Medigap vs. Medicare Advantage
| Feature | Medigap | Medicare Advantage |
|---|---|---|
| How it works | Supplements traditional Medicare; fills cost-sharing gaps | Replaces traditional Medicare; provides all Part A and B benefits |
| Provider choice | Any Medicare-accepting provider | Network-based; in-network required |
| Cost-sharing | Low or $0 for covered services | Copays and deductibles; lower premiums |
| Prescription drugs | Separate Part D plan required | Usually included |
| Cost to employer | Higher premium; lower claims risk | Lower premium; managed care model |
Employer Group Waiver Plans
An Employer Group Waiver Plan (EGWP) is a Medicare Advantage plan offered by an employer to its retirees. EGWPs allow employers to provide Medicare Advantage benefits to retirees while receiving a subsidy from CMS. EGWPs are a cost-effective way for employers to provide retiree health benefits — typically 20–30% less expensive than traditional Medigap plans.
Retiree Preferences
IQ Insight
Retiree preferences vary significantly. Retirees who have established relationships with specific providers often prefer Medigap — which allows them to see any Medicare-accepting provider. Retirees who are cost-conscious and comfortable with network restrictions often prefer Medicare Advantage. Survey your retirees before making major changes to retiree benefits design.