Medicare Advantage vs Original Medicare

When you’re approaching age 65, going on Medicare vs. a Medicare Advantage plan requires examining several different coverage and lifestyle factors to determine which option is best for you.

The key difference between Medicare and Medicare Advantage plans is that Medicare (often referred to as Original Medicare) is a government-run program paid into by payroll taxes over your working life. Medicare Advantage, also known as Medicare Part C, is a private plan similar to enrolling in a Health Maintenance Organization plan (HMO) through an employer or exchange. 

Original Medicare plans remain in demand and are heavily relied upon by those who are aging and disabled. However, Medicare Advantage plans have become popular, with AARP reporting that 47% of Medicare beneficiaries are enrolled in a Medicare Advantage plan, often because Medicare doesn’t cover items the beneficiary needs.

Here are some important factors to consider in Original Medicare vs. Medicare Advantage.

Doctor and Hospital Choices with Medicare vs. Medicare Advantage

Original Medicare coverage consists of Part A for hospitalization and Part B for doctor visits and routine medical care.

Original Medicare gives you more choices with doctors and hospitals, as many primary care physicians, specialists, and hospital networks accept Medicare. Medicare can be used anywhere in the United States with a provider that accepts it, and a referral is not required to see a specialist.

Some Medicare Advantage plans restrict beneficiaries to providers within the network and service area (with exceptions for emergency hospitalization), while others like PPO (Preferred Provider Organization) and HMO-POS (HMO Point-of-Service) plans offer out-of-network coverage options.  Additionally, some plans will require referrals from your primary care doctor to see a specialist, while others will not. 

Logistics

The logistics of enrollment is the most palpable difference between Medicare and Medicare Advantage. Original Medicare encompasses Parts A and B, in addition to a separate prescription drug program (Part D) and supplemental policies called Medigap, which assist with out-of-pocket costs and coinsurance if you do not have secondary coverage from an employer or Medicaid. This means enrolling in four different services, in which providers individually file claims instead of Medicare itself as a single-payer.

Medicare Advantage (also called Part C) involves enrolling in just one plan that combines Parts A and B and in many cases, Part D. A vast majority of plans include prescription drug coverage. However, there is no Medigap for Medicare Advantage plans.

Cost Comparison

Original Medicare premiums, deductibles, and coinsurance costs for Parts A and B are set by the federal government. Under Part B, beneficiaries must pay a monthly premium and pay 20% of Medicare-approved amounts after meeting the deductible. There is no out-of-pocket limit unless you have a Medigap policy, or secondary coverage from a former employer or Medicaid.

Under Medicare Advantage, beneficiaries must pay the Part B premium set by the government, and sometimes an additional premium, though many Medicare Advantage plans are available with no monthly premium at all. There can be significantly lower out-of-pocket annual expenses with Medicare Advantage,  due to the fact most Medicare Advantage plans have set copays for doctor visits and annual caps on out-of-pocket costs. 

Overall Coverage

Original Medicare covers hospitalization and physician visits. Prescription drug coverage is separate under Part D, but there is no coverage for dental, vision, or hearing services.

Medicare Advantage plans cover medically necessary services as Part B of their coverage (similar to Original Medicare). However, these plans also may offer benefits Original Medicare doesn’t cover, such as dental, vision, hearing and reimbursement for voluntary wellness memberships.

Original Medicare doesn’t require beneficiaries to obtain approval beforehand for procedures or medical supplies. Medicare Advantage plans do require authorization in advance for certain procedures and services.

Can You Use Medicare Advantage Plans While Traveling?

Original Medicare can be used with all participating healthcare providers throughout the United States. Medicare Advantage plans generally have a limited coverage area and provider network, and non-emergency medical expenses incurred while traveling would not be covered. However, emergency and urgent care would be.

Neither Original Medicare or Medicare Advantage covers medical care outside the United States. Supplemental insurance may be purchased for Medicare Advantage enrollees along with travel insurance per trip, and some Medigap policies cover emergency care only in international travel.

Why Enroll In a Medicare Advantage Plan?

Ultimately, your healthcare needs and lifestyle will dictate whether Original Medicare or Medicare Advantage is a better fit for you. Millions of people turn to Medicare Advantage due to inadequate coverage from Original Medicare for dental, hearing, and vision care. Medicare Advantage plans also offer numerous benefits that Original Medicare does not, such as reimbursements for fitness memberships, allowances for over-the-counter drug purchases and transportation to doctor visits. 

In addition to all of the durable medical equipment covered under Original Medicare, such as wheelchairs and blood pressure monitors, Medicare Advantage plans often offer coverage for medical equipment and supplies not typically covered by Original Medicare. These items would include personal emergency response systems (e.g. LifeAlert), grab bars, compression stockings, shower chairs, and other accessibility aids that make life easier.

When choosing a coverage plan, there is a lot to consider. Contact a Baylor Scott & White licensed insurance agent for a consultation on your options, and guidance on finding a plan that’s best for you or your loved ones.