The One Framing That Matters: Premium Is Not Total Cost
A $0-premium Medicare Advantage plan is not a free plan. In a heavy-use year you pay copays and coinsurance up to the plan in-network maximum out-of-pocket, expected up to about $9,850, and the plan year resets every January. A Medigap policy charges a visible monthly premium and then covers most of the cost-sharing Original Medicare leaves behind, so a bad health year costs roughly the premiums you already budgeted.
Run your comparison in three columns: annual premium, expected cost in a normal year for you, and worst-case cost in a bad year. The plan that wins column one often loses column three. Which column matters more depends on your cash reserves and how much cost uncertainty you can absorb.
How the Two Paths Actually Work
Medicare Advantage (Part C). A private insurer replaces Original Medicare. You stay in a network of doctors and hospitals, pay copays as you go, and need prior authorization for many services. In exchange you often get a $0 or low additional premium, an annual out-of-pocket cap Original Medicare does not have, and bundled extras like dental, vision, or drug coverage in one card.
Original Medicare plus Medigap. The government program pays first, a private supplement policy pays most of the rest. There is no network to check: any provider nationwide who accepts Medicare accepts you. There is generally no prior authorization gauntlet from a plan. You pay for that certainty with a separate Medigap premium plus a standalone Part D drug plan.
The 2027 Numbers to Plan Around
Final for 2027: the Part D maximum deductible is $700, and the Part D out-of-pocket cap is $2,400. Those are set, so build them into your estimate as fixed.
Not final: the Part B premium. Current projections cluster roughly between $209.50 and $221 depending on the source, and CMS has not published the confirmed figure. Treat any exact Part B number you see this fall as a projection until CMS confirms it, and leave slack in your budget rather than planning to the dollar.
Also know where you sit on IRMAA, the income-related premium surcharge. The first IRMAA thresholds are $113,000 single and $226,000 married. Cross that line and your Part B and Part D premiums rise, which changes the math on every plan equally but hits hardest if you were counting on a tight premium.
For Medicare Advantage, plan on the in-network maximum out-of-pocket reaching up to about $9,850. That cap is your worst case for covered in-network services, and it is the number to compare against a year of Medigap premiums.
Network and Prior Auth vs Nationwide Access
This is the trade most people feel day to day. Medicare Advantage asks: are your doctors and hospital in this network, this year? Networks change annually, and leaving the network usually means paying far more or everything. Medigap asks nothing: if the provider accepts Medicare, you are covered, in any state.
Prior authorization cuts the same way. Advantage plans commonly require approval before procedures, imaging, and stays, which adds delay and denial risk even when care is eventually approved. Original Medicare with Medigap largely skips that layer. If you travel, snowbird, or see specialists across systems, nationwide access usually outweighs bundled extras. If your care is local and your network is stable, the Advantage trade can be reasonable.
The Medigap Underwriting Window Warning
When you first enroll in Part B at 65, you get a one-time Medigap open enrollment window, typically six months, when insurers must sell you a policy at standard rates no matter your health history. That window does not come back.
Miss it, and in most states a later switch into Medigap means medical underwriting: health questions, higher premiums, or an outright no. A few states have additional protections, but do not count on yours being one of them without checking. This asymmetry is why the first choice matters more than the annual one. Leaving Medigap for Advantage is easy every fall. Coming back can be medically gated.
6-Step Comparison Checklist
1. List your non-negotiables. Your doctors, hospital, prescriptions, and any planned procedures next year. A plan that excludes your cardiologist loses, whatever the premium.
2. Check every provider against the network. For each Advantage plan, verify each doctor and facility is in-network for next year, not this year, and note which would go out-of-network.
3. Price your prescriptions under each option. Run your exact drug list through each plan formulary or Part D plan. For 2027, remember the Part D deductible maxes at $700 and out-of-pocket caps at $2,400.
4. Build the three-column cost estimate. Annual premium, expected normal-year cost, worst-case cost (Advantage in-network cap up to about $9,850 vs Medigap premiums plus Part D exposure). Add your IRMAA tier if you are near $113,000 single or $226,000 married.
5. Weigh the window. If you are in or near your first Part B enrollment, price Medigap now while guaranteed issue protects you. If you already hold Medigap, treat dropping it as close to one-way.
6. Decide before December 7. Make the call inside the October 15 to December 7 Annual Election Period so the change takes effect January 1. Set a reminder for next fall to re-check networks and formularies, because both change yearly.
Frequently Asked Questions
What is the difference between Medicare Advantage and Medigap?
Medicare Advantage (Part C) replaces Original Medicare with a private plan that has its own network, copays, prior authorization, and an annual in-network out-of-pocket maximum expected up to about $9,850. Medigap is a supplement on top of Original Medicare: you pay an extra premium and the policy covers most of the remaining cost-sharing, with nationwide access to any provider who accepts Medicare.
When is Medicare open enrollment?
The Annual Election Period runs October 15 through December 7. Changes made then take effect January 1. Outside that window you generally need a Special Enrollment Period to switch.
Why does the Medigap underwriting window matter?
At first Part B enrollment you get a one-time window, typically six months, when insurers must accept you at standard rates regardless of health. Miss it, and in most states you can be medically underwritten later, meaning higher premiums or denial.
Is the cheapest premium the cheapest plan?
Usually not. A $0-premium Advantage plan can cost more in a heavy-use year through copays up to its cap, while a Medigap premium buys predictability. Compare premium plus expected copays plus the worst-case cap.
What are the key 2027 Medicare numbers?
For 2027 the Part D maximum deductible is $700 and the Part D out-of-pocket cap is $2,400, both final. The Part B premium is still a projection, roughly $209.50 to $221 by source, pending CMS confirmation. IRMAA first thresholds are $113,000 single and $226,000 married.
Plan the Cash Side
Whichever path you pick, the premium lands in a monthly budget. Lay it out with our budget planner, sanity-check take-home figures with the salary converter, and run percentage math on copays and caps with the percentage calculator.
Disclaimer: This guide is educational information only, not insurance, medical, or financial advice. Plan details, networks, and premiums change yearly and vary by state and ZIP code. Confirm current figures at Medicare.gov and with a licensed agent or your State Health Insurance Assistance Program before enrolling.