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Choosing Between Medicare Supplement and Medicare Advantage

Medicare Supplement and Medicare Advantage

As part of ongoing efforts by the Department to foster consumer education, the Insurance Division developed the following information on Medicare Supplement and Medicare Advantage health care plans.


Medicare Supplement is accepted by any provider or facility that accepts MedicareThe word medicare in pink block print surrounded by pills and a stethescope without network restrictions. You can benefit from an annual limit on out-of-pocket costs. Monthly premiums for Medicare Supplement plans may be higher than Medicare Advantage plans. 

Medicare Advantage plans require co-payments or co-insurance for covered services, and you’ll also pay a monthly premium. These plans have a limited network of providers you must use. Medicare Advantage plans may have low or zero-dollar premiums. However, your out-of-pocket costs when receiving care may be higher than with Medicare Supplement plans.


Original Medicare • can choose any doctors, hospitals, and other Medicare-approved providers countrywide. A Medicare Supplement functions the same way. For example, if you’re undergoing cancer treatment with a physician and facility accepting Medicare, you can stay with that provider and facility to receive your treatment.  

Medicare Advantage • must use in-network providers and facilities, which could limit your options. If you see a specialist or provider outside the network of providers that contract with your plan, you could be stuck with the full bill and no insurance coverage. Medicare Advantage plans can change year to year. Both network providers and drug coverage can change each year.


Each plan can offer different benefits. Medicare Advantage plans provide prescription drug coverage and Medicare Supplement plans do not. With regards to providers like doctors and hospitals in Vermont, be sure to check whether your doctor is contracted with the plan (in network). If your doctor is not in the Medicare Advantage network of providers, it could make accessing routine care through your Medicare Advantage plan inconvenient. 

group of older adults in a circle with arms raised outdoors under a treeOn the other hand, the right Medicare Supplement plan can provide consistent access to care with doctors and facilities across the country that accept original Medicare (which is almost all of them). Travelers may want to stick with Original Medicare plus Medigap plans. If you’re a traveler, Original Medicare is accepted anywhere in the U.S. where Medicare is accepted; international travelers may want a Medicare Supplement plan with foreign emergency coverage. 


Some Medicare Advantage plans may offer “extra” benefits that are not available for Medicare Supplement plans. "Extra benefits" may include money towards costs for hearing aids, dental, vision, and gym memberships. Be skeptical about extra benefits and remember you’re purchasing a policy for when you get sick or have an accident.

Some “extra” dental or hearing aid benefits may only provide a $50 to $100 coupon. Your health insurance coverage protects you financially when you get sick or are hospitalized. Pick a plan you want to protect you in case of serious illness or injury.

Overall Benefits of Medicare Supplement vs. Medicare Advantage

A Medicare Supplement added to a Medicare plan could be right for those who: 

  • Don’t want to be restricted to one network of providers. 
  • Want help with copays and costs not covered by Medicare. 
  • Prefer a consistent monthly premium to a large, unexpected hospital bill when accessing care.

Overall, the benefits of a Medicare Advantage plan with prescription coverage may work best for those who:

  • Seek one premium for all services traditionally provided by a health insurance plan (medical and prescription drug coverage are combined). 
  • Live in an area with good in-network provider choices through Medicare Advantage
  • Can absorb the plan’s out-of-pocket costs including any high deductibles and cost-sharing in case of a medical emergency.

Each person choosing a plan has individual needs. Please check out the Medicare 101 training and counseling provided by the Vermont State Health Insurance Assistance Program (SHIP) (phone: 1-800-642-5119).

There are rules that restrict your ability to change between Medicare Advantage and Medicare Supplement plans.

words medicare in different color letters with dotted lines to various areas covered: doctors, clinics and icons of each