Pay Now or Pay Later: The Real Cost of Medicare Advantage vs. Medigap
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Last Updated October 13, 2026
Written by Todd Bostic
Medicare Broker Licensed in TX, AL, AZ & 8 other states
Is Medicare Advantage Really "Free"?
Medicare Advantage can be enticing, salespeople will tell you it is the best thing since sliced bread because it doesn't cost anything, but is it? Let's look at it a little closer....
Extra Benefits Under Medicare Advantage Plans
On a Medicare Advantage you get all kinds of bells and whistles on some plans like dental, vision, hearing, over-the-counter, and sometimes with some plans (depending on the area) you might get transportation. Usually, you will also get a prescription plan as well included with a Medicare Advantage plan. The dental may or may not be on all plans, these days, as well as the vision and hearing. Transportation is only on the elite plans, so it has to be a really good plan to have all of them, and if it does, most likely, you are giving up something in order to get the rest.
What You Still Have to Pay For
But does it cover everything? You usually have to pay the first 3-10 days in the hospital if you have to go, most lab services have a copay, Specialists usually have a copay, and an Ambulance usually has a copay for ground and air. If you go see a Specialist and you have an HMO, a lot of times, you have to get a referral from your Primary Care doctor. Now, your Primary care doctor USUALLY doesn't have a copay, but depending on the plan you are on, it could be one. There could be a transportation benefit with your plan, but it usually has a mile limit on how far you can go, so if you are a veteran, and you go 150 miles to the VA clinic, odds are that it doesn't travel that far, but if you only go 75, it probably does. It could offer you an over-the-counter benefit to cover aspirin, Tylenol, toothpaste, toothbrush, band aids, and other non prescription things you get at a pharmacy, but not food, gas, or paper products. PPO's you don't need a referral to see a specialist so you can see any doctor you want, however the cost are higher, and usually it has less benefits than a HMO. You can get an indemnity plan to cover all of these cost so even though you are billed, you would be getting the money back each time you had to go to a doctor or hospital.
Why do some people regret choosing a Medicare Advantage plan over Original Medicare?
Because with a Medicare Advantage plan you have copays for all of your procedures with the exception of probably seeing your primary care doctor and with original Medicare, when you get a Medigap plan, you don’t pay anything other than your monthly premium.Medigap at Age 65: Why It Matters
Now for a Medigap, when you turn 65, no matter how sick you are, you are qualified, and if you can afford one at 65, you should get one, but that is my opinion. That initial decision at 65 carries more weight than most people realize - some agents consider picking Medicare Advantage during the IEP one of the biggest mistakes you can make. You will also need a prescription drug plan to go with it because the federal government says we have to have one. If you want dental, vision and hearing, there are plans that you can purchase that will cover that as well. But the thing about a Medigap is you are paying out the copay for each one of the procedures in advance because when you go to the doctor, hospital, or even have lab work done, you won't pay anything. So if your monthly bill for your plan is say $250/month, and your prescription drug plan is $50/month you are paying $300/month, but when you walk into a doctors office or hospital, you don't pay anything. You still have to pay for your medication, but hospital and doctors, and rehab facilities don't cost anything.
What's the financial risk of sticking with Original Medicare without a Medigap plan?
Sticking with Original Medicare without a Medigap (Medicare Supplement) plan exposes you to significant, potentially unlimited financial risk, primarily because there is no annual out-of-pocket maximum. Without a supplemental plan, you are responsible for 20% of all Part B (outpatient) services, with no cap on your total exposure.The Difference Between Medigap and Medicare Advantage at a Glance
| Medicare Advantage (pay later) | Medigap (pay now) | |
|---|---|---|
| Monthly premium | Often $0 or low | Higher, plus a separate drug plan premium |
| What you pay at the doctor or hospital | Copays for the first 3-10 hospital days, labs, specialists, ambulance. Exact amounts are set by each plan and change by county | Usually nothing for doctors, hospital, or rehab |
| Annual out-of-pocket cap | Yes, every plan has a maximum out-of-pocket, though not every cost counts toward it | No cap needed on a Plan G or F, since there is little left for you to pay |
| Prescription drugs | Usually built into the plan | You buy a separate Part D plan |
| Referrals and networks | HMOs need a referral for specialists; PPOs don't, but cost more | No networks and no referrals |
| Dental, vision, hearing, OTC | May be included, varies by plan and area | You buy standalone plans for those |
| Health questions to get in | None | None at 65 during your open enrollment window; underwriting after that |
Medicare Before 65 on Disability
If you haven't turned 65 yet and are on disability, and are getting on Medicare, you start out on Original Medicare, Part A and Part B, same as anybody else. From there you can stay on Original Medicare or pick up a Medicare Advantage plan. What you usually can't count on before 65 is a Medigap, because federal law doesn't guarantee you one until you turn 65, and whether a company has to sell you one before then comes down to your state's rules. In plenty of states that leaves Medicare Advantage as the only realistic option until you turn 65. You can get a Medicare Supplement if you choose when you turn 65 if you want then, because even though you have been on a Medicare Advantage, even if you have been on it for 25-30 years, a new 6-month Medigap open enrollment window opens up for you at 65.
Should You Get Medicare Advantage or Medigap?
So, my question to you, do you want a plan that you pay a guaranteed amount every month, or do you want a plan that you might have to pay something if you go to the doctor or hospital? Do you want to pay up front for your medical bills, or as they come in? The decision is yours, worth thinking about, what can you afford?
My kids keep telling me to get a Medicare Advantage plan, but my friends say stick with Original Medicare. Who should I listen to?
There’s no one-size-fits-all answer, rather than choosing between your kids or friends, compare Medicare Advantage and Original Medicare with a Medigap plan based on your doctors, budget, and health needs to see which truly fits you best.Still weighing which side of that question you land on? A licensed agent can run your doctors, your prescriptions, and your monthly budget through both options before you sign anything. You can tell us what you need and get matched with an agent, or browse Medicare agents near you and reach out directly. There’s no cost or obligation to talk with anyone in the directory.
About the Author: Todd Bostic of Todd Bostic Insurance is a Medicare licensed broker with 28+ years of experience.