Medicare Advantage vs. Medicare Supplement.

Medicare Advantage (Part C)

A Medicare Advantage plan is offered by a private insurance company and replaces the way Original Medicare pays your claims. You still have Medicare, but you get your Part A and Part B-covered services — and usually your Part D drug coverage — through the plan. Many plans add benefits Original Medicare doesn't cover, like dental, vision, hearing and a monthly allowance.

The trade-off: most plans use networks of doctors and hospitals. Staying in network keeps your costs down, and there's a yearly maximum out-of-pocket limit that caps what you'd pay for covered services.

Medicare Supplement (Medigap)

A Medicare Supplement policy works with Original Medicare, not instead of it. Original Medicare pays its share, and the Supplement helps pay some of the leftover costs like deductibles, coinsurance and copays. Plans are standardized by letter (for example, Plan G), so the same letter offers the same basic benefits regardless of the carrier.

The big advantage is freedom: because there's no network, you can see any doctor or hospital that accepts Medicare, anywhere in the country. You'll generally pay a higher monthly premium for that flexibility, and you'll need a separate Part D plan for prescription coverage.

A few important rules

• You can't have a Medicare Supplement and a Medicare Advantage plan at the same time.
• Neither replaces Part B — you must keep paying your Part B premium.
• Medigap policies are individual; they don't cover a spouse.
• The best time to buy a Medigap policy is your 6-month Medigap Open Enrollment Period after Part B starts.

Key differences at a glance