Overview: Medicare Advantage is an alternative way to receive Medicare benefits through a private insurer, and comparing it to Original Medicare is one of the most heavily tested topics in this subject area.

How Medicare Advantage Works

When you enroll in Medicare Advantage (Part C), you do not leave Medicare — you still pay your Part B premium and are still a Medicare beneficiary. Instead of the federal government paying your claims directly, a Medicare-approved private insurance company agrees to provide all your Part A and Part B benefits in exchange for a fixed monthly payment from Medicare. Most Advantage plans also bundle Part D prescription drug coverage, creating an "all-in-one" plan.

The federal government sets minimum coverage standards; anything Original Medicare covers, a Medicare Advantage plan must also cover. In return, plans gain flexibility to design their cost-sharing structures, provider networks, and extra benefits as they see fit — within CMS-established limits.

Original Medicare vs. Medicare Advantage: The Key Differences

Feature	Original Medicare	Medicare Advantage (Part C)
Administration	Federal government	Private insurers approved by CMS
Provider access	Any provider nationwide that accepts Medicare; no referrals needed	Restricted network (HMO or PPO); HMOs usually require referrals
Cost-sharing structure	Standardized deductibles + 20% coinsurance	Plan-designed copays (e.g., $15/visit, $350/hospital day)
Out-of-pocket maximum	None — unlimited exposure	Mandatory annual cap (in-network: $9,250 in 2026)
Extra benefits	None (no routine dental, vision, hearing)	Often includes dental, vision, hearing, gym memberships
Medigap compatibility	Can purchase a Medigap plan	Cannot purchase a Medigap plan
Prescription drugs	Require a separate Part D plan	Usually bundled into the plan

The out-of-pocket maximum is arguably the most important structural difference. Under Original Medicare, a beneficiary with a serious illness could face tens of thousands of dollars in unrestricted 20% coinsurance. Under Medicare Advantage, once a beneficiary's spending on covered Part A and Part B services hits the plan's maximum out-of-pocket limit, the plan pays 100% of remaining covered costs for the calendar year. This cap does not apply to Part D drug costs, which are governed separately.

The tradeoff is network restriction. A Medicare Advantage enrollee who lives in a rural area, travels frequently, or has a long-standing specialist relationship may find that their preferred providers are out-of-network. Prior authorization requirements — where the plan must approve a test or procedure before it is covered — are more common in Medicare Advantage than in Original Medicare.

FAQ

Can I have both Medicare Advantage and a Medigap policy?
No. Federal law prohibits insurers from selling a Medigap policy to someone enrolled in Medicare Advantage. The two approaches to supplementing Original Medicare are mutually exclusive. If someone disenrolls from Medicare Advantage and returns to Original Medicare, they can then apply for Medigap — but may face underwriting and could be declined for pre-existing conditions depending on state rules.

Do I still pay the Part B premium with Medicare Advantage?
Yes. You are always responsible for your Part B premium regardless of how you receive Medicare benefits. Some Medicare Advantage plans offer a "Part B premium reduction" benefit that helps offset this cost, but you never fully eliminate the Part B premium requirement.