What Original Medicare Covers

Original Medicare is made up of Part A and Part B. Part A covers inpatient hospital care and is usually free if you’ve worked at least 10 years (40 quarters). Part B covers outpatient care, and in 2025 the average premium is $185 per month. But here’s the most important detail: Original Medicare only covers about 80% of your costs. You’re responsible for the other 20% with no out-of-pocket maximum. That’s why supplemental plans exist.

What Supplemental Plans (Medigap) Do

Supplemental plans like Plan G and Plan N fill in the gaps left by Medicare. These plans are standardized by the government, meaning Plan G is the same no matter which insurance company you buy it from. Plan G is the most comprehensive option for anyone new to Medicare because it covers five out of the six major Medicare gaps. The only cost you pay is the $257 Part B deductible in 2025. Plan N is more affordable usually $90 to $150 per month because it includes small co-pays for doctor and ER visits and may include excess charges. Supplemental plans offer predictability, simplicity, and nationwide access to any doctor who takes Medicare. No referrals, no networks, no prior authorizations.

How Medicare Advantage Plans Work

Medicare Advantage plans operate very differently. These plans, often advertised at $0 premiums, replace your Original Medicare entirely. Instead of a monthly premium, you’ll pay co-pays for almost everything doctor visits, hospital stays, tests, imaging, and more. Many Advantage plans have deductibles ranging from $500 to $1,500. They include prescription drug coverage, which means no separate Part D plan is needed, and they often bundle in perks like dental, vision, hearing, and gym memberships. But the tradeoff? Networks. You must use the plan’s doctors, hospitals, and specialists. If you travel or spend winters in another state, your access may be limited.

Why Part D Drug Plans Matter

If you choose a supplemental plan, you must also choose a Part D drug plan. The national average premium is about $35 per month. If you don’t have creditable drug coverage and you skip Part D, you’ll pay a lifelong penalty 1% per month for every month you go without coverage. This adds up quickly and never goes away. Your drug plan should match the medications you actually take, because formularies vary widely.

Comparing Costs and Access

The biggest differences between supplemental plans and Advantage plans come down to cost structure and doctor access. Supplemental plans have predictable, low out-of-pocket costs and no referrals. Advantage plans may look inexpensive upfront but can have out-of-pocket maximums between $3,000 and $10,000 and require referrals, prior authorizations, and network compliance. Supplemental plans stay the same year after year as long as premiums are paid. Advantage plans change annually, sometimes significantly.

Understanding Out-of-Pocket Costs

Plan G has the lowest out-of-pocket exposure just the $257 Part B deductible. Plan N adds small co-pays but still limits out-of-pocket risk. Medicare Advantage has a much higher potential cost. Even though the premium may be $0, the plan’s annual out-of-pocket max could reach up to $10,000 depending on network type (HMO or PPO). If you want simplicity and stable costs, supplemental plans deliver it. If you want lower upfront premiums and don’t mind networks, Advantage plans may fit your budget.

Enrollment Rules You Need to Know

Your ability to choose a supplemental plan is tied to your Medicare Part B start date. You get a six-month open enrollment period where no medical underwriting is required. If Part B starts April 1, 2025, your window lasts until September 30, 2025. After that, you may have to answer 30 to 40 health questions and you can be denied. Advantage plans, on the other hand, allow more flexible enrollment. You can join during your initial enrollment period at age 65 or during a special enrollment if coming off employer coverage. Advantage plans renew annually, and you can change them every fall, but supplemental plans stay with you permanently once you’re enrolled.

Annual Changes in Medicare Advantage

Every fall, Medicare Advantage plans send you an ANOC your Annual Notice of Change. Premiums, co-pays, deductibles, formularies, and doctor networks can all change, and some plans disappear altogether. Supplemental plans do not change as long as you pay the premium. This stability is why many people choose them early when they’re healthy.

How to Choose the Right Plan

If your budget allows it, starting with a supplemental plan especially Plan G is the safest long-term decision. It provides the broadest access, the most predictable costs, and the least red tape. If your budget is tight, an Advantage plan may be a temporary solution, but be prepared to review it every year. Switching from Advantage to supplemental later can be difficult because of medical underwriting. Your best decision is made at age 65 when you have guaranteed approval into any supplemental plan without health questions.

The post Medicare Advantage vs. Supplemental Plans: What You Need to Know Before You Choose appeared first on ROI TV.