Medigap Plan G vs. Medicare Advantage Plans

People who enroll in Medicare for the first time often feel bombarded with overwhelming choices. The most critical decision usually involves choosing between Medicare Supplements and Medicare Advantage. Medigap Plan G offers the most coverage of all the supplements, providing an excellent example to compete with Medicare Advantage plans.

Plan G Vs. Medicare Advantage: Differences In Network Access

Medicare Advantage plans and Medigap Plan G substantially differ regarding network access. Network access is the range of healthcare providers — such as hospitals, doctors, and specialists — that a plan member can visit for their healthcare needs.

  • Medicare Advantage plans: implement a network-based system using Health Maintenance Organizations (HMOs) or Preferred Provider Organizations (PPOs). These networks consist of healthcare providers with agreements with insurance companies to provide services at negotiated rates. Typically, members must get care from within the network, except for emergencies or rare, pre-approved instances.
  • Medigap Plan G: offers broader network access. Medigap Plan G does not use a network system, unlike Medicare Advantage plans. Instead, it allows members to visit any healthcare provider that accepts Medicare. This extensive reach means that Medigap Plan G members rarely have to worry about whether their chosen provider is within the network.

Cost Differences Between Medigap Plan G And Medicare Advantage

The cost is usually the most significant factor in deciding between Plan G and a Medicare Advantage plan.

Here are some of the differences:

  • Monthly Premiums: Medicare Advantage plans often have lower monthly premiums than Medigap Plan G. However, the latter typically provides more comprehensive coverage, making it cost-effective in the long run.
  • Deductibles: Medicare Advantage plans may require a deductible in various areas before insurance begins covering services, while Plan G only requires the Medicare Part B deductible to be satisfied.
  • Co-Pays & Coinsurance: With Medicare Advantage plans, co-pays for doctor visits, specialist consultations, and other services are often required. In contrast, Plan G covers the Medicare Part A and Part B coinsurance and copayments.
  • Out-of-Pocket Maximums:  Medicare Advantage plans have an out-of-pocket maximum that, once reached, allows the plan to cover 100% of all expenses, including co-pays, deductibles, and coinsurance. Medigap Plan G covers all Medicare expenses except for the Part B deductible.
  • Prescription Drug Coverage: Plan G does not cover prescription drugs, meaning beneficiaries must purchase separate Part D coverage. Meanwhile, some Medicare Advantage plans include prescription coverage, potentially reducing overall costs.
  • Extra Services: Some Medicare Advantage plans may offer additional services not covered by Medicare or Plan G, such as dental, vision, or wellness programs, which could lead to cost savings for those who need these services.

Cost-Sharing Differences Between Medigap Plan G And Medicare Advantage

Medicare Advantage plans may have little to no extra premiums. However, they ask members to share costs by charging various copays and deductibles. Low-priced plans often offer low copays or deductibles for routine healthcare. However, that amount tends to increase sharply for more specialized and expensive treatments, precisely the kind of pricey care people truly need insurance for.

Plan G is designed to bridge the difference between Original Medicare coverage and the cost of almost every covered service. Although a Medicare Supplement plan may seem more expensive than a Medicare Advantage plan, it offers more comprehensive healthcare coverage, proving more cost-effective in the long run.

Note that Medicare supplements don’t cover routine prescriptions. For these, a Medicare beneficiary usually must pair their Medigap plan with a Medicare Part D plan.

Switching From Medicare Advantage To Medigap Plan G

Medicare Supplement insurance doesn’t restrict enrollment to certain times of the year, like Medicare Advantage. However, after a beneficiary’s Initial Enrollment Period ends, Medicare recipients may lose their Guaranteed Issue Right to enroll in any policy. Thus, applicants could risk their application being denied or increasing the price because of a health condition.

However, beneficiaries may have opportunities to buy Plan G under certain circumstances.

For example:

  • Anybody who enrolled in Medicare Advantage during their initial Medicare enrollment gets 12 months to choose to drop their plan and switch to Medicare supplements with a Guaranteed Issue right.
  • People who lost a Medicare Advantage plan for a reason they could not control may also gain a Special Enrollment Period.
  • Moving out of a plan’s service area might trigger a Guaranteed Issue Right.
  • Some states offer their residents additional protection. Check with a local insurance agent to inquire about specific circumstances.

When To Switch From Plan G To Medicare Advantage

Some beneficiaries would benefit more from a Medicare Advantage plan because of the lower premiums and access to potential added benefits like prescription coverage, dental, vision, hearing, and even gym membership. Each autumn, the government has an open enrollment period for all beneficiaries. This period offers a great time to enroll in Medicare Advantage or a Medigap policy.

As with supplements, certain circumstances will trigger a Special Enrollment Period outside of Open Enrollment. Some examples include moving out of a service area or having a plan close coverage. Of course, all Medicare beneficiaries can enroll in Medicare Advantage during their Initial Enrollment Period when they turn 65. Speak with a local insurance agent about specific circumstances.

Bottom Line

On the positive side, it’s good that people have a choice in the coverage they prefer. Medigap Plan G will probably suit those who prefer predictable healthcare costs, don’t have access to a strong network, or plan to travel a lot. On the other hand, Medicare Advantage plans usually offer much lower premiums and can help control costs for people who can get satisfactory healthcare from the network.

Sources: Medicare.govNCOAAARP


Mark Prip

Since 2003, Mark Prip has been leading  Policy Guide, Inc., providing knowledgeable information about Medicare, life insurance, and dental coverage to clients in over forty states. With his unparalleled hands-on experience aiding countless Medicare beneficiaries in selecting an appropriate health plan, he is a prime example amongst other competitors for expertise and assistance. Mark has held his Florida Health & Life Insurance License (E051889) since 2003. View his license profile on the Florida Department of Insurance website.