Medicare Advantage vs Medigap when the costly year arrives
Medicare Advantage vs Medigap looks like a premium question until the year goes badly. The 2026 in-network cap is $9,250. Here’s that year priced twice.
In This Article
The choice comes down to a year you can’t predict
Most Medicare Advantage vs Medigap comparisons stop at the features. This one prices the decision — the same person, two different years, both paths, using verified 2026 figures.
Where you are decides where to start:
- Turning 65 soon: read the two cost sections, then the enrollment window that closes behind you.
- Already in an Advantage plan: start at the one-way door. Your options may be time-limited.
- Already holding Medigap: the trade-offs section covers what your monthly premium does over time.
Two rules apply to everyone. You cannot hold both at once, and you owe the Part B premium either way — one of Medicare’s five separate bills.
ℹ️ Financial Disclaimer: This article is general education about insurance, tax and retirement costs, not personalized advice, and it recommends no plan, policy or carrier. Premiums, plan availability and state rules vary by ZIP code and change annually. Before acting, consult a state-licensed Medicare insurance agent, a free SHIP counselor, a fiduciary advisor, or a CPA about your own situation.
How each one actually pays your bills
The two paths differ in who pays your doctor, not only in what you pay.
Advantage replaces the bill; Medigap sits on top of it
Under Original Medicare, the government pays your claim and leaves you a share; a Medigap policy pays that share for you. An Advantage plan replaces the arrangement: a private insurer takes over those claims on its own terms.
You pay the Part B premium either way
A $0 plan premium is not a $0 premium. Advantage enrollees still owe the standard Part B premium every month.
Why you can’t hold both
Medigap pays only alongside Original Medicare, so insurers cannot sell you one while an Advantage plan is active.
🔍 How It Works: On a $1,000 outpatient bill, Original Medicare charges the Part B deductible, then 20% of the rest — Plan G pays that 20%. Under Advantage you owe your plan’s copay.
What a healthy year costs under each
In a routine-care year Advantage is genuinely cheaper, and the gap is mostly premium.
The premiums you pay on both paths
Both paths start with the same bill: the 2026 standard Part B premium of $202.90 a month plus a $283 deductible, per CMS’s 2026 Part A and B cost figures. Our 2026 Part B premium breakdown covers surcharges above $109,000.
What Medigap Plan G adds
Plan G stacks a second premium on top. KFF put the national average at $164 a month in 2023, its most recent year — and first-quarter 2026 filings from six major insurers, reported by KFF Health News, ranged from just over 12% to more than 26%.
What Plan G still doesn’t cover
Plan G leaves you the Part B deductible and covers no drugs, dental, vision or hearing. Drug coverage means a separate Part D premium, usually bundled free inside Advantage.
What a sick year costs under each
Advantage costs less in a healthy year and can cost thousands more in a sick one. Here is the same year, priced twice.
| Cost line (2026) | Original Medicare + Plan G | Advantage HMO, $0 plan premium | Key detail |
|---|---|---|---|
| Part B premium | $2,434.80/year | $2,434.80/year | Owed on both paths |
| Policy or plan premium | $164/month nationally in 2023 | $0 on many plans | Medigap pricing varies by state, age and insurer |
| Healthy year, care costs | $283 deductible | Routine copays set by the plan | Plan G doesn’t cover the Part B deductible |
| Sick year, care costs | $283 — Plan G absorbs the rest | Up to the plan’s maximum: $5,421 average, $9,250 ceiling | Original Medicare alone has no annual cap |
| Drug coverage | Separate Part D premium | Usually bundled | A $2,100 Part D cap applies either way |
Sources: CMS 2026 Part A and Part B premiums and deductibles; KFF, Medicare Advantage in 2026. The Plan G figure is KFF’s 2023 average, its most recent — get a quote for your own ZIP code.
The 2026 Advantage out-of-pocket cap
For 2026, an Advantage plan’s in-network maximum out-of-pocket cannot exceed $9,250, or $13,900 counting out-of-network care, per KFF’s 2026 analysis of Advantage out-of-pocket limits. The enrollment-weighted average is far lower: $5,421.
Why Plan G’s bad year looks like its good year
Plan G pays the Part A hospital deductible of $1,736 per benefit period, the hospital and skilled nursing coinsurance, and your 20% Part B share. The bill barely moves.
Where the two paths cross
Advantage’s healthy-year saving runs roughly $2,000 to $2,500. One year reaching an average maximum repays it.
✅ Action Step: Ask a licensed Medicare agent or SHIP counselor: “What is this plan’s 2026 in-network and out-of-network maximum, and which of my doctors are in network next year?”
Why the switch back is a one-way door
You can leave an Advantage plan each year. Buying a Medigap policy to go with it is the part that may not be possible.
Your one six-month window
Federal law gives you one Medigap open enrollment period: six months from the first month you have Part B at 65 or older, per Medicare’s guidance on buying a Medigap policy. It never repeats — see our Medicare sign-up deadlines.
The situations that still guarantee you a policy
Afterwards, federal guaranteed issue rights are narrow: your plan leaves your area, you move away, employer coverage ends, or you are inside a trial right. Most carry a 63-day deadline.
The four states — and the birthday rules
Connecticut, Massachusetts, Maine and New York require guaranteed issue for everyone 65 and older, per KFF’s analysis of state Medigap rules. Elsewhere insurers may review your health, and the birthday-rule states change.
⚠️ Costly Mistake: Choosing Advantage at 65 on the healthy-year math, then trying to buy Medigap at 72 after a diagnosis. In most states the insurer can decline.
The trade-offs the premium comparison hides
Both paths cost something the premium comparison never shows.
What prior authorization adds to an Advantage year
Prior authorization is routine in Advantage and rare in Original Medicare. The HHS Office of Inspector General found denial rates of 65% for long-term care hospital stays and 54% for inpatient rehabilitation.
What Medigap premiums do over time
Medigap’s cost is the premium, and it rises. Most states let insurers raise rates as you age, and a rate increase is not a guaranteed-issue event, so you cannot always shop out.
What neither one covers
Drugs sit outside both. The Part D out-of-pocket cap is separate from an Advantage plan’s medical maximum, so a bad year can hit both.
📊 Data Point: Advantage insurers made nearly 53 million prior authorization determinations in 2024; traditional Medicare saw roughly 2 per 100 beneficiaries — Source: KFF analysis of CMS data, January 2026.
Five mistakes that lock in the wrong answer
The third mistake is the only one you may not be able to undo.
- Reading a $0 plan premium as $0 in premiums — Part B is still owed.
- Comparing plans on premium and never looking up the out-of-pocket maximum.
- Assuming the door back to Medigap stays open. In most states it doesn’t.
- Checking whether your doctors are in network this year rather than next.
- Forgetting drug coverage is a separate cap on both paths.
Already made it? Other insurers underwrite differently, and your state may grant rights federal law doesn’t offer.
✅ Action Step: Contact your state’s free Medicare counseling program and ask: “Do I have a guaranteed-issue right now, and how long do I have to use it?” SHIP counselors sell nothing.
Medicare Advantage vs Medigap: common questions
1. Is Medicare Advantage or Medigap better?
Neither. Advantage costs less in a low-use year; Medigap costs less once cost sharing nears your plan’s maximum. Ask a licensed Medicare agent to price both against your health history.
2. Can you have both Medicare Advantage and Medigap?
No. Medigap pays only alongside Original Medicare, and insurers cannot sell you one while an Advantage plan is active.
3. Why is Medigap more expensive than Medicare Advantage?
Medigap collects upfront through premium to absorb cost sharing; Advantage collects later through copays as you use care. A SHIP counselor can compare both.
4. Can you switch from Medicare Advantage to Medigap later?
Sometimes. Outside your six-month Medigap open enrollment period, most states let insurers underwrite, so approval depends on your health. Confirm your rights before dropping coverage.
5. What is the Medicare Advantage out-of-pocket maximum for 2026?
$9,250 in-network, or $13,900 counting out-of-network care. Most plans set lower limits; the average is $5,421.
6. Does Medigap have an out-of-pocket maximum?
Not in the usual sense. Plan G absorbs nearly all Original Medicare cost sharing, leaving only the Part B deductible.
7. What does Medigap Plan G not cover?
Plan G excludes the Part B deductible, drugs, dental, vision and hearing. Drug coverage needs a separate Part D plan.
8. What is the six-month Medigap open enrollment period?
It starts the first month you have Part B at 65 or older. Insurers must sell you any policy regardless of health.
9. Do you still pay the Part B premium with Medicare Advantage?
Yes. Every enrollee owes the standard Part B premium — $202.90 monthly in 2026 — plus any premium the plan charges.
10. What happens if a Medigap insurer denies you?
You can apply to other insurers, since underwriting differs by company, or keep current coverage. A SHIP counselor can identify remaining options.
11. Which states let you switch Medigap plans without underwriting?
Connecticut, Massachusetts, Maine and New York guarantee issue for everyone 65 and older. Other states run birthday rules that change. Check current rules with your state insurance department.
What to do before October 15
Three moves before Annual Enrollment opens:
- Get a Plan G quote for your own ZIP code from at least two insurers.
- Look up your Advantage plan’s 2026 in-network and out-of-network maximums in its Evidence of Coverage.
- Call your SHIP and ask whether you hold a guaranteed-issue right today.
The healthy year is easy to price. Price the other one too.
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The content on Finance Authority Hub is provided for general informational and educational purposes only and should not be considered personalized financial, investment, tax, legal, or professional advice. Financial decisions depend on your individual goals, income, risk tolerance, location, and regulatory situation. Before acting on any information, strategy, estimate, or calculator result, consult a qualified licensed professional who can evaluate your specific circumstances.