Medicare Basics
If you are getting close to 65, or you are already on Medicare and looking at your options, these two names come up constantly. They sound similar. They are not.
The confusion is understandable. Both are sold by private insurance companies. Both are meant to help with costs Original Medicare leaves behind. Both require you to be signed up for Medicare Parts A and B first. But they work in completely different ways, and picking one closes the door on the other in ways most people do not realize until later.
Here is the plain version.
First, What Original Medicare Leaves Behind
Original Medicare is Parts A and B. Part A covers inpatient hospital care. Part B covers doctor visits and outpatient care. Together they cover most medically necessary care, and for most people Part A costs nothing each month.
What they do not do is pay every dollar. You are responsible for:
- The Part A deductible each time you have a hospital stay (the amount you pay before coverage kicks in)
- The Part B deductible each year
- Coinsurance, usually 20% of the Medicare-approved cost of most Part B services, with no upper limit
- Prescription drugs, which Parts A and B mostly do not cover
- Routine dental, vision, and hearing care, which Original Medicare does not cover
That third one is the part people underestimate. Original Medicare has no annual out-of-pocket maximum. If you have a serious year, the 20% keeps going.
Both Medicare Advantage and Medicare Supplement exist to address that. They just do it from opposite directions.
What Is Medicare Advantage?
Medicare Advantage, also called Part C, is a way to get your Medicare benefits through a private plan instead of directly from the government. You stay enrolled in Medicare, and you keep paying your Part B premium, but the plan becomes how your care gets covered and paid for.
Medicare Advantage plans have to cover everything Original Medicare covers. Most also bundle in Part D prescription drug coverage, and many include extras Original Medicare does not offer, such as routine dental, vision, hearing, or fitness benefits. What extras are included, and how much they cover, is different in every plan.
Most Medicare Advantage plans are HMOs or PPOs, which means they use a provider network. An HMO generally expects you to stay in network except for emergencies, and may require a referral to see a specialist. A PPO usually lets you go out of network, but you pay more when you do.
Instead of paying most of your costs through a monthly premium, you pay as you go, through copays and coinsurance when you actually use care. Every Medicare Advantage plan has an annual out-of-pocket maximum for Medicare-covered services. Once you reach it, the plan covers those services for the rest of the year.
What Is Medicare Supplement (Medigap)?
Medicare Supplement, usually called Medigap, is not a replacement for Medicare. It is a second policy that sits behind Original Medicare and pays some or all of the costs Medicare leaves you.
You keep Original Medicare. Medicare pays first. Then your Medigap policy picks up its share of the deductibles, copays, and coinsurance, depending on which plan you bought.
Because there is no network, you can see any doctor or hospital in the country that accepts Medicare. Medigap follows Original Medicare's rules, so if Medicare covers the service, your Medigap plan works with it. There is generally no prior authorization to clear first.
Medigap plans are standardized by the federal government and labeled with letters: A, B, C, D, F, G, K, L, M, and N. Standardized means Plan G from one company covers exactly the same things as Plan G from another company. The difference between carriers is price and service, not benefits. Plans C and F are closed to people who became eligible for Medicare on or after January 1, 2020.
Two things Medigap does not do. It does not cover prescription drugs, so you would add a separate Part D plan. And it does not cover routine dental, vision, or hearing, so those would be separate too.
Side by Side
| Medicare Advantage (Part C) | Medicare Supplement (Medigap) | |
|---|---|---|
| How it works | Replaces how you receive Medicare benefits | Adds on to Original Medicare |
| Doctor choice | Usually a network, HMO or PPO | Any provider in the U.S. that accepts Medicare |
| Referrals and prior authorization | Often required, varies by plan | Generally not required |
| Monthly cost | Often lower premium, plus your Part B premium | Higher premium, plus your Part B premium |
| Cost when you use care | Copays and coinsurance as you go | Little to nothing, depending on plan letter |
| Annual out-of-pocket cap | Yes, every plan has one | No cap needed, the plan covers the cost sharing |
| Prescription drugs | Usually included | Not included, add a separate Part D plan |
| Dental, vision, hearing | Often included as extras | Not included |
| Coverage when traveling in the U.S. | Limited outside the service area | Works nationwide |
| Coverage abroad | Sometimes, for emergencies | Some plan letters include emergency travel coverage |
| Health questions to enroll | No, outside of rare exceptions | Sometimes yes, depending on when you apply |
The Six Differences That Matter Most
1. Where You Can Get Care
This is the biggest practical difference and the one people feel day to day. Medigap goes anywhere Medicare goes. Medicare Advantage generally works inside a network in your area.
If you split your year between Houston and somewhere else, or you have a specialist at a particular medical center you refuse to give up, this difference is not a detail. It is the decision.
2. When You Pay
Medigap front-loads your spending. You pay a higher premium every month, whether you see a doctor or not, and you rarely see a bill after that.
Medicare Advantage back-loads it. You pay less monthly and more when you use care, up to the plan's annual cap.
Same money, different timing. Which one is better depends on your budget and how much care you expect to need.
3. Whether Care Needs Approval First
Medicare Advantage plans can require prior authorization, meaning the plan reviews and approves certain services, tests, or procedures before they are covered. Original Medicare with a Medigap policy generally does not work that way.
For most routine care this never comes up. For a planned surgery, an imaging test, or a stay in a skilled nursing facility, it can.
4. Prescription Drugs
Most Medicare Advantage plans include Part D drug coverage in the plan. With Medigap, you buy a standalone Part D plan separately.
Either way, drug coverage should be checked against your actual medication list. Every Part D plan and every Medicare Advantage drug plan has its own formulary, which is the list of drugs it covers and what tier each one sits in. Two plans with similar premiums can treat the same prescription very differently.
5. Extra Benefits
Dental, vision, hearing, and fitness benefits are common in Medicare Advantage plans and generally not part of Medigap.
If those matter to you, that pulls toward Medicare Advantage. Just be careful about weighing extras too heavily against how the plan handles the medical care you are more likely to need.
6. How Hard It Is to Change Your Mind Later
This is the one that catches people, so read it twice.
Going from Medigap to Medicare Advantage is usually straightforward. You can make that switch during the Annual Enrollment Period, October 15 to December 7, and Medicare Advantage plans generally cannot turn you down for health reasons.
Going the other direction can be harder. Your Medigap Open Enrollment Period is the six months that start when you are 65 or older and enrolled in Part B. During that window, a Medigap company has to sell you a policy regardless of your health history. After it closes, in most situations a Medigap company can ask health questions and can charge you more or decline you altogether. That review is called medical underwriting.
There are exceptions, called guaranteed issue rights, and one is worth knowing about: if you joined a Medicare Advantage plan when you first became eligible for Medicare, you generally have a 12-month trial right to leave it and buy a Medigap policy without health questions. Texas is not one of the few states that gives you an annual guaranteed right to switch Medigap plans, so those windows matter here.
The practical takeaway is that the choice you make at 65 is not equally reversible in both directions. That is worth thinking about while you are healthy, because that is exactly when it is easiest to qualify.
Medicare Advantage: Pros and Cons
Pros
- Yearly cap on what you spend on Medicare-covered services
- Usually a lower monthly premium than Original Medicare plus Medigap plus Part D
- Medical, hospital, and usually drug coverage in one plan and one card
- Extras like dental, vision, and hearing are common
- You can generally join without answering health questions
- Two chances each year to change plans, during AEP and again January 1 to March 31
Cons
- Provider networks limit where you can go, and referrals may be required
- Prior authorization can apply to some services
- Costs land when you are using care, which is when other bills are already piling up
- Coverage is built around a service area, so extended travel is a weak spot
- Plan details, including networks and drug lists, can change from year to year, so it needs an annual look
Medicare Supplement: Pros and Cons
Pros
- Any provider in the country that takes Medicare
- Very predictable. You mostly know your yearly cost up front
- No network to check, and generally no prior authorization
- Benefits are standardized by plan letter, which makes comparing carriers simple
- Some plan letters cover emergency care during foreign travel
- The plan does not change under you each year the way plan networks and drug lists can
Cons
- Higher monthly premium, and premiums can rise as you age
- No prescription drug coverage, so a separate Part D plan is needed
- No routine dental, vision, or hearing
- Outside your open enrollment or a guaranteed issue right, you may face health questions
- Each policy covers one person, so a married couple needs two
The 2026 Medicare Numbers Worth Knowing
These are set by CMS and apply to everyone, not to any one plan. CMS updates them each fall.
- Standard Part B premium: $202.90 per month. Nearly everyone pays this, with either option. Higher-income households pay more.
- Part B deductible: $283 for the year
- Part A hospital deductible: $1,736 per benefit period
- Part B coinsurance: 20% of the Medicare-approved amount for most services, with no annual limit under Original Medicare alone
- Maximum Medicare Advantage out-of-pocket limit: $9,250 for in-network Medicare-covered services. Plans can set theirs lower.
- Part D out-of-pocket cap: $2,100 for covered prescriptions
What a specific plan costs you, on either side, depends on the plan. That is a conversation with your actual doctor list and medication list in front of you, not something a blog post can tell you.
So Which One Should You Pick?
There is no universally right answer, and anyone who tells you otherwise is selling something. But some patterns are common.
A Medicare Supplement plan tends to fit people who:
- Have doctors or a medical center they will not switch away from
- Travel often, spend part of the year in another state, or go abroad
- Have a chronic condition or expect a lot of care, and want costs to be predictable
- Can comfortably handle a higher fixed monthly premium
- Would rather deal with insurance once a year than think about it at every appointment
A Medicare Advantage plan tends to fit people who:
- Want a lower monthly cost and are comfortable paying copays as care happens
- Already use doctors who are in the plan's network
- Want dental, vision, hearing, or fitness benefits included
- Are staying in the Houston area for most of the year
- Like having one plan and one card for medical and drugs
Then there is the group nobody talks about. If you qualify for Medicaid alongside Medicare, or for a Medicare Savings Program, the math changes completely, and there are plan types built specifically for that situation. If money is tight, that is worth checking before you compare anything else.
Two Mistakes We See in Houston
- Choosing on premium alone.
- The monthly number is the easiest thing to compare and the least useful on its own. A lower premium with the wrong drug list or the wrong network can cost far more over a year than a higher premium that fits.
- Not checking the network against a real list of doctors.
- "Most doctors in Houston take it" is not the same as "my cardiologist at my medical center takes it." That takes five minutes to verify with names in hand, and it prevents the single most common regret.
Talk It Through With Someone Local
Reading about this only takes you so far. The decision comes down to your list of doctors, your list of medications, and your budget, and that is a conversation, not an article.
Clutch City Insurance is an independent agency in Houston. We are not tied to one insurance company, and we can walk you through both sides of this honestly, including telling you when the option we do not sell is the better fit for you. There is no cost and no obligation.
Call us at 713-870-5044, Monday through Friday, 8:30am to 5pm. Bring your doctors and your prescription list and we will go through it with you.
Our agents speak 17 languages, including Mandarin, Cantonese, Vietnamese, Spanish, Hindi, Urdu, Arabic, Korean, and ASL, so you can have this conversation in the language you are most comfortable in. If getting to our office on Westheimer is difficult, we can come to you.
You can also get free, unbiased Medicare counseling from your local State Health Insurance Assistance Program (SHIP), or call 1-800-MEDICARE.
Frequently Asked Questions (FAQ)
Can you have both Medicare Advantage and Medicare Supplement?
No. A Medigap policy cannot be used with a Medicare Advantage plan, and it is not legal for someone to sell you one if they know you have the other. You pick one path.
Is Medicare Advantage or Medicare Supplement better?
Neither is better across the board. Medigap gives you more freedom to choose providers and more predictable costs for a higher monthly premium. Medicare Advantage usually costs less monthly, often includes drug and extra benefits, and works within a network. The better one is whichever fits your doctors, medications, travel, and budget.
Does Medicare Supplement cover prescription drugs?
No. Medigap does not include drug coverage. If you go that route, you would enroll in a separate Part D plan. Skipping drug coverage entirely can lead to a late enrollment penalty that follows you.
Can I switch from Medicare Advantage to a Medicare Supplement plan later?
Sometimes, but it is not guaranteed. Outside of your Medigap Open Enrollment Period or a guaranteed issue right, a Medigap company can ask health questions and can decline you. One common exception is a 12-month trial right if you joined Medicare Advantage when you first became eligible.
Do I still pay my Part B premium either way?
Yes. With both Medicare Advantage and Medigap, you keep paying your Part B premium to Medicare, on top of whatever the plan itself costs.
When can I make a change?
The Annual Enrollment Period runs October 15 to December 7, with changes taking effect January 1. If you are already in a Medicare Advantage plan, the Medicare Advantage Open Enrollment Period from January 1 to March 31 gives you one more chance to change. Certain life events, such as moving or losing employer coverage, can open a Special Enrollment Period. Medigap works on its own timeline.
Disclaimer: This article is for general educational purposes and isn't a recommendation of any specific plan. Clutch City Insurance isn't affiliated with the U.S. government or the federal Medicare program. For a full list of your options, contact Medicare.gov, 1-800-MEDICARE, or your local State Health Insurance Assistance Program (SHIP).