Medicare Advantage vs. Medigap: The Real Cost Comparison

Key Takeaways

67% of Medicare Advantage plans charge $0 premium beyond Part B, but the average enrollee still faces $5,421 in potential yearly out-of-pocket costs (KFF; KFF, retrieved 2026-09-07).

Medigap costs more every month (Plan G averages $164/month) but caps most further exposure at the $283 Part B deductible once you have it (KFF, retrieved 2026-09-07).

90% of Medicare Advantage enrollees have no legal right to buy Medigap later without medical underwriting if they change their mind (KFF, retrieved 2026-09-07).

A widely cited total-cost study found Medicare Advantage cheaper on average, but it was commissioned by UnitedHealth Group, the largest MA insurer, so treat it as directional, not neutral.

Medicare Advantage actually has a lower prior-authorization denial rate than ACA marketplace or Medicaid managed-care plans, and the highest appeal-overturn rate of the three.

The pitch for Medicare Advantage is simple: often $0 extra premium, plus dental, vision, and hearing benefits Original Medicare doesn't cover. The pitch for Medigap is also simple: a higher monthly bill in exchange for near-total predictability. Both pitches are true, and neither tells you the full story. If you're still deciding which path fits you at all, start with our plain-language Medicare guide; this post assumes you already know the basics and want the real 2026 numbers, including the parts each side tends to leave out.

Not affiliated with the federal Medicare program. PlanAlert is an independent consumer tool. For official information and enrollment, use Medicare.gov, call 1-800-MEDICARE, or contact your free State Health Insurance Assistance Program (SHIP) at shiphelp.org.

The premium comparison: why "$0" isn't the whole story
What happens when you actually get sick
The total-cost studies: what they actually show
The lock-in risk nobody talks about
Is Medicare Advantage actually riskier for care denials?
Star Ratings: a data gap worth knowing about
So which one should you actually pick?
Frequently asked questions

The Premium Comparison: Why "$0" Isn't the Whole Story

Medicare Advantage (Part C) is the private-plan alternative to Original Medicare, and its premiums look unbeatable on paper. In 2026, 67% of Medicare Advantage prescription drug plans charge no premium beyond what you already pay for Part B. 98% of beneficiaries have access to at least one $0-premium plan in their area. The enrollment-weighted average MA premium, the typical amount actually paid once you account for how many people are in each plan, is just $14.00 per month, down from $16.40 in 2025 (KFF, retrieved 2026-09-07).

Medigap (Medicare Supplement) is priced the opposite way. You pay more every month, and in exchange the plan pays most of what Original Medicare leaves you owing. The national average premium across all current Medigap policyholders is $217 per month ($2,604 a year). Prices vary sharply by state and by which lettered plan you pick.

Medigap plan	Average monthly premium	Share of all policyholders
Plan F (closed to new enrollees since 2020)	$274	36%
Plan G (most common for new enrollees)	$164	39%
Plan N (lower premium, small copays)	lower than Plan G, state-dependent	10%
All plans, national average	$217	100%

Plan G premiums also range by state, from roughly $140 in DC or Hawaii to $236 in New York. Source: KFF analysis of NAIC data (Mark Farrah Associates), 2023 data. Retrieved 2026-09-07.

The takeaway so far is not "MA is cheap and Medigap is expensive." It's that MA prices for the average month, while Medigap prices for a bad year.

What Happens When You Actually Get Sick

This is where the premium comparison stops mattering and the deductible comparison starts. Every Medicare Advantage plan is legally required to cap your annual out-of-pocket costs. That cap is higher than most people assume.

The 2026 enrollment-weighted average MA out-of-pocket limit is $5,421 for in-network care alone. Count out-of-network costs and it rises to $9,825, against a federal maximum of $9,250 in-network and $13,900 combined. Plan type matters too: HMO plans average a lower $4,636 limit, while PPO plans average $6,592 (KFF, May 2026, retrieved 2026-09-07).

Medigap works differently. Once you have a Plan G policy, it pays essentially everything Original Medicare doesn't, aside from the $283 Part B deductible for 2026. There is no separate Medigap deductible to hit and no annual maximum to calculate, because there's almost nothing left for you to owe.

In a high-cost year	Medicare Advantage (2026 avg.)	Original Medicare + Medigap Plan G
Monthly premium	$14 average (67% pay $0)	$202.90 (Part B) + $164 (Plan G) = $366.90
Annual premium total	~$168	~$4,403
Your exposure in a bad year	Up to $5,421 (in-network) on top of premiums	$283 Part B deductible, then little else
Worst-case annual total	~$5,589	~$4,686

Illustrative comparison using 2026 national averages. Individual costs vary by plan, region, and health needs; Part D drug costs are separate under either path. Sources: KFF Medicare Advantage 2026 Spotlight; KFF Medicare Advantage Out-of-Pocket Limits; KFF Medigap Key Facts. Retrieved 2026-09-07.

In an average, healthy year, Medicare Advantage usually costs less. In a genuinely bad year, hospitalization, a new diagnosis, a major surgery, the gap narrows or reverses, because Medigap has already capped your downside and MA hasn't.

The Total-Cost Studies: What They Actually Show

An actuarial study by Milliman found that the average Medicare Advantage beneficiary spent $3,651 a year in total: premiums plus out-of-pocket for medical, drug, dental, and vision. The comparison group was someone on Original Medicare plus a standalone Part D plan and a Medigap Plan G. That group spent $7,790 a year, a 53% gap in MA's favor (Milliman, January 2026, retrieved 2026-09-07).

That number gets cited often, and it deserves one important caveat: the study was commissioned by UnitedHealth Group, the largest Medicare Advantage insurer in the country. Milliman is a credentialed actuarial firm, and the methodology appears sound, but a study paid for by the industry's biggest MA insurer is not a neutral referee. Treat the direction (MA is often cheaper for typical, non-catastrophic use) as useful, and treat the exact multiple with appropriate skepticism.

A separate, independently published KFF analysis adds a counterweight. Beneficiaries who disenrolled from Medicare Advantage back to Original Medicare cost the program 27% more, $2,585 per person more, in 2022 than people who had stayed on Original Medicare the whole time (KFF, retrieved 2026-09-07). That doesn't prove MA caused higher costs. It's at least as likely that sicker people are the ones who leave MA, since Original Medicare offers unrestricted access to specialists and treatment. Either way, it's a sign that "MA is simply cheaper" misses something. The people for whom MA works well and the people for whom it doesn't may not be the same people.

The Lock-In Risk Nobody Talks About

Here is the cost that rarely makes it into a comparison chart. Say you enroll in Medicare Advantage and later decide you want to switch to Original Medicare with a Medigap policy. In most states, insurers can ask about your health history and deny you or charge you more, unless you're inside a narrow qualifying window.

90% of Medicare Advantage enrollees age 65 and older, about 22.4 million people, have no guaranteed-issue right (the insurer's legal obligation to sell you a policy regardless of health) to buy a Medigap policy outside those specific windows. Only four states require insurers to sell Medigap to anyone regardless of health, year-round: Connecticut, Maine, Massachusetts, and New York (KFF, retrieved 2026-09-07).

In practice, this makes the Medicare Advantage decision easier to walk back while you're healthy. It's harder to walk back once you actually need the coverage Medigap would have provided, which is exactly backwards from when you'd want the flexibility. If your Medicare Advantage plan is ever discontinued by the insurer, though, a different and more generous guaranteed-issue right applies. See if your plan is discontinued for how that works.

Is Medicare Advantage Actually Riskier for Care Denials?

Prior authorization is the requirement to get a plan's approval before certain care. It's the most common complaint about Medicare Advantage. The 2025 data complicates the story, though. Medicare Advantage insurers denied 12% of standard prior-authorization requests, the lowest denial rate of the three markets KFF studied; Medicaid managed care and ACA marketplace plans both denied more. Of the MA denials that were appealed, 67% were overturned, the highest overturn rate of the three (KFF, August 2026, retrieved 2026-09-07).

The important caveat: very few denials are ever appealed in the first place, across all three markets. A high overturn rate among the small share of people who appeal doesn't mean prior authorization is a non-issue. It does mean the "MA is uniquely bad for denials" narrative isn't well supported by the newest data. It also means appealing a denial is worth doing if it happens to you.

Star Ratings: A Data Gap Worth Knowing About

CMS grades every Medicare Advantage plan on a 1-to-5 star scale. Plans with 4 or more stars get a bonus payment that funds the extra benefits, dental, vision, over-the-counter allowances, that make MA plans look free. Medicare will spend at least $13.4 billion on this quality bonus program in 2026, up from $12.7 billion in 2025 and more than four times the $3.0 billion spent in 2015 (KFF, retrieved 2026-09-07).

For the 2026 star ratings themselves, trade press reports disagree on the exact average. Some cite a simple average of 3.65 stars, down from 3.92 in 2025; others cite a different enrollment-weighted average of 3.98. We could not confirm either figure directly on a current CMS.gov page at the time of writing, so we're citing this as reported by trade outlets, not as a verified CMS figure. Both sources agree that roughly 40% of contracts reached 4-plus stars for 2026, covering about 64% of MA enrollees (Becker's Payer Issues, retrieved 2026-09-07). Before you enroll in a specific MA plan, check its current star rating on the Medicare Plan Finder rather than relying on a marketing claim.

So Which One Should You Actually Pick?

Neither path is objectively better. The honest answer depends on how you weigh a lower monthly bill against a capped worst case.

Medicare Advantage tends to fit people who are comfortable with a network and prior authorization, who want dental/vision/hearing extras, who are in good health, and who want to minimize the monthly premium outlay.
Medigap tends to fit people who travel or split time between states, who want nationwide provider access with no network, who have ongoing health conditions where an MA network could be limiting, and who value knowing their worst-case cost in advance.
The lock-in risk should weigh more heavily than it usually does. If there's real uncertainty about which path is right, the fact that Medigap is hard to buy later, but easy to leave for Medicare Advantage at any Open Enrollment, is itself information. Starting with Medigap preserves more future flexibility than starting with Medicare Advantage does.

For the full mechanics of both paths, enrollment timing, and penalties, see our Medicare 101 guide.

Whichever path you choose, revisit it every year. Plan premiums, drug formularies, and provider networks all reset annually. Most beneficiaries never re-check, which is exactly how a good decision in one year quietly becomes a bad one two years later.

Want your Medicare costs on your PlanAlert watchlist? We plan to extend plan monitoring to Medicare Advantage and Part D. Join the early-access list to be notified when it is available.

Frequently Asked Questions

Can I switch from Medicare Advantage to Medigap later if I change my mind?

Yes, but usually not on your terms. Outside your initial enrollment or specific qualifying events, a Medigap insurer in most states can medically underwrite you, meaning it can deny coverage or charge more based on your health. Only Connecticut, Maine, Massachusetts, and New York guarantee year-round issue regardless of health.

Does Medigap cover everything Medicare Advantage doesn't?

No. Medigap fills the gaps in Original Medicare: deductibles, coinsurance, and, for high-deductible plans, a separate deductible of its own. It doesn't add the dental, vision, hearing, or fitness benefits that most Medicare Advantage plans include. You'd need to budget separately for those if you choose Original Medicare plus Medigap.

Is the $3,651 vs. $7,790 cost comparison trustworthy?

The methodology comes from a credentialed actuarial firm, but the study was paid for by UnitedHealth Group, the largest Medicare Advantage insurer. Use the direction, that MA is often cheaper for average, non-catastrophic use, as a reasonable planning input. Don't treat the exact numbers as a guarantee, and weigh them against the lock-in risk and disenrollment-cost data above.

Is Medicare Advantage really riskier for care denials than I've heard?

The newest KFF data shows MA has the lowest prior-authorization denial rate (12%) and the highest appeal-overturn rate (67%) of the three markets studied. Very few denials get appealed at all, so this doesn't mean denials never happen, but the "MA is uniquely bad" narrative isn't well supported by 2025 data.

What if I already have Medicare Advantage and I'm worried about being locked in?

You aren't locked in today; you're only at risk of being unable to leave for Medigap later without underwriting. If nationwide access and predictable costs matter enough to you, you can act on that now. Switch to Original Medicare plus Medigap during any Open Enrollment while you're still healthy enough to likely qualify, rather than waiting until you need it.

The Bottom Line

Medicare Advantage usually costs less in an average year; Medigap usually costs less in a bad one.
The average 2026 MA out-of-pocket maximum is $5,421 in-network; Medigap Plan G caps most exposure at the $283 Part B deductible.
90% of MA enrollees have no guaranteed right to buy Medigap later without medical underwriting, which makes the decision easier to reverse in one direction than the other.
The most-cited "MA is cheaper" study was funded by the largest MA insurer. Use it as one data point, not the final word.
Whichever path you pick, review it every year; the numbers behind this comparison change annually.