doctor or healthcare facility files with Medicare it electronically files automatically with your Medigap company. The company then pays the provider directly. Your doctor’s office does not even have to file with your insurance company. They simply file with Medicare and the rest is taken care of automatically. That means that you don’t have to keep up with any paperwork. It’s all automated for you and your doctor.

Easy To Budget Annual Costs

You won’t have any surprises with what your annual healthcare out of pocket costs are going to be with a Medigap plan. Medicare does not approve cosmetic procedures and limits skilled nursing care (neither does MAPD).

Medicare Supplement (Medigap) CONS

Higher Monthly Costs

You will have a monthly premium to pay each month with a Medicare supplement. Your costs may be higher on a Medigap plan if you rarely go to a doctor or seldom need healthcare. If you do run into a medical situation or currently have medical conditions that require a lot of care, the Medigap plan could come out substantially cheaper each year. That’s because the MAPD plans typically have a $8,300 maximum out of pocket. If you have a Plan G Medigap plan, the maximum annual out of pocket will be the annual Part B deductible unless you have non-approved services done (cosmetic, etc.) or if you stay in a hospital more than 455 consecutive days.

No Part D Prescription or Dental Coverage Included

If you have a Medigap plan, you will need a standalone prescription drug plan. You could also get a standalone policy that would cover dental, vision, and hearing services. However, both of these have an additional monthly cost associated with them. The standalone dental, vision, and hearing coverage is typically much better than you get under a MAPD plan.

Policies May Be Underwritten

You have an open enrollment period for getting a Medicare supplement from any company you choose. This period starts six months before you enroll in Part B of Medicare and the six months after. Medicare Advantage and Part D allow a 3-month open enrollment before and after your date of first coverage under Part B. You will likely have to be underwritten to get a Medigap plan once you are out of your Open Enrollment period.


There are many pros and cons to each program. Every situation is different. There is no one size fits all solution. You can give us a call to get more personalized service to better understand your individual options. There is no charge for our service.


The advice on this website is informational. Please consult an independent insurance professional before making a purchasing decision to determine what is best for your individual situation. You can contact Keith Murray at 888-228-6119.

Stanley Keith Murray is an independent agent and the founder of Integrity Senior Solutions Inc. He has over 21 years of experience working with Seniors to meet their insurance and financial needs.

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