If you're turning 65 or already on Medicare, you have a decision in front of you that most people get wrong the first time.
It's not about which insurance company is "best." It's about two completely different ways to pay for the same health care, and the price difference can run into the thousands every year.
The two main paths are Medicare Advantage (Part C) and Medicare Supplement plans, often called Medigap.
Medicare Advantage works like an HMO or PPO you may have had through an employer.
You typically pay a low or $0 monthly premium, but you agree to use the plan's network of doctors and hospitals.
There are copays for visits, and you can face prior authorizations for procedures.
The trade-off is real: lower monthly costs, more rules.
You keep original Medicare and buy a supplement that covers most of what Medicare doesn't, like the 20% coinsurance on doctor visits and hospital stays.
Premiums are higher, often $100 to $250 a month depending on your state and plan letter.
In exchange, you can see almost any doctor in the country who accepts Medicare, and there are far fewer surprise bills.
Here's where the money math gets uncomfortable.
A 2023 analysis from the health research group KFF found that the average out-of-pocket spending for people in traditional Medicare with a supplement was around $2,700 a year.
For Medicare Advantage enrollees, it was closer to $4,000.
For sicker patients, the gap widens fast.
Medigap premiums are on top of the Part B premium everyone pays, which is $185 a month in 2025.
Add a $150 Medigap premium and you're at roughly $335 a month before you see a single doctor.
An Advantage plan might cost you $0 in premium but hit you with a $5,000 hospital deductible if things go sideways.
The catch most people miss: Medigap has a one-time open enrollment window.
You get six months starting the month you're 65 and enrolled in Part B.
During that window, insurance companies must sell you any Medigap policy at the best rate, no matter your health history.
Miss it, and you can be denied or charged more because of diabetes, heart disease, or a past cancer diagnosis.
You can switch back to original Medicare during the annual Open Enrollment period from October 15 to December 7, but you may not be able to buy a Medigap policy afterward if you have health conditions.
Some states, including New York, Connecticut, Massachusetts, and Maine, have protections that let you switch year-round.
If you have a chronic condition, see specialists, or travel a lot, Medigap's predictability is often worth the premium.
If you're healthy, take few medications, and want to keep monthly costs low, an Advantage plan can work, as long as you understand the network and the out-of-pocket maximum.
One more thing: Advantage plans often throw in extras like dental, vision, hearing aids, and gym memberships.
Those perks are real, but read the fine print.
A "free" dental benefit that caps at $1,000 and requires in-network providers is not the same as comprehensive coverage.
Before you decide, call your doctors and ask which plans they accept.
Check your drug list against each plan's formulary.
And if you're leaning toward Medigap, do it during that six-month window.
Waiting is the one move that can't be undone.
The system is confusing on purpose, and the stakes are your retirement savings.
Spend an hour with a licensed counselor through your State Health Insurance Assistance Program before you sign anything.
Final Thoughts
That call is free, and it's the best return on an hour you'll get all year.