At 65, almost everyone on Medicare makes one choice that shapes their healthcare costs for the rest of their life: whether to fill the gaps in Original Medicare with a Medigap policy, or to replace Original Medicare with a Medicare Advantage plan.
The ads make it sound like a choice between paying a lot and paying nothing. It isn't. Both paths cost real money, at different times. Medigap charges you up front, through premiums, and then pays almost everything when you get sick. Medicare Advantage charges little or nothing up front and then shares costs with you as you use care, up to a yearly limit.
What the ads leave out is that the two choices aren't equally easy to reverse. Switching from Medigap to Medicare Advantage is simple. Switching back, in most states, requires answering health questions, and an insurer can say no. So the decision you make at 65 is often the one you live with at 80.
This guide covers how each path works, what each one cost in 2026, a worked example for a healthy year and a bad year, and the enrollment rules that decide whether you can change your mind later. If you're still sorting out Parts A, B, C and D and your sign-up windows, start with Medicare Enrollment Explained and come back.
What Original Medicare Leaves Uncovered
Both Medigap and Medicare Advantage exist because Original Medicare (Parts A and B) has no out-of-pocket limit. It pays most of the bill, but it leaves you the rest, with no cap:
| Original Medicare cost (2026) | What you owe |
|---|---|
| Part B premium | $202.90/month standard, more with IRMAA |
| Part A hospital deductible | $1,736 per benefit period. You can pay it more than once a year |
| Part B deductible | $283 per year |
| Part B coinsurance | 20% of the Medicare-approved amount, with no annual limit |
| Part B excess charges | Up to 15% above the approved amount, from doctors who don't accept assignment |
| Prescription drugs | Not covered. You need Part D |
That uncapped 20% is the real issue. Twenty percent of a routine year is small. Twenty percent of a year with chemotherapy, a joint replacement or dialysis can run into tens of thousands of dollars. Nobody should be on Original Medicare alone without a plan for that exposure, which is why nearly everyone picks one of the two roads below.
Road 1: Original Medicare + Medigap + Part D
Medigap (also called Medicare Supplement insurance) is a private policy that pays after Medicare. Medicare pays its share of an approved claim first, and Medigap pays some or all of what's left. You keep Original Medicare, which means:
- Any doctor or hospital in the country that accepts Medicare. No network, no referrals.
- No prior authorization from a private plan for services Medicare covers.
- Predictable costs. With the most complete plans, your yearly medical spending is close to your premium plus the Part B deductible.
Medigap doesn't cover prescription drugs, so you add a standalone Part D plan. It also doesn't cover dental, vision, hearing aids or long-term care.
The standardized plans
In 47 states, Medigap plans are standardized by letter. A Plan G from one insurer has exactly the same benefits as a Plan G from any other. The only differences between insurers are price, how the price rises over time, and customer service. (Massachusetts, Minnesota and Wisconsin use their own standardized designs.)
| Benefit | A | B | D | G | K | L | M | N |
|---|---|---|---|---|---|---|---|---|
| Part A coinsurance + hospital costs | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Part B coinsurance | ✓ | ✓ | ✓ | ✓ | 50% | 75% | ✓ | ✓* |
| Blood (first 3 pints) | ✓ | ✓ | ✓ | ✓ | 50% | 75% | ✓ | ✓ |
| Hospice coinsurance | ✓ | ✓ | ✓ | ✓ | 50% | 75% | ✓ | ✓ |
| Skilled nursing coinsurance | ✓ | ✓ | 50% | 75% | ✓ | ✓ | ||
| Part A deductible | ✓ | ✓ | ✓ | 50% | 75% | 50% | ✓ | |
| Part B deductible | ||||||||
| Part B excess charges | ✓ | |||||||
| Foreign travel emergency | 80% | 80% | 80% | 80% | ||||
| Out-of-pocket limit (2026) | $8,000 | $4,000 |
*Plan N pays Part B coinsurance except for a copay of up to $20 for some office visits and up to $50 for emergency room visits that don't lead to an inpatient admission.
Two plans are missing from that table on purpose. Plans C and F both cover the Part B deductible, and a 2015 law stopped them from being sold to anyone who became eligible for Medicare on or after January 1, 2020. If you were eligible before then, you can still buy them. Everyone else chooses from the plans above.
The three plans most people compare
- Plan G is the most complete plan available to new enrollees. Once you've paid the $283 Part B deductible, it covers every Medicare-approved cost for the rest of the year, including excess charges. For most people choosing Medigap, the question is whether anything is worth giving up to pay less than Plan G costs.
- Plan N costs less than G. In exchange you pay small copays (up to $20 per office visit, up to $50 per ER visit) and Part B excess charges. Excess charges are rare in states that prohibit or limit them, and most doctors accept assignment, so Plan N is a reasonable trade for people who are generally healthy.
- High-deductible Plan G, sold in some states, has the same benefits as Plan G after you pay a $2,950 deductible in 2026. Its premium is much lower. It's sometimes paired with savings built up elsewhere to cover that deductible.
How Medigap premiums rise
Because benefits are identical across insurers, the most important thing to compare is how the premium is set, not only what it costs this year:
- Community-rated: everyone pays the same premium regardless of age. Your premium rises with inflation, not birthdays.
- Issue-age-rated: priced on your age when you bought the policy. It doesn't rise because you get older, but it does rise with inflation.
- Attained-age-rated: priced on your current age, so it rises every year both from inflation and from aging. Often the cheapest at 65 and among the most expensive at 80.
A policy that looks cheap at 65 can become the expensive one by your late 70s. Ask each insurer which method it uses and what its rate increase history looks like.
Road 2: Medicare Advantage (Part C)
Medicare Advantage plans are run by private insurers that Medicare pays a fixed amount each month to cover your care. When you join one, the plan replaces Original Medicare as the way your Part A and Part B benefits are delivered. Most plans also include Part D drug coverage (an "MA-PD"), and many add benefits Original Medicare doesn't cover, such as routine dental, vision, hearing aids and fitness memberships.
Instead of Original Medicare's 20% coinsurance, you pay the plan's copays and coinsurance, for example a specialist copay, a daily copay during a hospital stay, or a percentage for some drugs and equipment. In exchange, every plan must have a yearly maximum out-of-pocket (MOOP) limit:
| 2026 Medicare Advantage limits | Federal maximum |
|---|---|
| In-network out-of-pocket limit | $9,250 |
| Combined in- and out-of-network limit (PPO plans) | $13,900 |
Plans can set lower limits, and many do. The limit covers Part A and Part B services only. Drug costs don't count toward it. They fall under the separate Part D out-of-pocket cap of $2,100 in 2026, which applies whether your drug coverage comes from a standalone Part D plan or is built into an Advantage plan.
The trade-offs
- Networks. HMO plans generally cover only in-network providers outside of emergencies, and usually need referrals for specialists. PPO plans pay for out-of-network care at higher cost-sharing. Networks can change from year to year, and a doctor in the network this year may not be in it next year.
- Prior authorization. Most Advantage plans require approval before covering certain services: hospital stays, skilled nursing, imaging, some drugs. Medigap has no equivalent, because Original Medicare makes the coverage decision.
- Geography. Plans are sold by county. Care far from home, apart from emergencies and urgent care, may be limited. People who spend winters in another state or travel a lot often find this harder than they expected.
- Annual changes. Premiums, copays, the MOOP, the drug formulary and the network can all change each January. Plans must send an Annual Notice of Change by September 30, and reading it every fall is worth the time.
- You still pay Part B. A "$0 premium" Advantage plan still requires the $202.90 Part B premium (plus IRMAA if your income is high). Some plans offer a Part B giveback that reduces it.
Side-by-Side Comparison
| Original Medicare + Medigap + Part D | Medicare Advantage | |
|---|---|---|
| Premiums | Part B + Medigap + Part D | Part B + plan premium (often $0) |
| Costs when you use care | Low to none (Plan G: Part B deductible only) | Copays and coinsurance |
| Medical out-of-pocket limit | No limit on Original Medicare alone. Plan G effectively caps it at the Part B deductible | Plan MOOP, up to $9,250 in-network |
| Drug out-of-pocket cap | $2,100 (Part D) | $2,100 (Part D) |
| Provider choice | Any provider accepting Medicare, nationwide | Plan network, usually by county |
| Referrals / prior authorization | No | Often |
| Dental, vision, hearing | Not included | Often included, with limits |
| Travel | Nationwide; Plans D, G, M, N cover some emergency care abroad | Emergencies and urgent care covered nationwide; routine care tied to network |
| Can change plans each year | Can switch Part D yearly; switching Medigap may require underwriting | Yes, during Open Enrollment |
| Hardest part to undo | Rarely an issue | Returning to Medigap later |
A Worked Example: A Healthy Year vs. a Bad Year
Premiums for both Medigap and Advantage plans vary a lot by state, county, age and insurer, so the figures below are illustrative assumptions, not quotes. The point of this example is the shape of the comparison, not exact prices for your ZIP code.
The assumptions, for a single 65-year-old in 2026:
- Road 1: Plan G at $150/month + a standalone Part D plan at $35/month.
- Road 2: A $0-premium Advantage plan with drug coverage and a $5,500 in-network out-of-pocket limit.
- Both roads pay the standard Part B premium of $202.90/month, or $2,434.80 for the year.
- Healthy year: a few doctor visits and lab work. The Advantage enrollee pays $400 in copays. The Plan G enrollee pays the Part B deductible.
- Bad year: a cancer diagnosis with surgery, a hospital stay and expensive drugs. Medical costs run into six figures, so both roads hit their limits, and both hit the $2,100 Part D cap.
| Total cost for the year | Plan G + Part D | Medicare Advantage |
|---|---|---|
| Part B premiums | $2,434.80 | $2,434.80 |
| Medigap premiums | $1,800.00 | — |
| Part D premiums | $420.00 | included |
| Healthy year: medical costs | $283.00 | $400.00 |
| Healthy year total | $4,937.80 | $2,834.80 |
| Bad year: medical costs | $283.00 | $5,500.00 |
| Bad year: drug costs | $2,100.00 | $2,100.00 |
| Bad year total | $7,037.80 | $10,034.80 |
In the healthy year, Medicare Advantage costs $2,103 less. In the bad year, Plan G costs $2,997 less. If the Advantage plan's limit were at the federal maximum of $9,250, the bad-year total would be $13,784.80, and the gap would grow to $6,747.
Read that way, Medicare Advantage is a bet that you'll stay healthy, and Medigap is insurance against the year you don't. Neither is wrong. But the table leaves out three things that often matter more than the dollars:
- A bad year often isn't a single year. A cancer, heart or kidney diagnosis can mean several years of treatment. Under Advantage, you can hit the out-of-pocket limit year after year. Under Plan G, your medical costs stay at the Part B deductible.
- The Medigap premium isn't fixed. On an attained-age policy, $150 at 65 may be well over $250 at 80. That narrows Advantage's healthy-year savings early on, and widens them later.
- The bad year is exactly when you'd want to switch, and it's exactly when you may not be able to. That's the next section.
The One-Way Door: Guaranteed Issue Rights
This is the most important and least understood part of the decision.
Your Medigap Open Enrollment Period
You get one Medigap Open Enrollment Period: six months that start the first month you're 65 or older and enrolled in Part B. During those six months, an insurer must sell you any Medigap policy it offers in your state, at its best available rate, no matter your health. It can't deny you, and it can't charge you more for a pre-existing condition. (If you had less than six months of prior creditable coverage, it may delay covering a pre-existing condition for up to six months.)
This window doesn't repeat. It isn't the fall Open Enrollment that runs every October 15 to December 7, and that fall period doesn't create a new Medigap right.
After the window closes
Outside your Medigap Open Enrollment Period, in most states, insurers can use medical underwriting. They can ask about your health, charge you more, or turn you down entirely. A recent cancer diagnosis, heart failure, COPD, diabetes with complications or a planned surgery can each be enough to be declined.
That's why moving between the two roads isn't symmetrical:
- Medigap → Advantage: easy. You can join an Advantage plan during the fall Open Enrollment Period with no health questions.
- Advantage → Medigap: you can always go back to Original Medicare, but getting a Medigap policy to go with it is not guaranteed. Without one, you're left with Original Medicare's uncapped 20%.
The scenario to plan around
A 65-year-old picks a $0-premium Advantage plan and spends seven healthy years in it. At 72, they're diagnosed with cancer, and the best treatment center for their condition is outside the plan's network. They can move back to Original Medicare at the next enrollment window, which gives them access to that center, but every Medigap insurer in their state can ask about the diagnosis and decline them. They end up either staying in the network or going onto Original Medicare with no cap on the 20%. The time to think about this is at 65, while every Medigap policy is still guaranteed to you.
The exceptions: when you do get a guaranteed right
Federal law gives you a guaranteed right to buy certain Medigap policies in a handful of situations. Two of them are designed for people trying Medicare Advantage:
- The trial right at 65. If you joined a Medicare Advantage plan when you were first eligible for Medicare at 65, and within the first 12 months you decide to leave it, you can buy any Medigap policy sold in your state without underwriting.
- The trial right after dropping Medigap. If you dropped a Medigap policy to join an Advantage plan for the first time, and you leave within 12 months, you can get your old policy back if the same insurer still sells it. If it doesn't, you can choose from a set list of other plans.
Other guaranteed issue situations include your Advantage plan leaving your area or Medicare, moving out of your plan's service area, or losing employer or union retiree coverage that paid after Medicare. In most cases you must apply within 63 days of losing the old coverage.
Some states go further than federal law:
- New York and Connecticut require insurers to sell Medigap year-round regardless of health.
- A growing number of states, including California, Oregon, Illinois and Kentucky, have a birthday rule or anniversary rule: a short window each year to switch to a Medigap plan with equal or lesser benefits without underwriting. These rules usually require that you already have a Medigap policy, so they help Medigap enrollees change plans rather than Advantage enrollees switch over.
State rules change often. Check with your State Health Insurance Assistance Program (SHIP) or your state insurance department before relying on one.
Who Each Road Tends to Fit
There's no universally right answer, but patterns show up.
Original Medicare + Medigap often fits people who:
- Have a chronic condition now, or a family history that makes one likely
- Want a specific specialist or academic medical center, or want any provider who accepts Medicare
- Split the year between two states, or travel a lot within the U.S.
- Prefer a predictable, budgetable cost and hate surprise bills
- Can comfortably afford the premium now and as it rises
Medicare Advantage often fits people who:
- Are healthy, and comfortable with the risk that a bad year costs up to the plan's limit
- Already use doctors and hospitals in a strong local plan's network
- Want dental, vision and hearing benefits bundled in
- Need the lowest possible monthly premium for their budget to work
- Live in one place year-round
And a few situations where the usual logic changes:
- Employer or union retiree coverage. If a former employer offers retiree coverage, often a group Advantage plan, compare it carefully. Dropping it may be permanent.
- Medicaid and Medicare together ("dual eligible"). A Dual Special Needs Plan or Medicaid's cost-sharing help often makes Medigap unnecessary.
- Under 65 on Medicare due to disability. Federal Medigap rights at 65 don't cover you, and only some states require insurers to sell to people under 65. Many people in this situation get a new Medigap Open Enrollment Period when they turn 65.
How Your Retirement Income Plan Affects the Choice
The Medigap vs. Advantage decision is usually treated as a health insurance choice, but it's also a cash flow choice, and it interacts with the rest of your plan:
- IRMAA applies on both roads. Higher-income retirees pay surcharges on Part B and Part D premiums whether they're on Medigap or Advantage. A Roth conversion or a home sale at 63 can raise both at 65. See IRMAA Explained.
- Medigap is a fixed cost; Advantage is a variable one. A retiree whose guaranteed income (Social Security, pension, annuities) covers a higher fixed premium may prefer Medigap's predictability. A retiree drawing from a portfolio may need to keep a reserve for an Advantage plan's out-of-pocket limit, ideally in cash or bonds rather than stocks that may be down in the same year the bill arrives.
- HSA money can pay some premiums, but not Medigap's. Part B, Part D and Advantage premiums are qualified HSA expenses. Medigap premiums are not. See HSAs in Retirement.
- Neither road covers long-term care. Custodial care in a nursing home or at home is a separate risk. See Long-Term Care Planning.
A Checklist Before You Choose
- List your doctors, hospitals and prescriptions. Check each against any Advantage plan's network and formulary, and check that your doctors accept Medicare assignment.
- Find out when your Medigap Open Enrollment Period starts and ends. It's six months from the first month you're 65 and have Part B. Put the end date on your calendar.
- Price Plan G and Plan N from several insurers, and ask each one how it sets premiums (community, issue-age or attained-age) and what its recent rate increases were.
- Look up each Advantage plan's out-of-pocket limit, not just its premium. Then ask whether you could pay that amount in a bad year, and in two bad years in a row.
- Check your state's rules. Is there year-round guaranteed issue, a birthday rule, or Medigap for people under 65?
- Decide what you'd do in a bad year at 75. If the answer is "switch to Medigap," know that you may not be able to.
- Get free, unbiased help. Every state has a SHIP counselor who doesn't sell insurance and can compare plans with you.
The Bottom Line
Medigap and Medicare Advantage aren't a cheap option and an expensive option. They're two ways of paying for the same care. Medigap costs more each month and protects you in the years you're sick. Medicare Advantage costs less each month and asks you to share the cost of being sick, up to a limit.
The asymmetry is what turns this into a lifetime decision. At 65, during your Medigap Open Enrollment Period, every option is open to you. After it, the road toward Medigap can close. If you're leaning toward Medicare Advantage, make that choice knowing what returning would take. If you're unsure, the 12-month trial right gives you a year to find out. Because Medicare premiums, IRMAA, where your retirement income comes from and your health all affect each other, it's worth reviewing this choice with a financial professional as part of the whole plan.
This article is for educational purposes only and does not constitute insurance, tax, legal or medical advice. Medicare premiums, deductibles, out-of-pocket limits, plan availability and state Medigap rules change every year and depend on where you live. The cost example uses illustrative premiums, not quotes. Confirm current figures at Medicare.gov, talk to your State Health Insurance Assistance Program (SHIP), and consult a licensed Medicare or financial professional before choosing coverage.