All Medicare cost-sharing figures reflect the 2026 plan year as published by the Centers for Medicare & Medicaid Services; Medigap premium ranges are market estimates and are not federally set. This article is educational and is not insurance advice.
TL;DR — Quick Verdict
- Medigap Plan G costs roughly $1,440 to $4,440 per year in premiums on top of the $202.90 monthly Part B premium; the average Medicare Advantage supplemental premium is $15 per month, or $180 per year.
- The premium gap runs $1,260 to $4,260 annually — but Advantage exposes you to an in-network out-of-pocket maximum that averages $5,421 and can legally reach $9,250 in 2026.
- In a healthy year, Advantage wins by $1,300 to $4,300. In a year with a major hospitalization plus rehab, Medigap Plan G frequently wins by $1,500 or more.
- Original Medicare has no out-of-pocket cap at all: the Part A deductible is $1,736 per benefit period, not per year, and can be charged more than once in twelve months.
- Buy Medigap during your six-month Medigap open enrollment window if you can afford the premium and want cost certainty; choose Advantage if cash flow matters more than worst-case exposure and your providers are in network.
Three quarters of Medicare Advantage enrollees pay nothing beyond their Part B premium for plan coverage, according to KFF’s 2026 analysis. That single statistic drives more Medicare enrollment decisions than any other — and it is the most misleading number in the entire program, because premium is only one of two prices you pay for Medicare coverage. The other is exposure.
Medigap and Medicare Advantage are not two flavors of the same product. They are opposite financial structures. Medigap converts unpredictable medical costs into a fixed monthly bill. Advantage does the reverse: it minimizes the bill and hands you a capped but real risk of five-figure spending. UnitedHealthcare, Humana, Aetna, and Blue Cross Blue Shield affiliates sell both product types, often to the same customer in the same ZIP code, at wildly different prices.
This analysis models total annual cost — premiums plus cost-sharing — across three health scenarios using verified 2026 CMS figures. You will see where each structure breaks even, what the crossover point actually is in dollars, and which enrollee profiles land on which side of it.
2026 Baseline Costs: What Both Paths Share
Every enrollee in both structures pays the Part B premium. CMS set that at $202.90 per month for 2026, a 9.7% increase from $185.00 in 2025 — one of the steepest single-year jumps in a decade. Higher earners pay more; the IRMAA surcharge rules and reduction requests raise the total to between $284.10 and $689.90 monthly once modified adjusted gross income exceeds $109,000 for single filers or $218,000 for joint filers. Roughly 8% of beneficiaries land in those tiers.
That premium is unavoidable and identical on both paths. It is also the reason a $0-premium Advantage plan is never actually free — a point covered in more depth in our breakdown of Part B premium, IRMAA tiers, and appeals.
Where the two paths diverge is everything underneath.
Source: Centers for Medicare & Medicaid Services 2026 Parts A & B premium and deductible notice, published in the Federal Register; Medicare Advantage limit from KFF analysis of CMS plan data.
What Determines Your Medigap Premium — and Why Quotes Vary 200%
Medigap benefits are federally standardized. Plan G from a small regional carrier pays exactly what Plan G from UnitedHealthcare pays. Price, however, is set by the carrier and regulated at the state level, which produces spreads that shock most first-time shoppers.
Market surveys of 2026 Plan G premiums for a 65-year-old non-smoker put the typical national figure near $160 to $220 per month, with state averages running from roughly $120 in low-cost states such as North Dakota and New Mexico to $350 or more in New York. Period-specific carrier filing data is not published in a single federal repository, so treat these as market estimates rather than official rates and pull a live quote for your ZIP code before budgeting.
Three variables drive most of the spread. The first is the rating method — attained-age policies start cheap and climb every birthday, while community-rated policies charge everyone the same regardless of age. Our comparison of Medigap premium rating methods compared walks through the long-run math, which frequently reverses the apparent winner over a twenty-year retirement.
Second is plan letter. Plan N trades a lower premium for office-visit copays and excess-charge exposure, a tradeoff detailed in our Supplement Plan G vs Plan N cost comparison. Third is timing: outside your six-month Medigap open enrollment window, carriers in most states can medically underwrite you, which means a diabetes or cancer history can price you out entirely or trigger a flat decline.
Medigap Plan G vs Medicare Advantage: Which Costs Less in 2026?
Modeling total annual cost requires holding one variable fixed. Below, both paths carry the $202.90 monthly Part B premium and identical drug coverage, so the table isolates the difference that the coverage structure itself creates. The Medigap column assumes a $180 monthly Plan G premium plus a $34.50 standalone Part D plan. The Advantage column assumes the KFF-reported $15 average supplemental premium with integrated drug coverage.
Modeled by Real Cost Report using 2026 cost-sharing amounts from the Centers for Medicare & Medicaid Services and average plan design data from KFF. Medigap premium assumption: $180/month.
The moderate row is the one worth staring at. Both structures land within single dollars of each other around $5,300 — that is the crossover. Below roughly $2,500 in annual claims exposure, Advantage wins on price. Above it, Medigap’s fixed premium starts buying real protection.
Verdict
Medicare Advantage is cheaper for the median enrollee in the median year — by roughly $2,200. Medigap Plan G is cheaper in any year involving inpatient care, and dramatically cheaper in a catastrophic year. The correct question is not which costs less on average, but whether a $6,500 swing in a bad year is a manageable event or a portfolio-damaging one. Retirees drawing down fixed assets should weight the worst case heavily; those with substantial liquid reserves can rationally take the premium savings.
The Benefit Period Trap in Original Medicare
Most cost comparisons treat the $1,736 Part A deductible as an annual figure. It is not. CMS charges it per benefit period, and a new benefit period begins any time you are admitted after 60 consecutive days without inpatient or skilled nursing care.
Consider a real sequence: a February hip fracture with a five-day admission, discharge to home health, then a September fall producing a second admission. That is two benefit periods and $3,472 in Part A deductibles alone — before any Part B coinsurance, before any skilled nursing days. Medigap Plan G absorbs both deductibles entirely. Under Advantage, the plan substitutes its own per-day hospital copay structure, which typically runs $200 to $400 daily for the first several days and counts toward the plan’s out-of-pocket limit.
Skilled nursing exposes the gap further. Original Medicare covers days 1 through 20 in full, then charges $217 per day for days 21 through 100. A 60-day rehab stay generates $8,680 in coinsurance that Plan G pays and that no cap in Original Medicare limits. Our analysis of the Part A deductible and benefit period gaps models several multi-admission sequences in detail.
Advantage plans cap this exposure — that is their genuine structural advantage, and it is covered further in our guide to Advantage out-of-pocket maximum coverage. But the cap sits at $9,250 in-network and $13,900 combined in-network and out-of-network for 2026, and those dollars are real.
What Most People Get Wrong
Four errors account for the majority of expensive Medicare mistakes, and three of them are irreversible.
Mistake one: treating the switch back to Medigap as always available. Enrollees choose Advantage at 65, develop a chronic condition at 71, and discover that returning to Medigap requires medical underwriting in most states. Consequence: a decline, or a rated premium 40% above standard. Correct action: understand your state’s guaranteed-issue rules before the initial election, and review the annual enrollment switching rules that govern what you can and cannot change each fall.
Mistake two: comparing plans on premium alone. A $0-premium plan with a $9,250 out-of-pocket limit is more expensive in a bad year than a $50-premium plan capped at $3,500. Consequence: enrollees optimize the one number that matters least. Correct action: compare the limit, the specialist copay, and the hospital per-day schedule together — the approach laid out in comparing Advantage plans beyond premium.
Mistake three: assuming the out-of-pocket limit covers everything. It does not. The limit applies only to services Parts A and B would otherwise cover. Prescription drugs run through a separate Part D cap of $2,100, and supplemental dental, vision, and hearing benefits sit entirely outside both — a gap detailed in our review of dental, vision, and hearing exclusions. A worst-case Advantage year is $9,250 plus $2,100 plus premiums, not $9,250 total.
Mistake four: ignoring the Part D late enrollment penalty. Medigap policies never include drug coverage, so Plan G buyers must purchase a standalone Part D plan separately. Skipping it because you take no medications triggers a permanent penalty of 1% of the national base beneficiary premium — $38.99 in 2026 — for every month you went without creditable coverage. Correct action: enroll in the cheapest available plan even at zero current drug use, and review enrollment deadlines and late penalty costs before your initial election period closes.
Who Should Choose Which
Structure the decision around four conditions rather than a single preference.
Choose Medigap Plan G if you meet most of these: you can absorb $150 to $250 monthly in premium without straining cash flow; you travel or split residence between states; you have or expect a chronic condition requiring specialist access; or you want zero surprise medical bills. Plan G’s fixed cost is not the cheapest option — it is the most predictable one, and predictability has real value in a drawdown portfolio. Enrollees managing ongoing conditions should read our comparison of Advantage vs Original Medicare for chronic conditions before committing.
Choose Medicare Advantage if: your income is modest and the $1,800 to $2,600 annual premium difference materially affects your budget; your physicians and preferred hospital are firmly in network; you value the dental, vision, hearing, and fitness benefits that Original Medicare excludes; and you have liquid savings sufficient to absorb a $9,250 year without borrowing.
Two situations demand separate analysis entirely. Federal retirees weighing coverage should start with our FEHB vs Part B analysis for federal employees, since FEHB coordination changes the arithmetic completely. Anyone still working past 65 with group coverage should review Medicare coordination with employer coverage before enrolling in anything, because the wrong sequence forfeits the Medigap open enrollment window permanently.
One rule holds regardless of profile: your six-month Medigap open enrollment window, which opens the month you turn 65 and are enrolled in Part B, is the only period in which every carrier in your state must sell you any plan at the standard rate. It does not reopen.
Frequently Asked Questions
Can I switch from Medicare Advantage to Medigap later?
You can switch during the Annual Enrollment Period, October 15 to December 7, but carriers in most states can medically underwrite your Medigap application and decline you. Limited exceptions exist: a trial right applies if you joined Advantage at 65 and switch back within twelve months. Fifteen states operate birthday or annual guaranteed-issue rules. Verify your state’s rules with your state department of insurance before assuming the option exists.
Does Medigap cover prescription drugs?
No. Medigap policies sold since 2006 exclude drug coverage entirely, so Plan G enrollees must buy a standalone Part D plan. CMS projects the average standalone Part D premium at $34.50 per month for 2026, with a maximum allowable deductible of $615 and an annual out-of-pocket cap of $2,100. Most Medicare Advantage plans integrate drug coverage into a single premium instead.
Why did my Part B premium increase so much for 2026?
CMS set the 2026 standard Part B premium at $202.90, up $17.90 or 9.7% from $185.00 in 2025. The agency attributed the increase to projected price growth and higher assumed utilization consistent with historical experience. CMS also stated the increase would have been roughly $11 higher per month without policy changes finalized in the 2026 Physician Fee Schedule addressing skin substitute spending.
What is the average Medicare Advantage out-of-pocket maximum?
KFF reports the enrollment-weighted average in-network limit at $5,421 for 2026 — well below the $9,250 maximum CMS allows. HMOs average $4,636 and PPOs average $6,592. About 9% of enrollees, roughly 1.8 million people, are in plans set at the full $9,250 maximum. Check your specific plan’s Evidence of Coverage rather than relying on the average.
How We Researched This Article
Every federally determined figure in this analysis was pulled from primary sources published by the Centers for Medicare & Medicaid Services. The Part B standard premium of $202.90, the $283 Part B deductible, and the underlying monthly actuarial rates were verified against the CMS notice published in the Federal Register on November 19, 2025. Part A figures — the $1,736 deductible, $434 daily coinsurance for hospital days 61 through 90, and $217 daily skilled nursing coinsurance for days 21 through 100 — were confirmed against the CMS release of November 14, 2025 and cross-checked against summaries published by the Medicare Rights Center. IRMAA thresholds and the $284.10 to $689.90 adjusted premium range were verified through the Railroad Retirement Board, which republishes the CMS determination.
Medicare Advantage plan design data — the $9,250 maximum in-network out-of-pocket limit, the $13,900 combined limit, the $5,421 enrollment-weighted average, and the $15 average supplemental premium — comes from KFF’s 2026 analysis of the CMS plan benefit package files, covering 21.3 million beneficiaries in individually available plans and excluding special needs and employer group plans.
Medigap premiums required different handling. No federal agency publishes a national Plan G rate table; premiums are filed carrier-by-carrier with state insurance departments and are not aggregated into a single primary source. Period-specific and carrier-specific data was therefore unavailable at publication. We report a defensible range — roughly $120 to $370 monthly at age 65 — drawn from multiple independent market surveys, and used $180 monthly as the modeling assumption because it sits near the midpoint of published national averages. Readers should replace it with an actual quote for their ZIP code, plan letter, tobacco status, and gender.
All scenario costs are modeled, not measured. They apply verified 2026 cost-sharing amounts to constructed utilization patterns and assume the enrollee stays in network throughout the year, that all services are Medicare-covered, and that no second benefit period is triggered in the severe scenario. Real outcomes will vary with plan design, provider participation, and prior authorization decisions. Research was last conducted in July 2026. All figures were verified against named primary sources before publication.