This is the time of year when millions of people choose the version of Medicare coverage that they think will be best for them—a complicated challenge that has tremendous implications for their health and finances. Here’s what you need to know to make the best decision during the open-enrollment period that runs from October 15 through December 7, 2020, for 2021 coverage…

Traditional Medicare vs. Medicare Advantage

The various offerings under Medicare sound like alphabet soup, but basically, traditional Medicare includes Part A (hospital), Part B (medical) and Part D (prescription drugs). Medicare Advantage plans, which are growing rapidly as an alternative to traditional Medicare, are called Part C but actually incorporate Parts A, B and, in most plans, D. The Advantage plans are offered by various private insurers that are approved—and paid in part—by Medicare. 

Almost everyone who signs up for traditional Medicare (technically called Original Medicare), which includes those turning 65 or older and those who have received Social Security disability payments, gets Part A without having to pay any premiums. When you add Part B, you start paying monthly premiums, which in 2020 ranged from $144.60 to $491.60, depending on income. Medicare covers 80% of any medical costs after deductibles are met—$1,408 for Part A and $198 for Part B in 2020. Because there is no maximum for out-of-pocket costs, many people who choose Original Medicare add Medigap ­supplemental insurance purchased from private ­insurers—with monthly premiums ranging from less than $100 to several hundred dollars—to cover many out-of-pocket costs, including co-pays. Most Medigap plans also cover some or all of the Part A deductible.

Medigap plans also are labeled ­alphabetically. Every plan includes the basics, but some offer more benefits than others. For instance, the plans may vary on how much of the Medicare Part A deductible is covered and whether you have coverage during foreign travel. But within a state, all plans having the same letter must include the same benefits no matter which insurer offers it. Despite that, premiums for any particular plan can differ from one insurer to another.

As an alternative to traditional Medicare, the various Medicare Advantage plans are required to cover all the services provided by traditional Medicare A and B and can offer many additional benefits as well. The plans have $0 or low monthly premiums and don’t always have a deductible, which means that along with the extra benefits, they can be very attractive financially. But they also typically have a high out-of-pocket maximum, varying from $3,000 to $10,000 depending on where you live and whether you choose an HMO plan with a limited network or a PPO plan that gives you access to out-of-network providers.

Questions to Ask 

Answering these questions can help you decide which plan is best for you…

How essential is it that I be able to choose from a very large network? 

Medicare plus Medigap is good if…

  • You want to be able to access any health-care provider across the country that accepts Medicare.
  • You split your time between homes in two or more states and need coverage in all those places.
  • You don’t want the hassle of getting referrals and preapprovals for specialists and services.

Medicare Advantage is good if…

  • You’re comfortable being limited to a network in one region of the country. 
  • Getting needed referrals is something you can handle comfortably.

What is the best way for me to manage costs?

Medicare plus Medigap is good if….

  • You prefer to have the predictable costs of a monthly Medigap premium, with its very low deductible.

Medicare Advantage is good if…

  • You put a priority on having no (or a low) monthly premium…are willing to face possible high costs if you need medical services…and will be able to cover a larger out-of-pocket maximum. 

How do I want to get drug coverage?

Medicare plus Medigap is good if…

  • You want to choose from a wider number of drug plans than what’s available through a Medicare Advantage plan, which limits the number of available drug plans.

Medicare Advantage is good if…

  • You want “one-stop shopping”—most Advantage plans include Part D, though co-pays and other details vary among providers. 

Important: If you choose Medigap, consider signing up for Part D even if you don’t currently take any prescription drugs. If you need them in the future, you’ll be able to sign up only during open-enrollment periods and you may face late-enrollment penalties.

Next Steps

Once you’ve decided in principle on a Medicare Advantage plan or Original Medicare plus Medigap, look at the plans available in your area.

How to compare specific plans: Go to Medicare’s updated online plan finder tool ( and enter your zip code. It gives details about your available Medigap and Medicare Advantage plans. It also lets you do a side-by-side comparison of Advantage plans. There’s no similar function for Medigap, so you’ll need to make your own checklist or spreadsheet. 

Also, to help in your decision, look at Medicare’s “star ratings” ( and search for “Star Rating”), which are based on consumer feedback and data on how real people rate every aspect of a plan. 

More About Advantage Plans

To compare Advantage plans, how much should I focus on $0 premiums?

It’s important to look beyond the premium, which under some plans is $0, and even past the deductibles to also check what your co-pays would be for each type of medical service, ranging from specialists to tests, and what the maximum out-of-pocket amount is. These could add up to huge amounts. 

Should I pick a PPO or HMO plan?

HMOs require that you stay within network. If you get sick and want to go beyond your network for care, PPOs traditionally allow this. This flexibility means a PPO will have a higher out-of-pocket maximum than an HMO—$10,000 rather than $7,500, for example. Important: If you want to stay with your current doctors under either type of plan, click on the “View Provider Network ­Directory” option within a plan’s details to see whether those doctors are in network. 

What other benefits do Advantage plans have? 

Many offer some degree of dental, hearing and vision coverage (these are not offered with Original Medicare). Some plans also have free or discounted features such as gym memberships, medical consultations by phone or computer and/or adult day care. 

Have More Questions? 

Try the Medicare Rights Center’s interactive tool at for help with common questions and decision-making or call the Center at 800-333-4114. 

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