Medigap vs. Medicare Advantage: The Decision You Only Get to Make Once

Every fall, the Medicare Annual Enrollment Period opens on October 15 and closes December 7, and every fall the advertising treats it as a shopping season: compare plans, switch if you like, try again next year. For the drug plan, that is true. For the choice underneath it, whether to build your coverage on Original Medicare with a Medigap supplement or hand the whole thing to a private Medicare Advantage plan, it is only half true. You can move from Medigap to Medicare Advantage any fall you like. Moving back is a different matter, and for many people it is not available at all.

More than half of eligible Medicare beneficiaries, about 55% nationally in 2026 and a similar share in Texas, are now in Medicare Advantage, so this is no longer a niche decision. It is the default one. This article lays out what each path actually costs in 2026, where the money and the risk sit, why the door swings one way, and how we think about a choice that most people make once, in a six-month window, for the rest of their lives.

What you are actually choosing

The vocabulary makes this sound like a choice between two insurance products. It is closer to a choice between two architectures.

Path one: Original Medicare plus a supplement. The federal government runs Part A (hospital) and Part B (medical). You see any provider in the country that accepts Medicare, which is nearly all of them, with no network and no referrals. The catch is that Original Medicare has real cost-sharing and no ceiling on it. In 2026, the Part A hospital deductible is $1,736 per benefit period (not per year; a second admission after 60 days out of the hospital starts a new one). Part B carries a $283 annual deductible and then 20% coinsurance on most outpatient care, with no annual maximum. A long course of chemotherapy or dialysis on bare Original Medicare has no cap. A Medigap policy (sold as Medicare Supplement insurance) is private insurance that pays that cost-sharing for you, which converts an uncapped exposure into a fixed monthly premium. You add a standalone Part D plan for drugs.

Path two: Medicare Advantage. A private insurer contracts with Medicare to deliver your Part A and Part B benefits, usually with Part D bundled in, in exchange for a per-enrollee payment from the government. The plan builds a provider network, sets its own copays and deductibles, can require prior authorization, and must cap your in-network out-of-pocket costs for medical care at or below a federal ceiling. Most plans add dental, vision, hearing, and a fitness benefit. Most charge no premium beyond the Part B premium everyone pays.

Both paths sit on top of the same Part B premium: $202.90 per month in 2026 at the standard rate, and more if IRMAA applies. The income surcharge does not care which path you picked. And both paths are only available once you are enrolled in Parts A and B, which is why the enrollment windows come first and this decision comes second.

The 2026 cost architecture, side by side

The two paths do not just cost different amounts; they cost differently. One charges you a known premium to eliminate variability. The other charges you little or nothing up front and lets the variability sit with you, inside a cap.

Path one in numbers. With Plan G, the most common choice for anyone newly eligible since Plan F closed to new enrollees in 2020, your medical cost-sharing in 2026 is the $283 Part B deductible and then nothing: the policy pays the $1,736 hospital deductible, the 20% coinsurance, the skilled nursing coinsurance, and the excess charges some doctors are allowed to bill above the Medicare rate. Your worst medical year and your best medical year cost the same, apart from drugs, which are capped at $2,100 under the redesigned Part D benefit. What you pay for that certainty is the Medigap premium, every month, for life, and under attained-age pricing, the most common method, it rises as you get older. Two variants trim the premium: Plan N, which adds copays of up to $20 for some office visits and up to $50 for emergency room visits and leaves you exposed to excess charges; and High-Deductible Plan G, which is the same coverage after you pay the first $2,950 of Medicare-approved costs in 2026, in exchange for a much lower premium. No standardized plan sold to newly eligible people covers the $283 Part B deductible.

Path two in numbers. In 2026, 75% of people in individual Medicare Advantage plans with drug coverage pay no premium beyond Part B, and the average supplemental premium across all enrollees is $15 a month. About 31% are in plans that rebate part of the Part B premium, most often by less than $10 a month, though about a third of those plans rebate $100 or more. In exchange, you pay copays and deductibles as you go, and the plan’s out-of-pocket cap does the job Medigap does, but only after you have spent up to it. The federal ceiling on that cap is $9,250 for in-network care in 2026 and $13,900 for in-network and out-of-network care combined in a PPO. Actual plan caps are usually lower: the enrollment-weighted average is $5,421 in-network, with HMOs averaging $4,636 and PPOs $6,592, and about 9% of enrollees are in plans set at the full $9,250. Drug spending is capped at $2,100 too, but it counts separately, so a bad year on a plan at the ceiling can mean $9,250 of medical cost-sharing plus $2,100 of drug costs before either cap engages.

The comparison people actually run. Take an illustrative Plan G premium of $170 a month, which is a planning assumption rather than a quote, since Texas premiums vary by carrier, county, age, and tobacco use. That is $2,040 a year, plus the $283 deductible, for a fixed medical cost of $2,323 no matter what happens. A $0-premium Advantage plan with a $5,421 cap costs less than that in a healthy year, possibly far less, and up to $5,421 in a bad one. Over a healthy decade, the Advantage enrollee comes out several thousand dollars ahead. Over a decade with two or three hard years, the gap closes or reverses. The arithmetic is not the interesting part, though. The interesting part is that the Medigap premium is the price of a fixed cost, and the Advantage cap is the price of a variable one, and which is worth more depends on your health in years you cannot see yet, from a position you may not be able to change.

What the low premium is paying for

A $0 premium is not free coverage. It is coverage financed differently. Medicare pays Advantage plans more per enrollee than it spends on comparable people in Original Medicare, about 14% more in 2026 according to the Medicare Payment Advisory Commission, and plans use the margin, plus the savings from managing care, to fund the extras and the low premiums. Two of those management tools are the ones that matter most for a 65-year-old choosing a plan they may hold at 85.

Networks. Nearly every Advantage plan restricts you to a network for full benefits, and 61% of enrollees are in HMOs that generally cover nothing out of network except emergencies. KFF’s analysis finds Advantage enrollees have access, on average, to about half the physicians available to Original Medicare beneficiaries in the same county. In Houston, Dallas, San Antonio, or Austin, that is a manageable constraint; the networks are large and there are dozens of plans to choose from. In the 200-plus Texas counties that are not one of those metros, plan counts drop sharply and networks thin with them, and a network that was fine when you lived in Fort Worth may not travel with you to a ranch outside Kerrville, or to a second home in Colorado, or to the specialist in Houston your local doctor wants you to see. Original Medicare with Medigap has no network and travels everywhere Medicare is accepted.

Prior authorization. In 2026, 99% of Advantage enrollees are in plans that require prior authorization for at least some services, and it clusters exactly where the money is: 97% of enrollees need it for inpatient hospital stays, 95% for skilled nursing facility care, 94% for Part B drugs, and 90% for home health. Original Medicare generally does not use it. In 2024, plans received nearly 53 million prior authorization requests and denied about 8% of them. Most denials that are appealed are overturned, but few are appealed and appeals take time, and the requests concentrate in the situations, a hospital discharge into rehab, a cancer drug, where time is what you do not have.

Neither of these is a reason to avoid Medicare Advantage. Plenty of people are well served by it, and for someone who values the extras, is comfortable inside a network, and wants a low fixed monthly bill, it can be the better fit. They are reasons to price the trade correctly: the premium you are not paying buys a network you may outgrow and an approval process you will meet at the worst moments.

The door that swings one way

Here is the structural fact that reorganizes the whole decision. Medicare Advantage plans must accept anyone with Parts A and B during an enrollment period, regardless of health. Medigap insurers must do the same only during specific windows. Outside those windows, in Texas and most other states, they can ask health questions, charge more, or decline you outright.

The main window is the six-month Medigap open enrollment that starts the month you are 65 or older and enrolled in Part B. Note what it keys off: Part B enrollment, not retirement. A 65-year-old who enrolls in Part B while still covered at work starts the clock then, and it will be long expired by the time they retire at 68 and actually want the supplement, which is one reason delaying Part B under employer coverage (using the special enrollment period later) can preserve the window rather than waste it. During it, every plan sold in your state is available to you at the same price a healthy applicant pays. One Texas wrinkle even inside the window: an insurer can impose a waiting period of up to six months before it covers a condition you were treated for in the prior six months, though prior creditable coverage such as an employer plan generally shortens or eliminates it. After the window closes, the guaranteed paths back to Medigap narrow to a short federal list. The two that matter most for this decision:

The trial right. If you enrolled in Medicare Advantage when you were first eligible at 65, you have 12 months to change your mind, leave the plan, return to Original Medicare, and buy any Medigap policy sold in your state without underwriting. A second version covers someone who dropped a Medigap policy to try Advantage for the first time: within 12 months they can get the same policy back from the same insurer if it is still sold, or a standardized alternative if not. Either way, the application must land within 63 days after the Advantage coverage ends, and the right is available once. Miss month 12 and month 14 looks entirely different.

Involuntary events. If your Advantage plan leaves the market or you move out of its service area, you get a guaranteed-issue right, exercised within 63 days, to buy a specific list of plans rather than any plan: in Texas, for anyone first eligible in 2020 or later, that list is Plans A, B, D, G (including the high-deductible version), K, and L. Choosing to leave a plan you dislike is not on the list.

What is not a Medigap right, and is widely mistaken for one, is the Medicare Advantage Open Enrollment Period from January 1 to March 31. That window lets an Advantage enrollee switch plans or drop back to Original Medicare with a standalone drug plan. It does nothing about the supplement. A 70-year-old who uses it to leave a plan lands on Original Medicare with a $1,736 hospital deductible and uncapped 20% coinsurance, and then discovers the Medigap application has health questions.

Texas adds no cushion here. A handful of states require Medigap insurers to accept applicants year-round or give existing policyholders an annual “birthday rule” window to switch carriers without underwriting. Texas has neither. Texas does allow doctors who do not accept Medicare assignment to bill excess charges of up to 15% over the approved amount, which is one reason Plan G, which covers them, tends to edge out Plan N here for people who want the full build. (Texas is expanding Medigap access for beneficiaries under 65 on Medicare due to ESRD or ALS under a 2025 law, with a guaranteed-issue period slated to run from October 15, 2026 through March 31, 2027; that is a separate population with its own rules.)

The asymmetry, then: at 65 in good health, both paths are open at the best price you will ever see. At 72 with a cardiac history, only one is. You can move from Medigap to Advantage in any fall enrollment period for the rest of your life. You can reliably move the other way for 12 months, and after that only if you are healthy enough to pass underwriting, which is precisely when you need the coverage least.

The 20-year question

The mistake we see most often is answering the wrong question. “Which is cheaper this year?” almost always points to Medicare Advantage, and for a healthy 65-year-old the savings are real. “Which would I want at 80?” is the decision that is actually being made, because the choice that is free to reverse now may not be reversible then. The research on how people actually choose is not encouraging: economists studying Medicare plan selection have consistently found that most enrollees pick plans that cost more than an alternative that would have covered them as well or better, often by hundreds of dollars a year, which is what happens when a long-horizon decision gets made on a premium comparison.

That reframing does not have one answer. It has a set of questions worth asking honestly in the window:

Where will you be? Two homes in two states, extended travel, grandchildren three states away, or a rural county with thin plan offerings all argue for coverage without a network. A settled life in one metro with a large, stable network argues less strongly.

Who are your doctors, and where is your hospital? If you already have specialists you intend to keep, or a preference for a particular academic medical center, the question is whether they are in the network today and what happens if they leave it, since plans redraw networks annually and you find out in the fall.

How do you want to pay for care? Some households would rather write one predictable check a month and never see a medical bill; that is the Medigap temperament. Others are comfortable with variability and would rather keep the premium and self-insure inside a cap; that is the Advantage temperament. Neither is wrong. Both should be chosen on purpose.

What does the cash flow look like? The Medigap premium is a fixed cost for the rest of your life and it rises with age. In a plan where the money is tight in the early years, that matters, and High-Deductible Plan G is worth a look: the same certainty above a $2,950 deductible, for a fraction of the standard premium. For a household where the premium is immaterial, the calculus simplifies to access and optionality.

What can the HSA pay? If you carried a health savings account into retirement, it can reimburse Part B, Part D, and Medicare Advantage premiums tax-free, but not Medigap premiums. That is a real, if modest, thumb on the scale, and we covered the mechanics in the HSA article.

What about the things neither path covers? Dental, vision, and hearing are the benefits Advantage plans advertise hardest, and Original Medicare with Medigap covers none of them. But the benefits usually carry annual caps in the low thousands and their own networks, and a standalone dental plan is purchasable on the Original Medicare side. Custodial long-term care is covered by neither path; that is a separate funding decision with its own article.

One more timing note for the early retiree: if you are bridging from an ACA marketplace plan to Medicare at 65, the Medigap window opens with Part B, not with the end of the marketplace plan, and the two calendars should be lined up in advance so the six months are not spent on the wrong question.

How we think about it

We lean toward treating the Medigap versus Medicare Advantage choice as a one-way-door decision, not an annual one, and modeling it on the household’s actual geography, doctors, health trajectory, and cash flow rather than on this year’s premium. In practice that means we want the decision made deliberately inside the six-month window, when every option is available at its best price, and we want the household to know which door it is walking through.

For clients who choose Original Medicare with Medigap, we lean toward Plan G or its high-deductible version as the starting point, with Plan N as a considered alternative when the premium difference is meaningful and excess charges are unlikely to matter. For clients who choose Medicare Advantage, we want the trial-right expiration date on the calendar the day the plan starts, a clear-eyed read of the network against the doctors and hospitals they actually use, and an annual review each fall, because the plan you chose can change its network, its cap, and its extras every January, and you cannot.

And we lean, when the household is on the fence and the premium is affordable, toward preserving the option: it is easier to leave Medigap for Advantage later than to come back, and a decision that keeps the better set of future choices open is worth a fixed premium to many families, though certainly not to all. The right answer is the one the household would still be glad of at 80, which, as with every planning decision, is a question about what the money is for.

Common Questions

Which is better, Medigap or Medicare Advantage?

Neither is better in the abstract; they price risk differently. Medicare Advantage usually wins on premium and extras for a healthy enrollee who is comfortable inside a network. Original Medicare with Medigap wins on provider access, cost predictability, and keeping future options open, at the price of a lifelong premium. Because returning to Medigap after the first year in Advantage can require medical underwriting, the choice is best made on a long view: your geography, doctors, health trajectory, and cash flow, not this year’s premium.

Can I switch from Medicare Advantage back to Medigap later?

You can always return to Original Medicare during an enrollment period. Getting a Medigap policy afterward is the hard part. Outside your one-time six-month Medigap open enrollment, the federal trial right (12 months after first joining Advantage at 65, or after dropping Medigap to try Advantage for the first time), and a short list of involuntary events such as your plan leaving the market, Medigap insurers in Texas can use medical underwriting to charge more or decline you.

What does Medicare Advantage cost in 2026 if I get sick?

Every plan must cap in-network out-of-pocket medical costs at or below $9,250 in 2026, and $13,900 for combined in- and out-of-network care in PPOs. The average plan cap is $5,421 in-network. Drug costs are capped separately at $2,100. Premiums do not count toward either cap.

What does Medigap Plan G cost in 2026 if I get sick?

The $283 Part B deductible, then nothing for Medicare-covered medical care. Plan G pays the $1,736 Part A deductible, the 20% Part B coinsurance, and excess charges. Drugs run through your Part D plan, capped at $2,100. The trade is a monthly premium that varies by carrier, age, and county and rises over time.

Does IRMAA apply if I choose Medicare Advantage?

Yes. IRMAA is a surcharge on the Part B premium and on Part D coverage, and it applies regardless of whether you get those benefits through Original Medicare or a Medicare Advantage plan. A plan that advertises a Part B premium rebate reduces the standard premium by that amount; it does not remove the surcharge.

Is the January to March Medicare Advantage Open Enrollment Period a way back to Medigap?

No. That window lets Advantage enrollees change plans or return to Original Medicare with a standalone Part D plan. It does not create a right to buy Medigap without underwriting. Only the six-month open enrollment, the 12-month trial right, and specific guaranteed-issue events do that.

Does Texas have a Medigap birthday rule?

No. Texas does not provide an annual window to switch Medigap carriers without health questions. Outside your initial six-month open enrollment and the federal guaranteed-issue rights, changing Medigap policies in Texas generally requires underwriting.

What is High-Deductible Plan G?

The same coverage as standard Plan G, but the policy pays nothing until you have paid $2,950 of Medicare-approved costs in 2026 (the Part B deductible counts toward it). Premiums are substantially lower. It suits households that want a firm ceiling on medical costs but would rather self-insure the first few thousand dollars.

Can my HSA pay my Medigap premium?

No. After 65, an HSA can reimburse Part A, Part B, Part D, and Medicare Advantage premiums tax-free, but Medigap premiums are excluded. It can still pay Medicare deductibles, copays, and coinsurance on either path.