Medicare Advantage vs Medigap 2027: Which Plan Costs Less?

Medicare Advantage vs Medigap 2027: Every fall, millions of Americans on Medicare face the same question: stick with what they have, or switch? The choice between Medicare Advantage and Medigap is one of the biggest financial decisions in retirement, because the two work in completely different ways. One typically offers a low monthly premium but charges you when you use care. The other costs more every month but leaves you with very little to pay at the doctor or hospital. Which one is “cheaper” depends on how much care you use, where you live and what you can afford if you have a bad year.

The 2027 numbers add a new twist. CMS says the average Advantage premium falls to $12.00 a month, down from $14.37 in 2026. That sounds like a bargain. But the highest in-network out-of-pocket limit a plan can set rises to $9,850, up from $9,250. So the headline premium is dropping while the worst-case bill is going up, and it is easy to look at only one of those numbers.

Medicare Advantage vs Medigap

Timing also matters. CMS usually announces the next year’s Part B figures in mid-November, before Annual Enrollment closes on December 7. As of the latest reports, the 2027 Part B premium, Part B deductible and Part A amounts are still expected from CMS in mid-November. That means you may need to choose a plan before you see every final number.

This guide uses only confirmed 2027 figures and clearly labels anything that is still a projection. It covers what each option costs, a side-by-side example, who tends to save money with each, the key deadlines, an official sources table and answers to common questions.

Costs that apply to both options

You pay the Part B premium whichever route you take. The Trustees Report projects a 2027 standard Part B premium of about $209.50 a month, up from the confirmed 2026 premium of $202.90. This is a projection, not the official figure. Because it is the same under both options, it does not change which one is cheaper. It only raises the baseline.

What Advantage costs in 2027?

The figures in the table come from the CMS 2027 announcements as reported by Medicare plan guides. Several points matter:

• Most plans cost little in premiums. Per KFF’s 2026 data, 75% of people in individual Advantage plans with drug coverage pay no plan premium beyond Part B.
• Averages hide big differences. The $12 figure is a national average. In Connecticut, for example, CMS’s fact sheet puts the average premium at $25.31 in 2027, up from $16.89 in 2026. Your county’s plans may look very different.
• The real limit is often lower than the maximum. One analysis reports that the median in-network limit across plan offerings rose from $6,500 to $7,100, and half of plan offerings now cap a bad year above $7,000. That analysis is from a smaller outlet, so check your own plan documents.
• The limit covers medical care only. Premiums and Part D drug costs do not count toward it.
• Scale. CMS projects about 34 million people, or 47.4% of Medicare, will be in Medicare Advantage in 2027.

What Medigap costs in 2027?

Medigap is private insurance that pays some or all of what Original leaves behind. Premiums are set by insurers, so no national 2027 average has been published by CMS. Here is what is confirmed:

These come from CMS notices as reported by Guide. For standard Plan G, a 2026 estimate puts the average premium at roughly $142 to $180 a month, and Plan G covers everything except the Part B deductible. That range is a 2026 figure from an insurance agency and is not an official CMS average. 2027 premiums will vary by age, ZIP code, gender (in some states) and insurer.

Medigap premiums range from about $32 to $550 a month, and most people pay between $100 and $300 for mid-level plans. Medigap does not cover prescription drugs, so you also need a separate Part D plan. CMS projects the average standalone Part D premium will go from $35.09 in 2026 to about $36.00 in 2027.

Side-by-side: which costs less?

This is my own illustration, not an official figure. It assumes the projected Part B premium of $209.50, an average Advantage premium of $12, a Plan G premium of $150 a month (the middle of the 2026 range) and an average Part D premium of $36 for the Medigap route. It ignores drug copays and the Part A deductible. Your actual costs will differ.

What the table shows?

• The Medigap route costs roughly $2,380 more per year in fixed premiums in this example.
• Advantage stays cheaper as long as your out-of-pocket medical costs stay below about $2,400.
• If a serious illness pushes you to your plan’s limit, Advantage can cost thousands more than Medigap.
• Medigap’s total stays nearly flat, which makes budgeting easy.

Who usually saves money with each?

Advantage may fit you if:

• You are generally healthy and use little care.
• You want a low monthly premium and can afford a bad year up to the plan’s limit.
• You are comfortable using a network (HMO or PPO) and getting prior authorization for some services.
• You like extras such as dental, vision or hearing, which many plans include.

Medigap may fit you if:

• You use care often or have a chronic condition.
• You want to see any provider that accepts Medicare, including out-of-area specialists.
• You value knowing your yearly cost in advance.
• You travel a lot or live in more than one state.

Rules that can trap you

These are long-standing federal rules. Confirm the details for your state at Medicare.gov or with your State Health Insurance Assistance Program (SHIP).

• Medigap approval can be harder later. If you buy Medigap outside your first window or certain special situations, insurers in most states can ask health questions and may charge more or decline you. Many people who start on Advantage find it hard to switch to Medigap later.
• Medigap premiums can rise. The Advantage cap and Medigap premium changes are among the points that insurers and guides were corrected to explain more carefully in late 2026. Ask the insurer how the price is set: by your age at purchase, your current age, or a community-wide rate.
• Medicare Advantage networks and plans change every year. Insurers can enter or leave counties, so a doctor in the network this year may not be next year.
• You cannot combine the two. Medigap does not work with a Advantage plan.

Key dates

The annual enrollment dates are confirmed in current reporting. Annual Enrollment closes on December 7. The January to March window is a standing rule.

Official sources and links

Frequently asked questions