Medicare Advantage vs. Medicare Supplement

Key Takeaways: Medicare Advantage vs. Medicare Supplement 💡

1. Is Medicare Advantage really “free”? The average monthly premium dropped to just $14 in 2026, but you pay through restricted networks, prior authorization hoops, and potential denial of care instead of dollars.

2. What does Medigap actually cost in 2026? Plan G — the most popular option — averages roughly $220 per month nationally, but ranges wildly from $167 in Texas to $449 in Florida depending on your carrier.

3. Which one has an out-of-pocket cap? Medicare Advantage caps in-network out-of-pocket costs at $9,250 in 2026. Original Medicare with Medigap has no formal cap, but your supplement covers almost everything after the Part B deductible of $283.

4. Can your doctor refuse your plan? With Medicare Advantage, absolutely — network restrictions apply. With Medigap, any doctor who accepts Medicare must accept your supplement. Nationwide. No exceptions.

5. Do Medicare Advantage plans deny necessary care? A Health Affairs study found initial claim denial rates of 17%, and the HHS Office of Inspector General confirmed that 13% of denied prior authorizations actually met Medicare’s own coverage rules.

6. Can you switch from Advantage to Medigap later? Technically yes, but you’ll likely face medical underwriting after your initial enrollment window. If your health has declined, you may be denied or charged significantly more.

7. Does Medigap cover prescriptions? No. You need a separate Part D plan, averaging $34.50 per month in 2026, on top of your supplement premium.

8. What happens to Advantage extra benefits in 2026? CMS has restricted certain supplemental benefits for chronically ill enrollees, trimming cosmetic procedures and some non-health-related perks that plans previously used as marketing bait.

9. Are Medigap premiums going up forever? Most carriers use attained-age pricing, meaning your premium climbs every single year as you age. Average costs jump from about $189 at age 65 to $238 by age 75.

10. Which plan is better for someone with serious health conditions? Medigap almost always wins here because there’s no prior authorization, no network limits, and no risk of care denial for covered services.

🏥 1. You’re Not Paying “$14 a Month” for Medicare Advantage — You’re Paying with Your Freedom to Choose

Every Medicare Advantage advertisement screams about low premiums, and technically, they’re not lying. The average monthly premium for Medicare Advantage plans dropped to $14 in 2026, down from $16.40 in 2025. Nearly 98% of beneficiaries have access to plans with no additional monthly premium beyond their Part B cost.

But here’s the catch nobody puts in the commercial. That bargain-basement premium comes with strings attached — specifically, provider networks that limit which doctors, hospitals, and specialists you can see without paying full price. These plans restrict participants to their provider lists and charge more, or even require full payment, for out-of-network services.

What does this mean in practice? If you’re diagnosed with a rare condition and the top specialist in your region doesn’t participate in your plan’s network, you either pay out of pocket, switch plans during a limited enrollment window, or settle for whoever is in-network. That’s not a hypothetical scenario — it’s a daily reality for millions of enrollees.

💡 Critical tip: If you travel frequently, live in a rural area, or have established relationships with specialists, the “free” Advantage premium could cost you far more in restricted access than a Medigap premium ever would.

📋 2. Prior Authorization Is Medicare Advantage’s Silent Gatekeeper — and It Denies More Care Than You Think

This is the part of the Medicare Advantage conversation that makes insurance lobbyists uncomfortable. Prior authorization — the requirement that your insurer approve a treatment before you receive it — has become one of the most contentious issues in American healthcare.

In 2024, nearly 53 million prior authorization requests were submitted to Medicare Advantage plans, and about 7.7% were denied. That percentage sounds small until you do the math: 4.1 million denials. A Health Affairs analysis covering 30% of the entire Medicare Advantage market found initial claim denial rates of 17%, with 57% of those ultimately overturned on appeal.

And the most disturbing finding? The HHS Office of Inspector General found that 13% of prior authorization denials actually met traditional Medicare’s clinical coverage rules — meaning those services would have been approved under Original Medicare.

Starting in 2026, CMS has implemented stricter timelines. Standard prior authorization requests must now be reviewed within 7 calendar days, expedited requests within 72 hours, and approved authorizations must remain valid for the entire course of treatment. Medicare Advantage insurers are also now required to publicly report data on prior authorization approvals, denials, and appeal outcomes.

With Medigap and Original Medicare? Prior authorization has historically been almost nonexistent. Original Medicare has traditionally required little in the way of pre-authorization for beneficiaries seeking services. However, there’s a new wrinkle: six states — New Jersey, Ohio, Oklahoma, Texas, Arizona, and Washington — launched a pilot program on January 1, 2026, testing prior authorization in Original Medicare for select services using AI-assisted review.

💡 Critical tip: If you’re currently in a Medicare Advantage plan and have had a prior authorization denied, appeal it immediately. The overturn rates are remarkably high, and most beneficiaries never bother — only about 1% of denials are appealed at the first level.

💸 3. Medigap Premiums Skyrocketed in 2025 — Here’s What 2026 Actually Looks Like State by State

Let’s address the elephant in the room for anyone considering Medicare Supplement insurance: the year 2025 brought some of the steepest Medigap rate hikes ever recorded, with premiums rising anywhere from 8% to as high as 50% depending on the carrier and state. That’s not a typo. Some retirees saw their monthly bill jump by half practically overnight.

So what does 2026 look like? The national average Medigap premium sits at about $189 per month at age 65, climbing to roughly $238 by age 75. But those averages mask enormous variation. A 65-year-old nonsmoker on Plan G in Texas might pay $167 per month with Cigna, while the same coverage in Florida could run $327 with Florida Blue or $449 with Aetna.

The Part B deductible — the one cost Plan G doesn’t cover — is $283 for 2026. The high-deductible version of Plan G requires you to pay $2,950 in Medicare-covered costs before the plan kicks in.

Here’s the pricing reality most articles gloss over: Medigap policies can be priced in three ways — community-rated, issue-age-rated, and attained-age-rated. Most carriers use attained-age pricing, which means your premium automatically increases every year simply because you got a year older, on top of any inflation-based adjustments. This is why a plan that looks affordable at 65 can feel crushing at 80.

💡 Critical tip: There can be big differences in the premiums that different insurance companies charge for the same standardized Medigap coverage. Always compare the same plan letter across at least five carriers. Identical Plan G coverage from two companies in the same zip code can differ by hundreds of dollars annually.

🏥 4. Medicare Advantage’s “Extra Benefits” Sound Amazing Until You Read the Restrictions

Dental, vision, hearing, gym memberships, meal delivery, transportation to appointments — Medicare Advantage plans love advertising these perks because Original Medicare doesn’t cover most of them. And the numbers back up the marketing: in 2026, 99% of individual Medicare Advantage plans offer some vision coverage, 98% offer dental, and 98% offer hearing benefits.

But here’s the part that gets buried in the fine print. The scope of these benefits varies wildly from plan to plan. A “dental benefit” might mean free cleanings and X-rays, or it might mean a $1,000 annual cap that barely covers a single crown. From year to year, plans may change the parameters of coverage, including increasing or decreasing annual maximums the plan will pay toward a benefit or adjusting cost sharing.

And for chronically ill enrollees who relied on expanded supplemental benefits? CMS has limited the types of allowable Special Supplemental Benefits for the Chronically Ill in 2026, removing certain cosmetic surgeries and procedures like facelifts and treatments for facial lines.

Meanwhile, Medigap plans offer zero supplemental benefits. No dental. No vision. No hearing. No gym membership. What they do offer is financial predictability — near-complete coverage of Original Medicare’s cost-sharing gaps, and the freedom to see any Medicare provider in the country without asking permission.

💡 Critical tip: Before choosing Medicare Advantage for the dental and vision perks, price out what those services would cost if you purchased separate standalone dental and vision insurance alongside a Medigap plan. In many cases, a $30-$50/month standalone dental plan gives you better coverage than what’s bundled into an Advantage plan with restrictive limits.

⚖️ 5. The “Medigap Trap” Is Real — And Waiting Too Long to Decide Could Lock You Out Forever

This is arguably the single most important — and least discussed — difference between Medicare Advantage and Medicare Supplement insurance. And it has nothing to do with premiums, benefits, or networks. It’s about timing.

When you first become eligible for Medicare, you enter a six-month Medigap Open Enrollment Period during which you can buy any Medigap policy sold in your state, regardless of any health problems. During this window, insurance companies cannot deny you coverage or charge you more because of pre-existing conditions.

Once that window closes? Everything changes. Unless you qualify for guaranteed issue rights, most carriers require health underwriting. If you’ve developed diabetes, had a cancer diagnosis, or accumulated any significant health history, you may be denied Medigap coverage entirely — or quoted a premium so high it’s essentially a denial.

Here’s the trap: millions of people choose Medicare Advantage at age 65 because the premiums are low and the extra benefits look appealing. Ten years later, when their health has changed and they’re frustrated with prior authorization denials and network restrictions, they try to switch to Medigap — and discover they can’t get a policy at any reasonable price, or at all.

Medicare Advantage, by contrast, has guaranteed issue during annual enrollment periods. You can switch between Advantage plans every year without medical underwriting. But moving from Advantage back to Original Medicare with a Medigap supplement? That one-way door may have already closed.

💡 Critical tip: If you’re turning 65 and leaning toward Medicare Advantage, consider at least enrolling in a Medigap plan during your open enrollment window and then switching to Advantage if you prefer. This preserves your guaranteed-issue rights in some states and ensures you’re never locked out of supplement coverage. Talk to a licensed broker about your state’s specific rules before making this irreversible decision.

🔬 6. The 2026 Part D Drug Changes Affect Both Paths — But One Side Gets Better Pharmacy Access

The cap on Part D out-of-pocket drug costs rose to $2,100 for 2026, giving every Medicare beneficiary a hard ceiling on annual prescription expenses. That applies whether you have standalone Part D with Original Medicare or drug coverage bundled into a Medicare Advantage plan. Negotiated prices on 10 high-cost drugs are expected to save beneficiaries an estimated $1.5 billion in 2026.

The average premium for standalone Part D plans decreased from $38.31 in 2025 to $34.50 in 2026, and for Advantage plans with drug coverage, the Part D portion dropped from $13.32 to $11.50.

Here’s where the paths diverge: Medicare Advantage plans with drug coverage use formularies that are specific to each plan, and they may require you to use network pharmacies. With standalone Part D paired with Original Medicare and Medigap, you typically have broader pharmacy access and can fill prescriptions at more locations without worrying about network restrictions.

The maximum Part D deductible in 2026 is set at $615, up from $590 in 2025. Not all plans charge the full deductible, and many Advantage plans roll drug coverage in with no additional deductible — but they control which drugs are covered and often require step therapy or prior authorization for expensive medications.

💡 Critical tip: Enrollees who participated in Part D’s prescription payment plan in 2025 were automatically re-enrolled for 2026 unless they opted out. If you switched plans, contact your new provider to re-enroll in the payment plan that spreads out-of-pocket costs across the year instead of hitting you all at once.

📊 7. The Real Cost Comparison When Everything Goes Wrong — A Hospital Stay That Changes Everything

Most comparison articles show you monthly premiums side by side and call it a day. But premiums only tell half the story. The real financial difference between Medicare Advantage and Medigap reveals itself when you actually need serious medical care.

The 2026 Part A hospital deductible is $1,736. Under Original Medicare alone, you’d pay that amount for each benefit period. With Medigap Plan G, your supplement covers that deductible entirely. Your only out-of-pocket responsibility is the $283 annual Part B deductible.

Under Medicare Advantage? The maximum out-of-pocket for in-network services in 2026 is $9,250, with a combined cap of $13,900 including out-of-network services. While that cap protects you from catastrophic costs, reaching it means you could spend nearly $10,000 in a single year before your plan covers everything at 100%.

Let’s model a worst-case scenario: a major surgery requiring hospitalization, specialist consultations, rehabilitation, and ongoing follow-up care.

💡 Critical tip: If you’re relatively healthy and rarely use medical services, Medicare Advantage’s low premiums create real savings. But if you have chronic conditions, anticipate surgery, or want absolute cost predictability, Medigap’s higher premiums buy you dramatically lower financial exposure when things go sideways. Run both scenarios with your actual health history before deciding.

🚨 8. Major Insurers Are Quietly Exiting Medicare Advantage Markets — And Your Plan Might Disappear

Here’s a development that doesn’t make it into the glossy enrollment brochures. Multiple insurers have pulled some Medicare Advantage plans from the market. Some major insurers have reduced the number of plans they’re offering for 2026, and enrollees are advised to check their Annual Notice of Change to see if reductions impact them.

This matters because Medicare Advantage plans aren’t permanent. Your specific plan — with its particular network, formulary, and benefit structure — can change dramatically from year to year, or disappear entirely. When that happens, you’re forced to pick a new plan, potentially with different doctors, different drug coverage, and different out-of-pocket costs.

Medigap policies, by contrast, are standardized by federal law. The benefits in each lettered plan are the same regardless of which insurance company sells it. Your Plan G from Company A covers exactly the same things as Plan G from Company B. And while carriers can certainly raise premiums or exit the market, your standardized benefits never change. If your carrier leaves, you can typically transfer to another carrier offering the same plan letter.

💡 Critical tip: For 2026, CMS created a temporary Special Enrollment Period allowing beneficiaries who enrolled in a Medicare Advantage plan through Medicare Plan Finder and later discovered their preferred provider wasn’t actually in-network to switch plans within three months. If this happened to you, act fast — this protection is only available for 2026.

🧠 9. The Question Nobody Asks: What Happens to Your Coverage If You Move, Travel, or Snowbird?

This is a dealbreaker hiding in plain sight. If you live in two states, travel frequently, or plan to relocate in retirement, the geographic flexibility of your Medicare coverage becomes critically important.

Medicare Advantage plans are almost exclusively regional. Your network of providers is tied to a specific service area. If you spend winters in Arizona and summers in Michigan, your Michigan-based Advantage plan may cover only emergency and urgent care in Arizona — leaving you without access to routine care, specialist visits, or prescription fulfillment at network pharmacies for months at a time.

Medigap plans do not have network limitations — any doctor or healthcare provider who accepts Original Medicare must accept your supplement. Whether you’re in rural Montana, downtown Manhattan, or visiting relatives across the country, your coverage works identically everywhere.

💡 Critical tip: If you’re a snowbird or frequent traveler and you’re locked into Medicare Advantage, look specifically for PPO-type Advantage plans that offer some out-of-network coverage. HMO plans — which represent the majority of Advantage enrollment — typically provide zero out-of-network benefits except for emergencies.

🎯 10. The Bottom Line: Who Should Choose Which — And the One Mistake That Costs Retirees Thousands

After analyzing every cost, restriction, benefit, and regulatory change for 2026, here’s the blunt assessment that most articles are too diplomatically polished to give you.

Choose Medicare Advantage if you’re healthy, budget-conscious, comfortable navigating prior authorization, don’t travel extensively, are satisfied with the doctors in your plan’s network, and want bundled dental/vision/hearing benefits without managing multiple policies.

Choose Medigap if you have chronic conditions or anticipate significant medical care, want absolute freedom to choose any Medicare provider, travel or live in multiple states, prioritize financial predictability over low premiums, and understand that the higher monthly cost is essentially insurance against catastrophic exposure.

The one mistake that costs retirees thousands: Choosing Medicare Advantage at 65 because it’s cheap, then trying to switch to Medigap at 72 when health problems make the Advantage limitations unbearable — only to discover that medical underwriting now makes Medigap unaffordable or unavailable. This irreversible timing trap affects hundreds of thousands of seniors every year, and almost no enrollment guide adequately warns about it.

💡 Final critical tip: Don’t let a single premium comparison chart make this decision for you. Map out your actual healthcare usage over the past three years — prescriptions, specialist visits, hospital stays, upcoming procedures — and run both scenarios with real numbers. The plan that saves you $150 a month in premiums could cost you $8,000 more when you actually need care. And always, always make your Medigap decision during your initial open enrollment window. That six-month clock starts ticking the day you turn 65 and enroll in Part B — and once it expires, you may never get those guaranteed-issue rights back.