2 Big Reasons Retirees Choose Medigap Over Medicare Advantage

For a lot of Americans, reaching retirement and finally being eligible for Medicare feels like a well-deserved reward after so many years spent in the workforce. And it is. Although there are different qualifications for Medicare, 90% of the 69 million Americans enrolled in it are 65 or older, according to Centers for Medicare & Medicaid Services. But there are a lot of medical costs Medicare won't cover for seniors, and Original Medicare has no cap on how much you can pay out of pocket either, meaning even one hospital visit can incur steep bills. That's why over 90% of people enrolled in Medicare carry some form of supplemental insurance, while others switch out of Original Medicare entirely and go with a Medicare Advantage plan instead (via KFF).

Signing up for Medicare Advantage can certainly look appealing upfront. Many of these plans come with low monthly premiums and bundle some of the key coverage areas where Original Medicare is lacking, like dental, vision, and even hearing coverage. Still, choosing this option without reviewing others can quickly prove to be a Medicare plan mistake that retirees should avoid. There are multiple reasons seniors are increasingly opting to add Medigap (also known as Medicare Supplement Insurance) to an Original Medicare plan instead of getting Medicare Advantage. The choice largely comes down to two major reasons: greater ease of use and fewer administrative hurdles.

Whereas Medicare Advantage plans are forms of private insurance that are designed to replace Original Medicare, Medigap works directly alongside Medicare, making it extremely easy to use. It's still private insurance that can vary in cost between providers, but it's federally standardized to work seamlessly with your regular Medicare plan. To get Medigap, you have to be enrolled in both parts of Original Medicare (including Part A for hospital insurance and Part B for medical insurance), and all it does is help with expenses that are not covered by your main plan: deductibles, copayments, and coinsurance. When you receive healthcare, your Original Medicare pays its share of your bill first. Then Medigap kicks in to pay for remaining costs as per the specifics of your plan.

Because of this straightforward process, Medigap is often viewed as the option with fewer surprises. For comparison, Medicare Advantage works in place of Original Medicare rather than with it, and it revolves around covering specific health areas (like dental) rather than covering additional monetary expenses. Plus, despite often offering lower premiums, Medicare Advantage can come with more out-of-pocket expenses due to these lower upfront costs. While details vary depending on your location and the specific Medicare Advantage plan you choose, most require cost sharing (typically copayments and deductibles) on top of a monthly premium. In other words, Medigap supplemental coverage pads your Original Medicare for a smooth experience, while Medicare Advantage replaces it and may or may not cover your biggest financial pain points.

Another appealing aspect of adding Medigap to Original Medicare is that it can be used anywhere Medicare is accepted, and referrals are often not needed. Conversely, using Medicare Advantage often entails a bureaucratic headache. It works like a regular private insurance plan, meaning you're limited to a specific network of doctors, and, in many cases, you'll need to get a referral to see a specialist or get prior authorization to get coverage for certain treatments or medical supplies. And if you travel a lot? With Medigap, there are several plan options that provide emergency care coverage if you need it outside the U.S. Things are a little trickier in this area for Medicare Advantage, which doesn't offer any international coverage outright, though some plans may offer travel care reimbursements.

With all this in mind, it's important to reiterate that Medigap coverage focuses on covering excess costs excluded in your Original Medicare plan rather than providing extra perks or additional coverage for specific health areas, like vision and dental. If these areas are of high importance to you, consider Medicare Advantage or add supplemental coverage to your Medicare plan from private insurers. Either way, Medicare costs are expected to increase in 2026, so now's the time to review your coverage options carefully and decide what's best for you.