Frequently Asked Questions
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Medigap and Medicare Advantage are both coverage options for people with Medicare, but Medigap policies supplement original Medicare, while Medicare Advantage is a private insurance alternative to Medicare. They’re very different, and their unique types of coverage can’t be combined.
Only those enrolled in original Medicare, which includes Part A hospitalization and Part B doctor, can purchase Medigap insurance, also called Medicare supplement insurance. People choose to purchase Medigap to pay for some health care costs that Medicare doesn’t cover. While it’s not government run, federal rules standardize Medigap policies, which are sold through private insurers, to cover out-of-pocket Medicare expenses, such as deductibles and copayments. Medigap insurers can offer up to 10 different plans, each labeled with a letter.
Medicare Advantage, also known as Medicare Part C, is an all-in-one alternative to original Medicare. Medicare Advantage plans are offered by private companies that contract with Medicare. These plans bundle Part A hospital coverage, Part B doctor and outpatient services, and usually Part D prescription drug coverage into one combined plan.
If you decide to get coverage through a Medicare Advantage plan, you’ll still have to enroll in Medicare Part A and Part B, including paying the premiums. Part A is premium-free for most people, but Part B typically costs $174.70 a month in 2024. High earners pay more.
Some may have to pay additional monthly premiums to the Medicare Advantage plan, which averages $18.50 in 2024, but two-thirds of Medicare Advantage enrollees pay no separate premium.
Medicare
Medicare is federal health insurance for people 65 or older, and some people under 65 with certain disabilities or conditions. A federal agency called the Centers for Medicare & Medicaid Services runs Medicare. Because it’s a federal program, Medicare has set standards for costs and coverage. This means a person’s Medicare coverage will be the same no matter what state they live in.
Medicaid
Medicaid is a joint federal and state program that helps cover medical costs for some people with limited income and resources. The federal government has general rules that all state Medicaid programs must follow, but each state runs its own program. This means eligibility requirements and benefits can vary from state to state.
Medicaid offers benefits that Medicare doesn’t normally cover, like nursing home care and personal care services. People with Medicaid usually don’t pay anything for covered medical expenses but may owe a small co-payment for some items or services.
A deductible is the amount of money you pay out of pocket for certain covered health care services before your health plan starts to pay. Understanding how deductibles work may help you choose the plan that best fits your needs and budget.
You can think of your deductible as adding up throughout the year. As you start the plan year, you pay the full amount for your covered health care costs — until you meet your annual deductible. Each time you pay costs that count toward your deductible, it adds to the total amount you have to pay that year. When you reach the total deductible amount, your health plan will start to pay a portion of certain health care services for the rest of the plan year.
Keep in mind, your plan’s deductible starts over at the beginning of each plan year. And like most health care costs, your deductible may change each year.
A copay (or copayment) is a fixed amount you may pay for a covered health care service, usually at the time you receive the service.
How does a copay work?
You might remember times when you went in for a doctor visit and maybe paid a $15 or $20 copay before or after your visit. Copay amounts can vary depending on the provider and service. With health plans that have copays (not all do), you’ll know exactly what you have to pay ahead of time – which can help you budget your health care costs. For most plans, your copay does not apply toward your deductible. Also, some services may be covered at no additional cost, or $0 cost share, such as annual wellness exams and certain other preventive care services.
Compare how copays and coinsurance work
| Copay | Coinsurance | |
|---|---|---|
| What is the amount paid? | Flat dollar amount | Percentage of the cost, if you've met your deductible |
| When is it paid? | Typically paid at the time of service | Billed by the provider who you will pay directly |
| Does it count toward your deductible? | No, not in most plans | |
| Does it count toward your out-of-pocket max? | Yes | Yes |
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