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Medicare Advantage vs. Medicare Supplement Insurance Plans

Updated: March 20, 2023
By: Jonathan Trout
Jonathan Trout
Content Manager
Jonathan is a former product and content manager for Retirement Living. His background spans sales/marketing, finance, and telecommunications. Jonathan’s expertise in consumer wellness and research-backed data stories helped educate seniors on financial planning, retirement, and community resources. Jonathan graduated from Oklahoma State University with a B.S. in Environmental Sociology.
Content Manager
Edited by: Jeff Smith
Jeff Smith
Sr. Content Manager
As Retirement Living’s senior content manager, Jeff oversees the product and publishing of all retirement, investing, and consumer wellness content on the site. His extensive expertise in brand messaging and creating data-driven stories helps position Retirement Living as a top authority for senior content and community resources.
Sr. Content Manager

We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact or 1-800-MEDICARE (TTY users should call 1 (877) 486-2048) 24 hours a day, seven days a week to get information on all of your options.

Medicare, the multilayered federal health insurance program for people 65 or older, can be confusing. While Medicare Part A covers inpatient hospital stays, hospice care, skilled nursing facilities and some home health care services, Medicare Part B covers outpatient care, doctors’ services, preventive services and medical supplies. These come standard in every original Medicare plan.

Medicare Advantage, also known as Part C, is an alternative plan that adds extra benefits. Stand-alone prescription medication coverage, called Plan D, allows you to keep your original Medicare plan with the added benefit of covering the costs of your prescription medicines. However, as you may remember during your experiences with insurance while you were working, there are always other expenses to consider. Many people think Medicare covers all health care expenses, but this is not so. It does not cover some copays and fees.

Here are some examples of costs you may be responsible for when using Medicare for health care needs:

  • Your Medicare premium is your membership due to Medicare or your private insurance company in exchange for the coverage.

  • Most copayments are necessary for doctor’s visits, prescriptions, blood tests or X-rays.

  • Coinsurance, which is different from copayments, varies. Copayments are fixed, yet coinsurance is usually based on a percentage, say 20%, of the costs. For example, while Medicare may pay 80% of your procedure, the coinsurance, what you’re responsible for, would be the remaining 20% balance. Coinsurance costs can easily head into the thousands for complicated situations, such as surgeries.

  • Annual deductibles for medications.

  • Keep in mind there is always a “maximum out-of-pocket” limit for services covered by Medicare. After this limit is reached, your out-of-pocket expenses cease, however, this depends on the plan you’ve chosen.

Medicare Advantage Plans (Part C)

When it comes to copays and other out-of-pocket fees, Medicare Part C, also called Medicare Advantage Plans, are offered by private companies that contract with Medicare to provide not just Part A and Part B benefits, but also services not paid by original Medicare. Medicare Advantage Plans are provided by health maintenance organizations (HMOs), private fee-for-service plans, Medicare medical savings account plans and preferred provider organizations. Many Medicare Advantage Plans offer prescription drug coverage. Medicare Advantage Plans are best suited to individuals who are on a limited budget or those who would rather have a smaller premium in lieu of high out-of-pocket costs. Here are five things to consider when choosing a Medicare Advantage plan:

  1. Affordable: You might have a $0 premium, depending on your county and state.

  2. Extras: This plan may cover vision or dental – always ask specifically before purchasing.
  3. Keep more in your pocket: These plans have a maximum out-of-pocket limit.

  4. Medication coverage: Many plans include prescription coverage. Check to ensure your medications are listed as covered.

  5. New year may bring changes: A new year can bring changes. When it comes to Medicare Advantage, every year, you’ll need to ensure premiums, benefits and copayments remain in your comfort zone. The specifics of each plan depend on the insurance company and what it offers.

Medicare Supplement Insurance vs.
Medicare Advantage
  Medicare Supplement Insurance
Medicare Advantage
(Part C)
How it relates to Medicare Parts A & B Private supplemental coverage that pays all or most Part A & B out-of-pocket costs Private health plan; provides Part A and B benefits in place of original Medicare
Premium Averages $150-$200 per month; varies by age, health $0-$100 a month; all enrollees pay the same regardless of age, health history
Out-of-pocket costs Low to none (except for premium) In-network medical deductibles, copays up to $3,400-$6,700 a year, depending on plan
Doctor, hospital choices Any that participate in Medicare HMOs: Plan providers only PPOs: Any provider; out-of-network costs more
When you can buy First six months after you sign up for Part B and at least 65; you can be turned down or charged extra in most states after this period When you first enroll in both Medicare A and B; annually thereafter during open enrollment Oct.15-Dec.7
Part D (drug) coverage Not included Most plans include Part D
Quality info available No standardized ratings has star ratings, with higher stars being the best
Proof of coverage
  • Red, white, and blue Medicare card
  • Medigap Card
  • Part D card
Medicare Advantage card
Paperwork Little to none; usually automatically sends payment to providers after Medicare’s fulfillment Some, because you pay deductibles and copays directly to providers

*Info From Consumer Reports

Medicare Supplement Insurance Plans (Medigap)

Medicare supplement insurance plans are a different option for additional Medicare coverage. If you plan to keep your original Medicare insurance and pay your Part B premium, consider a Medicare supplement insurance plan instead to cover the “gaps” in traditional Medicare costs. Some plans even pay the Medicare Part A deductible, so it truly matters that you do your research before making a decision. Five things to consider when choosing a Medicare supplement insurance plan include the following:

  1. Guaranteed acceptance: As long as you purchase your Medicare supplement plan during the six-month period that begins the month you turn 65, you cannot be turned down for any reason. But that time period is special – after it expires, you may be turned down or your premiums may be more expensive.

  2. Ten standard plans from which to choose: Though the ones with the most coverage are the most expensive, the variety of choices means you control your costs. These plans are also standardized by law, regardless of your insurer, across most states.

  3. Protection from massive medical bills: Being sick is expensive. Even if you have Medicare, you may still end up owing a large percentage of costs to a medical provider. A Medicare supplement plan will pay most, if not all, of that percentage.

  4. Annual renewal: No matter the state of your health, once you have the Medicare supplement plan, it renews every year as long as you pay your premiums.

  5. Take it with you: Your policy goes where you go, which is especially important for seniors who travel, such as snowbirds and RVers.