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 Supplement plans and Medicare Advantage plans. Medigap Plan G offers the most coverage of all the supplement plans, providing an excellent example to compare against Medicare Advantage plans.

Medigap Plan G vs. Medicare Advantage: Differences in Network Access

Medicare Advantage plans differ substantially from Medigap Plan G with regard to 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 who have 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 provider/facility access. Medigap Plan G does not use a network system like Medicare Advantage plans. Instead, it allows members to visit any healthcare provider that accepts Medicare. This 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

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

Here are some 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 for various services before insurance begins its coverage, while Plan G only requires the Medicare Part B deductible to be satisfied.
  • Copays & Coinsurance: With Medicare Advantage plans, copays 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 copays, 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 Medicare 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 above your Part B cost. 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 critical care people seek out insurance to cover.

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 does. 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 the insurance company increasing the price due to a health condition.

However, beneficiaries may have opportunities to buy Plan G under certain circumstances, such as the following:

  • Anyone who enrolls in Medicare Advantage during their initial Medicare enrollment gets a 12 month window within which they may choose to drop their plan and switch to a Medicare supplement 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 can sometimes trigger a guaranteed issue right privilege.
  • 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 convenient opportunity to enroll in Medicare Advantage or a Medigap policy.

As with supplement plans, certain circumstances will trigger a Special Enrollment Period outside of the Open Enrollment Period. 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. It’s very helpful to speak with a local insurance agent about specific circumstances.

Bottom Line

Thankfully, people have a choice in the coverage they prefer. Medigap Plan G will 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 within a local 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.