What is the Biggest Difference Between Original Medicare and Medicare Advantage?

October 21, 2023

Medicare and Medicare Advantage provide health coverage options for seniors but have important differences. Understanding the key distinctions can help you choose the right program. This article explores the biggest differences when comparing Original Medicare vs Medicare Advantage.

Original Medicare

Original Medicare is the federal program consisting of Part A hospital coverage and Part B outpatient coverage. It offers broad access to doctors accepting Medicare nationwide without restrictive networks.

Medicare Advantage also

Medicare Advantage Plans are private insurance options that provide Part A and Part B benefits. Some types include HMOs, PPOs, and PFFS plans. Many offer extra benefits not covered by Original Medicare coverage.

Difference Between Original Medicare and Medicare Advantage

A major difference is that original Medicare provides coverage directly while Medicare Advantage involves private insurers managing your benefits. Key differences include:

Provider networks – Original Medicare allows you to see any doctor accepting Medicare. Medicare Advantage Plans also have more limited networks.
Out-of-pocket costs – Original Medicare has higher deductibles but Medicare Advantage may have copays for services.
Prescription drugs – Only some Medicare Advantage Plans include drug coverage. Original Medicare does not cover drugs.
Travel coverage – Original Medicare covers you nationwide while Medicare Advantage has regional provider networks.

Choosing Between Original Medicare and Medicare Advantage

When choosing between the two, consider factors like your health needs, budget, if you want drug coverage, and whether you require broad provider access or are comfortable with an HMO network.

Traditional Medicare

Traditional Medicare refers to Original Medicare Parts A and B which provides coverage directly from the federal government. It offers the broadest access to providers.

Medicare and a Medicare Advantage Plan

You cannot be enrolled in Original Medicare and a Medicare Advantage Plan at the same time. You must choose one or the other for your coverage.

Going with Original Medicare

Reasons to choose Original Medicare include the freedom to see any doctor accepting Medicare nationwide, lower overall out-of-pocket costs with supplemental coverage, and less red tape accessing care.

Medicare Parts A and B

Original Medicare consists of Part A hospital/inpatient coverage and Part B outpatient/doctor visit coverage. Parts A and B together make up Original Medicare.

Medicare Supplement

Medigap policies help pay costs and gaps in Original Medicare like deductibles and coinsurance. Medicare Supplements do not work with Medicare Advantage Plans.

Many Medicare Advantage Plans Are Offered

There are many Medicare Advantage Plans to choose from including regional and national options from insurers like United Healthcare, Humana, and Blue Cross Blue Shield companies.

Switching from Original Medicare to Medicare Advantage

You can switch from Original Medicare to a Medicare Advantage Plan during open enrollment from October 15 to December 7 each year for coverage starting January 1.

Medigap Policy

A Medigap policy is supplemental insurance that pays for Original Medicare out-of-pocket costs like deductibles and copays. Medigap only works with Original Medicare.

Medicare vs. Medicare Advantage

Original Medicare covers care directly nationwide but has gaps and no out-of-pocket cap. Medicare Advantage involves private insurers and restricts networks and providers but has capped spending.

Extra Benefits

Medicare Advantage Plans often include extra benefits like dental, vision, and gym memberships. Original Medicare has no additional benefits beyond hospital and outpatient medical coverage.

Paying a Premium

With Original Medicare you pay a premium for Part B coverage. For Medicare Advantage, you pay the Part B premium plus an additional premium for the private plan.

Types of Medicare Advantage Plans

Major Medicare Advantage Plan types include HMOs, PPOs, PFFS plans, and Special Needs Plans. Each has different networks, costs, and coverage rules.

Primary Care

Having a primary care doctor is important for managing your care. Medicare Advantage HMOs may require you to choose an in-network PCP while Original Medicare has no network restrictions.

Enrolled in Original Medicare

You are automatically enrolled in Original Medicare Parts A and B when you turn 65 and are receiving Social Security benefits. You can opt out of Part B if you have other coverage.

Medicare Advantage Plans Can Also Offer

In addition to medical coverage, many Medicare Advantage Plans include prescription drugs, dental, vision, hearing, and fitness benefits.

Offered by Original Medicare

Original Medicare covers hospital stays, doctor visits, preventive services, medical equipment, and supplies. It does not cover vision, dental, hearing aids, or prescription medications.

Annual Out-of-Pocket Limit

Most Medicare Advantage Plans cap your annual out-of-pocket spending for covered medical services. Original Medicare does not have an out-of-pocket limit.

Considering When Choosing Between Original and Medicare Advantage

Key considerations include provider access, networks, out-of-pocket costs, drug coverage, and extra benefits. Your preferences and health needs should drive the decision.

Private Health Plans

Medicare Advantage Plans are administered by private insurers approved by Medicare. Original Medicare is managed directly by the federal government.

Include Part D

Some Medicare Advantage Plans include Part D prescription drug coverage. Original Medicare does not cover drugs so you need to enroll in a stand-alone Part D Plan.

Conclusion

In summary, the biggest differences between Original Medicare and Medicare Advantage are provider access, out-of-pocket costs, drug coverage, and administration by private insurers vs. directly by the government. Review your specific needs and priorities when choosing between Medicare options.

FAQS

The biggest difference between Original Medicare and Medicare Advantage is the way they are structured and the benefits they provide. Original Medicare is a fee-for-service program run by the federal government, while Medicare Advantage is an alternative option offered by private insurance companies. Original Medicare consists of Part A (hospital coverage) and Part B (medical coverage), while Medicare Advantage (Part C) combines both Part A and Part B coverage, often with additional benefits like prescription drug coverage and dental care.

What does Original Medicare cover?

Original Medicare (Part A and Part B) covers a broad range of services including inpatient hospital stays, outpatient services, doctor visits, medical supplies, and preventive care. However, it does not cover prescription drugs, routine dental care, eyeglasses, or hearing aids.

What does Medicare Advantage cover?

Medicare Advantage Plans cover all the services included in Original Medicare, but they can also provide additional benefits like prescription drug coverage, dental care, vision care, hearing aids, and fitness programs. The specific services covered by Medicare Advantage Plans vary by plan and can be more comprehensive than Original Medicare or medicaid.

How much does Original Medicare cost?

Most people do not pay a monthly premium for Medicare Part A (hospital coverage) if they have paid Medicare taxes for at least 10 years. However, there is a monthly premium for Medicare Part B (medical coverage). The standard premium for Part B in 2021 is $148.50 per month, but it may be higher depending on your annual income.

How much does Medicare Advantage cost?

The cost of Medicare Advantage Plans varies depending on the specific plan you choose. In addition to the monthly Part B premium, you may need to pay a monthly premium for the Medicare Advantage Plan. Some plans have a $0 monthly premium, while others may have higher premiums. It’s important to review the costs and coverage details of each plan before choosing one.

Are prescription drugs covered by Original Medicare?

No, Original Medicare does not cover prescription drugs. To get coverage for prescription medications, you need to enroll in a standalone Medicare Part D prescription drug plan or choose a Medicare Advantage Plan that includes prescription drug coverage.

Are prescription drugs covered by Medicare Advantage Plans?

Many Medicare Advantage Plans include prescription drug coverage (Medicare Part D). These plans are known as Medicare Advantage Prescription Drug (MAPD) plans. However, the specific coverage and formulary (list of covered drugs) can vary by plan, so it’s important to review the details to ensure your medications are covered.

Can I use Original Medicare with a Medicare Advantage Plan?

No, you cannot use Original Medicare (Part A and Part B) and a Medicare Advantage Plan at the same time. When you enroll in a Medicare Advantage Plan, you will use that plan for all of your Medicare-covered healthcare needs. However, if you have a Medicare Advantage Plan, you can still have access to emergency care and urgently needed care outside of your plan’s network.

Can I switch from Original Medicare to a Medicare Advantage Plan?

Yes, during the Annual Enrollment Period (AEP) from October 15 to December 7 each year, you can switch from Original Medicare to a Medicare Advantage Plan. This is also the time when you can switch between different Medicare Advantage Plans or switch from a Medicare Advantage Plan back to Original Medicare.

Can I switch from a Medicare Advantage Plan to Original Medicare?

Yes, during the Annual Enrollment Period (AEP) from October 15 to December 7 each year, you can switch from a Medicare Advantage Plan back to Original Medicare. However, keep in mind that if you had a Medicare Advantage Plan with prescription drug coverage, it is recommended to enroll in a standalone Medicare Part D prescription drug plan to avoid any gaps in your coverage.