How are Original Medicare and Medicare Advantage Different?

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

We compare Original Medicare and Medicare Advantage to help you better understand the difference between Original Medicare and Medicare Advantage plans.

Both Original Medicare and Medicare Advantage are Federally regulated and ACA-compliant, but the fact that aspects of Medicare are privatized means there are significant differences between different types of Medicare.

  • All Advantage plans (Part C), Drug plans (Part D), and Medigap (Part F) are administered by private insurance companies and thus have unique strengths and weaknesses.
  • Meanwhile, Original Medicare is a government-issued single-payer health insurance system (that uses a mostly private network), and that too has its pros and cons.

Below we discuss the different parts of Medicare and point to some pros and cons of each type to help you understand the difference between Medicare and Medicare Advantage better.

TIP: Please take the time to learn about the networks and formularies of any plan you consider.

We Explain the Different Parts of Medicare to Help You Understand Original Medicare Vs. Medicare Advantage.

Medicare is a federal government program that includes several separate parts. You must qualify for the program. You can qualify for it in the 3 months before your 65th birthday, the month of your birthday, and the following 3-month period as well as after you have been judged disabled for two years by Social Security or if you have ALS or End Stage Renal Disease. All versions of Medicare must provide the 10 essential benefits of the Affordable Care Act.

  • Part A covers hospitalization and is free to citizens with at least 10 years of work history. Part A is part of Original Medicare
  • Part B is medical coverage and costs a standard monthly premium of $134, which may be withdrawn from your Social Security payment. Note, the premium may be higher if you are higher-income; it may be lower if you are disabled or are low-income with Medicaid paying your premiums. Part B is also part of Original Medicare.
  • Part C is a Medicare Advantage Plan which is a private insurance plan regulated by the government. You must have parts A and B to purchase anything else. It often carries some limited dental and vision insurance, unlike original Medicare. You will have a physician network and may be required to get referrals to specialists. Your plan is only as good as your insurer and their network.
  • Part D is a drug plan that you might want if you have original Medicare and do not want an advantage plan (Part C.)
  • Part E is a grandfathered in Medigap plan that stopped being sold in 2010.
  • Part F is a Medicare Supplement offers a broad range of plan benefits. It covers extra Part A hospital costs and deductibles as well as Part B coinsurances and deductibles. It also covers some blood, skilled nursing facility costs and some limited emergency overseas travel costs. This plan may be discontinued in the future. Life Advantage plans, it is administered by individual insurance companies overseen by the federal government.

What are the Advantages of Each Plan?

Original Medicare

  • You pay premiums, deductibles, and coinsurances
  • You can see any doctor in any part of the country without a referral. There is no network.
  • It covers extra Part A hospital costs and deductibles as well as Part B coinsurances and deductibles.
  • It also covers some blood.
  • You would have to buy a separate Part D plan to cover prescription drugs.
  • Skilled nursing facility costs are covered.
  • Limited emergency overseas travel costs are covered.
  • There is no dental or vision coverage except through accidents and medical necessity.
  • There is no cap on coverage under Part F.

Medicare Advantage

  • You pay Medicare B premiums as well as your plan’s premium. Note, some Advantage plans do not charge a premium other than your Part B.
  • Plans will include a schedule of fixed costs for each office visit.
  • You will have a physician network under an HMO (Health Maintenance Organization). PPO (Preferred Provider Organization) and PFFS (Private Fee For Service) plans cover care outside the network but at a higher out-of-pocket cost.
  • You usually need a referral to visit a specialist.
  • There is little coverage outside the network so, if you travel, you will also need travel insurance.
  • Prescription drugs are covered under individual plan’s formularies.
  • Plans will have an out-of-pocket expense limit, which can be high. After this limit, the plan pays the full cost of your care.
  • Discounted gym memberships and wellness services.

Medicare is different from Medicaid, but both follow the laws of the Affordable Care Act.

Author: Linda DeSolla Price

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