Every fall, millions of Americans on Medicare face the same fork in the road, and the wrong turn can quietly drain thousands of dollars from a retirement account.
The two main paths are Medicare Advantage (Part C) and Medicare Supplement plans, often called Medigap.
They sound similar but work in completely opposite ways.
Medicare Advantage is run by private insurers that contract with the government.
You usually get a $0 or low monthly premium, plus extras like dental, vision, and gym memberships.
The trade-off is that you're locked into the plan's network, and you can face copays every time you see a doctor, get a scan, or fill a prescription.
You pay a monthly premium to a private insurer, and in exchange, the plan picks up most of the out-of-pocket costs that original Medicare leaves behind, like the 20% coinsurance on doctor visits.
You can see any provider in the country who accepts Medicare.
The cost math is where people get tripped up.
A Medigap Plan G premium can run $120 to $200 a month depending on your age and state, on top of the standard Part B premium, which is $185 in 2025.
But Medicare Advantage's low premium can be a trap if you get sick.
According to KFF, the average Medicare Advantage enrollee still faces thousands of dollars in potential out-of-pocket costs each year, with maximum limits that vary widely by plan.
Medigap Plan G, by contrast, leaves you responsible only for the Part B deductible, about $257 in 2025.
There's another factor that catches people off guard: Medigap has a one-time open enrollment window.
When you first sign up for Part B, you have six months to buy any Medigap plan in your state without answering health questions.
Miss that window, and insurers can charge you more or deny you outright because of a pre-existing condition.
Medicare Advantage has no such restriction.
You can switch into a plan during the annual enrollment period each fall, and you can also drop it and try to buy Medigap later.
But here's the catch: in most states, that later Medigap application goes through medical underwriting.
A cancer diagnosis or a heart condition can shut the door.
That asymmetry is why financial planners often tell healthier, wealthier retirees to grab Medigap while they can.
People with tight budgets or who rarely use care may prefer the lower upfront cost of Medicare Advantage.
Neither option is right for everyone, and rules vary by state and county.
Before you decide, check whether your doctors are in a plan's network, read the annual out-of-pocket maximum, and look up your state's Medigap rules at Medicare.gov or your State Health Insurance Assistance Program. **Our take:** The cheapest premium is rarely the cheapest plan once you actually need care.
If you can afford the monthly Medigap cost and you're still in your first enrollment window, locking in that flexibility is often the smarter long game.
Final Thoughts
Just run your own numbers first, because the right answer depends on your health, your doctors, and your budget.