Medicare Advantage and Medicare Supplement: How to Know Which Option is Right for You

Susan Morisato
President – Insurance Solutions, UnitedHealthcare Medicare & Retirement

What’s the difference between Medicare Advantage and Medicare supplement? This is one of the most common questions I hear from Medicare beneficiaries. Understanding the differences, and knowing which option is best for you, can be confusing. And it doesn’t help that Medicare Advantage is sometimes referred to as a Medicare supplemental policy, which only adds to the confusion.

There are many differences between Medicare supplement and Medicare Advantage plans, so for the purposes of this short column, I’ll stick to the basics.

Medicare Supplement

Generally speaking, Original Medicare covers about 80 percent of beneficiaries’ Part B health care costs, leaving them to cover the remaining 20 percent out of pocket. Medicare supplement helps pay some of the costs that Original Medicare doesn’t cover, like copayments, coinsurance and deductibles. It is designed to fill that gap in Original Medicare coverage. This is why it’s sometimes referred to as Medigap coverage.

Many people find Medicare supplement plans appealing because they can minimize their out-of-pocket health care costs, making their spending more predictable. Medicare supplement plans also allow beneficiaries to access nearly any health care provider that accepts Medicare patients.

Medicare supplement plans are standardized by letters, so for example, Plan G provides the same coverage regardless of which company offers it. They do not include prescription drug coverage, so if choosing a Medicare supplement plan, you should consider adding on a stand-alone Part D plan to round out your coverage.

Medicare Advantage

Medicare Advantage, at its essence, is an all-in-one plan. It combines Medicare Part A and Part B benefits, and in most cases, also includes prescription drug coverage. Many people like the convenience and simplicity of wrapping all of their coverage into one plan and having just one insurance card to carry in their wallet.

Care coordination is one of the hallmarks of Medicare Advantage, and it’s possible because the plans work with groups of doctors and hospitals where their members can access care. This structure supports coordination of members’ care, which basically means that the doctors providing care for members work together, under the leadership of a primary care doctor, to help ensure members get the care they need at the right time and in the most appropriate place.

Some Medicare Advantage plans offer additional benefits beyond what you’ll find in Original Medicare, such as hearing aids, gym memberships, and hearing, vision and dental care. These extra benefits can help Medicare Advantage members maximize their health and also save some money. And some plans are available for a $0 monthly premium, meaning members get additional benefits without having to pay more than their standard Part B monthly premium.

Many Medicare Advantage plans also have predictable copays, deductibles and coinsurance and offer an annual out-of-pocket maximum, so your health care costs are capped each year.

The Bottom Line

Perhaps the simplest way to think about the difference between Medicare supplement and Medicare Advantage is that you add Medicare supplement to your Original Medicare coverage, whereas Medicare Advantage takes the place of your Original Medicare coverage.

If you’re struggling to decide which type of coverage is right for you, it might help to think about how you prefer to manage your health-care dollars. Would you prefer to pay a higher monthly premium but then have little to no extra costs when you access care? If so, you might prefer Medicare supplement. Or would you prefer a lower monthly premium and then pay copays or coinsurance when you need care? If you answered yes, Medicare Advantage might be a better choice for you.

Ultimately, your decision should be based on your unique health and budget needs. And it’s too important of a decision to rush through. So take the time you need to feel confident in your final choice, and also take advantage of resources. Talking to a licensed sales agent or a counselor at your local State Health Insurance Assistance Program can help you think through your options.

You can also check out MedicareMadeClear.comOpens a new window, where you’ll find more detailed descriptions of Medicare supplement and Medicare Advantage as well as other resources that can help you determine which option is the best fit for your needs.

Susan Morisato is the president of UnitedHealthcare Medicare & Retirement’s Insurance Solutions division and is responsible for the business’s Medicare supplement plans. UnitedHealthcare is the largest provider of both Medicare Advantage and Medicare supplement plans, serving 3.6 million Medicare Advantage members and more than 4.2 million Medicare supplement members*.


Plans are insured through UnitedHealthcare Insurance Company or one of its affiliated companies. For Medicare Advantage and Prescription Drug Plans: A Medicare Advantage organization with a Medicare contract and a Medicare-approved Part D sponsor. Enrollment in these plans depends on the plan’s contract renewal with Medicare.

*Enrollment data is the 2016 internal UnitedHealth Group data.