Key Takeaways

• Medicare Advantage plans have provider networks, while Medicare Supplement plans allow you to see any doctor who accepts Medicare. But the differences don’t stop there—each has unique rules, costs, and flexibilities.

• Your travel habits, health needs, and budget all impact which Medicare option will serve you better in 2025. It’s not just about coverage—it’s about control, convenience, and cost predictability.

How Medicare Advantage and Medicare Supplement Plans Work Differently

Medicare Advantage and Medicare Supplement (also called Medigap) plans are two distinct options available to people with Medicare. Both aim to reduce your out-of-pocket healthcare costs, but they function in fundamentally different ways.

Medicare Advantage Plans (Part C)

These are all-in-one plans that replace your Original Medicare (Part A and B). They’re offered by private insurance companies approved by Medicare. You usually get hospital, medical, and often prescription drug coverage in one bundled plan.

• You typically need to use doctors and hospitals in a network.

• Most plans require referrals for specialists.

• Costs are structured with copayments and out-of-pocket maximums.

• Many include extra benefits like vision, dental, or hearing.

Medicare Supplement Plans

Medicare Supplement plans work alongside your Original Medicare. They cover some or all of the out-of-pocket costs that Original Medicare doesn’t pay, such as deductibles, coinsurance, and copayments.

• You can see any doctor in the U.S. who accepts Medicare.

• No referrals needed to see specialists.

• Plans are standardized and labeled by letters (A, B, D, G, K, L, M, N).

• Does not include prescription drug coverage; you must enroll in a standalone Part D plan.

1. Freedom of Choice: Network Rules Make a Big Difference

Medicare Advantage plans often have Health Maintenance Organization (HMO) or Preferred Provider Organization (PPO) networks. This means:

• You may need to get care from in-network providers.

• Out-of-network care is limited or costs more.

• Emergency care is always covered, but routine travel care might not be.

By contrast, Medicare Supplement plans don’t use networks:

• You can go to any provider that accepts Medicare.

• There’s no need to worry about in-network vs. out-of-network pricing.

• Useful if you travel frequently or split time between multiple states.

2. Monthly Premiums vs. Predictable Costs

In 2025, Medicare Advantage plans often have lower monthly premiums compared to Supplement plans. But what you save in premiums might be paid later in the form of:

• Copayments at each doctor visit.

• Coinsurance for hospital stays.

• Potential higher costs if you need frequent care.

Medicare Supplement plans typically come with a higher monthly premium. However, your costs during the year may be more predictable:

• Some plans cover nearly all Medicare-approved expenses.

• Less financial stress when unexpected health issues arise.

3. Out-of-Pocket Maximums and Financial Protection

One important protection in Medicare Advantage is the annual out-of-pocket maximum. In 2025:

• Plans are required to cap in-network costs at no more than $9,350.

• Once you hit that limit, the plan pays 100% for covered services.

Medicare Supplement plans don’t have an annual out-of-pocket maximum. However:

• Some plans (like Plan G) cover most costs, minimizing what you ever owe.

• You still benefit from Original Medicare’s limited cost-sharing structure.

4. Prescription Drug Coverage Is Handled Differently

Most Medicare Advantage plans include built-in Part D prescription drug coverage. That means:

• You don’t have to shop for a separate plan.

• Formularies (drug lists) vary, so check if your medications are covered.

Medicare Supplement plans do not include drug coverage. You need to purchase a standalone Part D plan. This gives you flexibility:

• You can choose a Part D plan tailored to your medication needs.

• But it adds another premium to your monthly costs.

5. Prior Authorization and Referrals Add Layers of Process

Medicare Advantage plans often require prior authorization for services such as imaging, surgery, or specialty care. That means:

• Your doctor must request approval before you receive certain treatments.

• You may wait longer to get care approved.

Referrals are usually needed for specialist visits, especially in HMO plans.

With Medicare Supplement plans:

• You generally don’t need prior authorization.

• You can go straight to a specialist without a referral.

This can speed up your care and reduce administrative hurdles.

6. Enrollment Rules Are More Rigid Than They Seem

Initial Medicare enrollment typically happens around age 65. But the decisions you make then can affect your future options.

For Medicare Advantage:

• You can switch during the Annual Enrollment Period (October 15 to December 7).

• There’s also a Medicare Advantage Open Enrollment Period from January 1 to March 31.

For Medicare Supplement:

• Your best time to enroll is during your Medigap Open Enrollment Period—this 6-month window starts when you’re both 65 and enrolled in Part B.

• During this time, you can buy any Supplement plan offered in your state without medical underwriting.

• After this window, you may be denied coverage or charged more due to health conditions.

So while Advantage plans offer more flexibility to change annually, Supplement plans may lock you in based on early health decisions.

7. Extra Benefits May Be a Tiebreaker for Some

Medicare Advantage plans often include benefits that aren’t covered by Original Medicare or Supplement plans. These can include:

• Vision exams and glasses

• Hearing aids

• Preventive dental cleanings

• Fitness programs or gym memberships

While attractive, these extras shouldn’t outweigh core healthcare needs. Medicare Supplement plans don’t offer these extras, but you can always purchase standalone services if needed.

8. Travel Habits Could Tip the Balance

If you travel often or live in more than one state throughout the year, Supplement plans typically serve you better:

• You won’t be limited to provider networks.

• You’re covered anywhere Medicare is accepted.

Medicare Advantage plans may restrict coverage to a service area:

• Non-emergency care outside the network may not be covered.

• Even PPO plans may charge more out-of-network.

For snowbirds, RV travelers, or retirees who visit family across the country, that freedom can be invaluable.

9. Switching Between Plans Isn’t Always Easy

While it’s possible to switch between Medicare Advantage and Supplement, there are roadblocks:

• You can move from Advantage to Supplement only if you pass underwriting (unless you’re in your initial enrollment window).

• Once you leave a Supplement plan, going back may not be easy.

• You may not qualify for your preferred Supplement plan if your health has changed.

In contrast, switching Advantage plans is more routine—just follow the proper enrollment period.

10. Your Health Status Now—and in the Future—Matters

If you’re healthy now, a Medicare Advantage plan might seem like a good fit. Lower premiums and extra perks are appealing.

But if your health needs increase:

• You may end up paying more in copays and coinsurance.

• Switching to a Supplement plan later might not be guaranteed.

Medicare Supplement plans offer peace of mind if you want predictable costs no matter your condition.

Choosing Wisely Based on What Matters Most to You

The differences between Medicare Advantage and Medicare Supplement plans go far beyond provider networks. They affect how you access care, manage costs, and adapt to changes in your health or lifestyle. There’s no one-size-fits-all solution.

Think about your health now—and how it might change. Consider whether you prioritize flexibility or savings, simplicity or stability. Evaluate how much administrative complexity you’re willing to deal with.

And most importantly, don’t decide alone. Get in touch with a licensed agent on this website to talk through your priorities and explore what’s best for your 2025 Medicare needs.