Are Medicare Advantage plans the same as Medicare Supplements or Medigap plans?

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Category: Medicare Supplements or Medigap
Updated: Jul, 19 2024

No. Medicare Advantage plans are not the same as Medicare Supplements or Medigap policies. And here are a few key differences between the plans:

Medigap policy design

Medicare Supplements (also called Medigap policies) work together with your Original Medicare, filling the “gaps” (deductibles and copayments) in your Medicare Part A (in-patient or hospital insurance) and Medicare Part B (out-patient or physician insurance) coverage. In short, Medicare Supplements provide coverage in addition to your Original Medicare Part A and Part B coverage.
Medicare Advantage plan design

Medicare Advantage plans administer your Original Medicare Part A and Part B coverage. Medicare Advantage plans must offer coverage at least as good as your Original Medicare and often add additional benefits like (limited) vision, dental, hearing and/or wellness programs (such as Silver Sneakers).
Standardized Medigap plans

Medicare Supplements are standardized across most of the country (Plans E, H, I, or J still exist, but are no longer available to new beneficiaries). Example: If your friend has a Medicare Supplement Plan C in Ohio and you have Plan C in Florida - your plans provide the same Medicare Supplement coverage, although you may pay a different monthly premium for your Medicare Supplement as compared to your friend in Ohio. Please note that some states do not offer the same variations of Medicare Supplement plans that are not offered across the country (for instance, in Massachusetts, Minnesota, and Wisconsin).
Non-standardized Medicare Advantage plans

Medicare Advantage plans are not standardized and can vary from company to company and county to county. Example: If your friend has a Medicare Advantage plan from Company AAA in Summit County, Ohio and you have Medicare Advantage plan from Company BBB in neighboring Portage County, Ohio - the plans may not provide the same coverage - and you may pay different monthly premiums. Medicare Advantage plans can be in the form of a Health Maintenance Organizations (HMO), Preferred Provider Organizations (PPO), Private Fee-for‑Service (PFFS) plan, Medicare Advantage Special Needs (SNP) plan, and Medicare Medical Savings Account (MSA) plan.
Cost-sharing

Medicare Advantage plan benefits are also often presented in terms of copayments ($XX per night in the hospital) as compared to coinsurance (15% of the cost per night in hospital). Medicare Supplements typically pay the balance beyond Original Medicare Part A and Part B coverage.

2020 Changes in Medigap Plan C and Plan F

As part of the Medicare Access and CHIP Reauthorization Act of 2015, starting in 2020, Medigap plans that cover the Medicare Part B deductible (Plan C and Plan F) will no longer be sold. Current Medigap members can keep their Plan C or Plan F policies, but can expect increasing monthly premiums as plan healthcare costs rise without the addition of new, healthier plan members. With the outlook of increasing premiums, some people are expected to move to more affordable Medicare Supplement plans. For example, we expect people with Plan F to move to the similar Plan G (with slightly lower premium) and if the person stays with the same Medicare Supplement carrier, there should be no medical underwriting as Plan G offers less coverage (the Part B deductible) than the Plan F.

Note: Please see the article below for important changes to Medigap plans:
» I learned that no Medicare Supplement Plan F can be sold after 2020. If I am already enrolled in a Plan F, will I be able to keep my Medigap Plan F beyond 2020?
Monthly plan premiums

Medicare Supplement premiums may cost several hundred dollars per month whereas Medicare Advantage plans may cost from $0 to several hundred dollars per month. And some Medicare Advantage plans have a $0 premium and actually pay you back a portion of your Medicare Part B premium. These Medicare Advantage plans may be defined as "Giveback" or "Dividend" plans and rebate all or a portion of your Medicare Part B premium. Unfortunately, Medicare Advantage plans that do not charge a premium ($0) and rebate your Medicare Part B premium are only available in certain in areas of the country, but can be found in some parts of Florida, Texas, and other population-dense areas across the country.

Medicare Advantage plans with Drug Coverage

Medicare Advantage plans can include your Medicare Part D prescription drug coverage (also called MAPDs) and still have a $0 monthly premium - and may have a $0 prescription drug deductible ($0/$0 plans) - and provide a Medicare Part B premium Giveback feature.

Medigap plans with Drug Coverage

Medicare Supplements available after 2006 do not offer prescription drug coverage and you will need to join a stand-alone Medicare Part D prescription drug plan to get these benefits. Some Medicare Supplement policies providing prescription coverage still exist, but they are no longer available for new beneficiaries. Medigap policies H, I, and J provided limited prescription drug coverage from 1992-2005 and people enrolled in these plans may continue to use them.

However, current members of such Medigap plans should ensure that the plans provide creditable prescription coverage to avoid any future late-enrollment penalties should they ever decide to join a Medicare Part D plan. As noted by CMS: "If you bought your Medigap Plan J before January 1, 2006, and it still covers prescription drugs, you would also pay a separate deductible ($250 per year) for prescription drugs covered by the Medigap policy."

Medical Underwriting / Health Questions

Since the 2021 plan year, you can join a Medicare Advantage plan without any medical underwriting or medical exam or health related question. From 2006 through 2020, a Medicare beneficiary could not have End-Stage Renal Disease (ESRD) and join a Medicare Advantage plan - unless the Medicare Advantage plan was a Special Needs Plan designed for people who suffer from kidney failure (C-SNP). Now a Medicare beneficiary with ESRD can join any Medicare Advantage plan in their area. (This new rule also applies to employer/union Medicare plans (EGHP); but, depending on your state, may not include Medicare Advantage Dual-Eligible Special Needs Plans (D-SNPs) and Medicare-Medicaid Plans (MMPs). Learn more about joining a Medicare Advantage plan if you have ESRD.

In other words, since 2021, if you have Medicare Part A and Medicare Part B and live in the plan's Service Area, Medicare Advantage plans are guaranteed issue - with no health questions asked. In addition, some Medicare Advantage Special Needs Plans (SNP) may have other health or financial restrictions depending on the plan (for instance, some Medicare Advantage plans require that you are qualified for both Medicare and Medicaid (D-SNP) or you may need to have the chronic health condition (such as a C-SNP for diabetes or heart condition) in order to join a specific Medicare Advantage SNP - so a C-SNP will verify that you have the chronic health condition for which the SNP was designed.
Guaranteed Issue Rights

In most states, Medicare Supplements are only guaranteed issue during your Medigap Open Enrollment Period. If you did not join a Medicare Supplement when you first became eligible for Medicare (up to 6 months after Medicare eligibility - over 65 and enrolled in Medicare B), depending on where you live, you may be subject to medical underwriting and, depending on your health, pay a higher monthly premium for your Medicare Supplement or be denied coverage.

Reminder: your Medigap Open Enrollment Period is for 6 months, beginning on the first day of the month in which you are both 65 or older and enrolled in Medicare Part B. Please note that some states have additional Open Enrollment Periods including those for people under 65.

Guaranteed Renewable

Modern Medicare Supplements (Medigap policies issued after 1992) are guaranteed renewable - no matter what changes in your health (An insurance company can drop you if you do not pay your premium, lied on your Medigap application, or the company is bankrupt or insolvent). In general, Medicare Advantage plans are guaranteed renewable year-to-year (except when you no longer have the "need" and you are in a Special Needs Plan) - assuming the plan is still being offered in the Service Area. A Medicare Advantage plan renews its contract each year with the federal government and often specific plans (or plans in specific areas) may be discontinued at the end of a coverage year.
Term of Coverage

A Medicare Supplement continues from year-to-year and may raise premiums over time based on the expenses of the plan members (when premiums no longer cover healthcare costs). A Medicare Advantage plan is for only one calendar year and can change plan features and premiums each year.
Premium Increases or Changes

Medicare Supplement monthly premiums can change every year or twice a year and vary by state (subject to State Insurance Commission approval). Medicare Advantage Plan monthly premiums and coverage benefits can change once a year and vary by county (subject to Federal Medicare guidelines and approval).

Choice of Healthcare Providers

Medicare Supplements usually allow you to choose your own doctors and hospitals - and may provide some healthcare coverage for international travel. Medicare Advantage plans most often have a fixed health care network of doctors and hospitals. If you have a Medicare Advantage plan with a health care network, you may pay a higher cost to visit a doctor or hospital outside of the network - or you may need to pay the entire cost yourself - and out-of-network costs may not impact your maximum out-of-pocket (MOOP) limits.
Out-of-pocket Limits

Medicare Advantage plans offer a maximum out-of-pocket limit (MOOP) for Medicare Part A and Medicare Part B coverage - and this means that your plan's allowable Part A and Part B out-of-pocket expenses are capped at this level. A Medicare Advantage plan can change MOOP limits each year, but not exceed the maximum annual limit - that can also change each year. For example, the statutory maximum MOOP is $8,850 in 2024 (and $9,350 for 2025) for in-network Part A and Part B services (covered by your plan) - and your MOOP can be higher (or excluded) for out-of-network care.

Medigap Plan K and Plan L (where available) also provide for out-of-pocket limits ($7,060 and $3,530 in 2024, respectively). Medigap Plan K and Plan L out-of-pocket limits can also change every year, for example, in 2010, the out-of-pocket limit was $4,620 for plan K and $2,310 for Plan L.

Can you combine a Medigap plan with Medicare Advantage plan?

No. It is illegal for anyone to sell you a Medigap policy if they know you are enrolled in a Medicare Advantage plan unless your coverage under the Medicare Advantage plan ends before the effective date of the Medigap policy.

If you already have a Medicare Supplement, you can, in theory, join a Medicare Advantage plan, but the two plans will not work together - and you would be wasting the monthly MA premium (if any). Ideally, if you are enrolled in a Medicare Supplement and wish to join a Medicare Advantage plan, you should coordinate the end of your Med Supp to coincide with the start of your Medicare Advantage plan so that you have continuity of coverage (no gaps in your healthcare insurance).
Trial Rights: Moving from a Medicare Supplement -- to a Medicare Advantage plan -- and then back to your Medicare Supplement

Many people decide to move from a Medicare Supplement to a Medicare Advantage plan to save on increasing monthly premiums (and the separate cost of a stand-alone Medicare Part D drug plan (PDP)). But some people who move to a Medicare Advantage plan find the healthcare network rather restrictive and wish to move back to their Med Supp within the first year.

The good news: If you were enrolled in a Medicare Supplement and, for the first time, decide to join a Medicare Advantage plan - and then find that you do not like the new Medicare Advantage plan, you have a guaranteed issue “trial right” to leave the Medicare Advantage plan within the first 12 months (using a Special Enrollment Period or SEP) and return to your original Medicare Supplement (if still offered by you company – or, if no longer offered, a similar plan that is offered by your Med Supp carrier).

In practice, there are actually two Trial Rights that are explained in our Frequently Asked Question “Do I have a trial right to leave my new Medicare Advantage plan within the first 12 months and return to my previous Medicare Supplement?”: or Q1FAQ.com/398 and this example is for the second Trial Right:

(#2) If you were enrolled in a Medicare Supplement and then leave your Medicare Supplement to join a Medicare Advantage plan, you will be granted a Special Enrollment Period to return to your Medigap plan (or other plan if no longer available) within the first 12 months of Medicare Advantage plan enrollment. And the Centers for Medicare and Medicaid Services (CMS) also notes:

"[If y]ou dropped a Medigap [or Medicare Supplement] policy to join a Medicare Advantage Plan (or to switch to a Medicare SELECT policy) for the first time, you’ve been in the plan less than a year, and you want to switch back - you have the right to buy [t]he Medigap policy you had before you joined the Medicare Advantage Plan or Medicare SELECT policy, if the same insurance company you had before still sells it."

So, if your former Medicare Supplement is no longer in existence, you will be permitted to join Medicare Supplement Plan A, B, C, F, K, or L. (Remember that Medigap Plan C and Plan F will no longer be accepting enrollments starting in 2020.)

[Sources include: Centers for Medicare and Medicaid Services, Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare, Publication 02110]