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What Are the Differences Between Medigap and Medicare Advantage?

Posted by Seton McAndrews | CFP®, Vice President Investments
September 27, 2013

What is Medigap?

Medigap is private insurance you can purchase to help cover some or most of your out-of-pocket expenses associated with Traditional Medicare. It doesn’t replace your Traditional Medicare, it just helps you pay for it. You’d still get all of the coverage associated with Plans A and B.

What Does Medigap Cover?

The out-of-pocket expenses Medigap helps you pay for: Part A hospital deductibles, Part B outpatient co-pays, out-of-country medical emergencies, and fees not covered by Parts A and B.1

Why Do People Purchase Medigap?

People looking to reduce out-of-pocket healthcare costs are usually the ones to purchase Medigap. There are ten Medigap plan options, and all of them are standardized by law, so the benefits of each is the same regardless of which insurer sells it. The only difference between the ten plans is the cost (it can be expensive), so shopping around is crucial.2

What Are the Differences Between Medigap and Medicare Advantage?

Medicare Advantage is an alternative to Traditional Medicare, while Medigap is a supplement to it. As such, Medigap doesn’t replace Traditional Medicare like Medicare Advantage does.

Medigap also does not have any network associated with it, and is accepted anywhere you can use Traditional Medicare. By contrast, Medicare Advantage has a network associated with it, so the doctors that allow it can be more limited.3 The table below offers a good summary of the key differences:



Medicare Advantage

Typically more expensive

Typically less expensive

Offers additional coverage to Traditional Medicare

Usually offers the same coverage as Traditional Medicare, but may offer more like dental or vision

Larger network of doctors

Smaller network of Ddctors

Does not cover prescription drugs

May include prescription drug coverage


What’s Your Next Step in Choosing Healthcare Coverage in Retirement?

The above information, along with our posts on Medicare Part A and B and Medicare Parts C & D, should provide you with enough information to get started on making your choice for healthcare coverage in retirement.

One of your first steps from here will be to research some of the costs and coverage associated with Medicare Advantage and Medigap plans, to see if one might fit your needs and budget.

You can start researching Medicare Advantage plans on the Medicare website, by clicking here.

And you can start researching Medigap plans on the Medicare website, by clicking here.

Deciding which plan works for you can be a difficult process. Remember, WrapManager can help you build a comprehensive plan that will create a strategy for you throughout retirement. Call us today at 1-800-541-7774 to learn more.

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1 Medicare.gov

2 Centers for Medicare & Medicaid Services


4 Medicoverage

Medicare Healthcare in Retirement