When you first enroll in Medicare at age 65 or older, one of the biggest coverage decisions you’ll make is whether to stick with Original Medicare or sign up for a Medicare Advantage Plan.
With all the different options, it can get confusing. A common question many people ask is: does Medicare Advantage pay instead of Original Medicare?
The short answer is yes – if you join a Medicare Advantage Plan, it takes the place of Original Medicare in terms of covering your medical costs. However, there are some important differences to understand between the two programs.
In this comprehensive guide, we’ll explain:
- How Original Medicare works
- What Medicare Advantage Plans are
- The key differences between the two options
- How to decide which type of Medicare coverage is right for you
Let’s start by looking at Original Medicare…
What is Original Medicare?
Original Medicare consists of Part A and Part B and is managed directly by the federal government. It covers around 59 million beneficiaries in the United States.
Medicare Part A covers inpatient hospital care, skilled nursing facility care, hospice care, and some home health services. Most people get Part A premium-free if they or their spouse paid Medicare taxes for at least 10 years.
Medicare Part B covers doctor visits, preventive care, outpatient services, mental health services, and durable medical equipment. Part B has a standard monthly premium which is $170.10 in 2023 for most beneficiaries.
With Original Medicare, you can go to any doctor or hospital in the U.S. that accepts Medicare. It operates as a fee-for-service program, meaning Medicare pays a portion of the approved charges for covered medical services and you pay the remaining costs. These costs can include:
- Deductibles for hospital and medical insurance
- Coinsurance for services
- Copayments to doctors and facilities
Original Medicare does not cover all health services though. Some key gaps include:
- Prescription drugs (you need to enroll in a separate Medicare Part D Plan)
- Routine vision, dental, or hearing care
- Long-term care
To help pay these additional costs, many people with Original Medicare purchase supplemental coverage like:
- Medigap (Medicare Supplement Insurance) plans to cover cost-sharing
- Medicare Part D prescription drug plans
- Dental, vision, and hearing plans
Now let’s look at Medicare Advantage…
What is Medicare Advantage?
Medicare Advantage Plans are offered by private insurance companies as an alternative way to get your Medicare benefits. They are also known as Medicare Part C plans.
If you enroll in a Medicare Advantage Plan, you still have Medicare. The key difference is you get your Part A and Part B coverage through the Medicare Advantage Plan, not through Original Medicare.
Medicare pays a fixed monthly payment per enrollee to the Medicare Advantage Plan for your care. In 2023, the average payment across all plans is approximately $1,100 per member per month.
There are different types of Medicare Advantage Plans available:
- HMO: Health Maintenance Organizations tend to have lower costs and more restrictions on providers. Referrals are required to see specialists.
- PPO: Preferred Provider Organizations allow you to see out-of-network doctors for higher costs. No referrals needed.
- PFFS: Private Fee-For-Service plans let you visit any provider accepting the plan’s terms.
- SNP: Special Needs Plans cater to specific populations like those with chronic illnesses.
In addition to medical services covered under Parts A and B, many Medicare Advantage Plans include Part D prescription drug coverage. Some plans also offer extra benefits not covered by Original Medicare such as:
- Vision care, eyeglasses
- Hearing care, hearing aids
- Dental care, cleanings, and x-rays
- Wellness programs like gym memberships
- Over-the-counter allowances
- Transportation to medical appointments
What are the Main Differences?
Now that you understand the basics of Original Medicare and Medicare Advantage, let’s go over some of the key differences between the two options:
Original Medicare: You can visit any doctor or hospital in the U.S. that accepts Medicare. No referrals required.
Medicare Advantage: More limited provider network. You generally must stay in-network except for emergencies. Referrals sometimes needed to see specialists, depending on plan type.
Original Medicare: Higher overall out-of-pocket costs unless you have supplemental insurance. You pay 20% coinsurance for most services after meeting the deductible.
Medicare Advantage: Costs vary by plan. Many have $0 premiums or low monthly premiums with copays and deductibles for services. Maximum annual out-of-pocket limit.
Original Medicare: Does not include prescription drug coverage. You have to purchase a separate Medicare Part D Plan.
Medicare Advantage: Most plans include prescription drug coverage (Part D) with some copays or coinsurance on each prescription.
Original Medicare: Does not cover routine dental, vision, hearing, or wellness programs. You pay extra for supplemental coverage.
Medicare Advantage: Many plans include some dental, vision, and other benefits not covered by Original Medicare.
Original Medicare: Covers emergency and urgent care anywhere in the U.S. including coverage outside the country under limited circumstances.
Medicare Advantage: Generally only covers emergency and urgent care within the U.S. Some plans offer limited worldwide emergency coverage.
As you can see, there are trade-offs to consider when choosing between Original Medicare and Medicare Advantage. The “right” option depends on your personal healthcare needs and preferences.
Does Medicare Advantage Pay Instead of Original Medicare?
Now we can answer the question: does Medicare Advantage pay instead of Original Medicare?
Yes, if you join a Medicare Advantage Plan, you are no longer in Original Medicare. The Medicare Advantage Plan administers your Medicare benefits and handles paying healthcare providers for services.
You will be issued a plan membership card that you show when you receive medical care. Your providers will bill the Medicare Advantage Plan directly instead of Medicare.
The plan covers all Medicare Part A and Part B services. In many cases, they also include Part D prescription drug coverage. Plus you get any extra benefits offered by the specific plan you select.
You still pay your monthly Part B premium to Medicare. With Medicare Advantage Plans, your costs for medical services include:
- Monthly premiums (many plans have $0 premiums)
- Copays or coinsurance when you receive healthcare
- Out-of-pocket maximum that limits your costs for the year
- Possible deductibles for certain services
The Medicare Advantage Plan is responsible for paying the remaining costs to your healthcare providers at the Medicare-approved amount after you pay your portion.
So in summary – yes, Medicare Advantage provides your Medicare benefits instead of Original Medicare!
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Does Medicare Advantage pay instead of Original Medicare?
Yes, Medicare Advantage Plans are an alternative to Original Medicare. When you enroll in a Medicare Advantage Plan, you receive your Medicare benefits through a private insurance company, rather than through the federal government.
What is the difference between Original Medicare and a Medicare Advantage?
Original Medicare is the traditional fee-for-service program offered by the federal government. It includes Medicare Part A (hospital insurance) and Part B (medical insurance). Medicare Advantage, on the other hand, is a bundled plan often offered by private insurance companies. It combines the benefits of Parts A and B, and often includes additional coverage such as prescription drugs, dental, and vision.
Can I switch from Original Medicare to Medicare Advantage?
Yes, during the Medicare Open Enrollment period, you have the opportunity to switch from Original Medicare to a Medicare Advantage Plan. This period typically occurs from October 15 to December 7 each year. However, there are also special enrollment periods that may allow you to switch outside of the open enrollment period under certain circumstances.
Can I switch from Medicare Advantage to Original Medicare?
Yes, you have the option to switch from a Medicare Advantage Plan back to Original Medicare. This can be done during the Medicare Advantage Disenrollment Period, which occurs from January 1 to February 14 each year. During this period, you can drop your Medicare Advantage Plan and return to Original Medicare. However, you may not be able to re-enroll in a Medicare Advantage Plan after the disenrollment period ends.
What factors should I consider when choosing between Original Medicare and Medicare Advantage?
When choosing between Original Medicare and Medicare Advantage, you should consider factors such as your healthcare needs, budget, preferred doctors and hospitals, prescription drug coverage, and additional benefits offered by Medicare Advantage Plans. It’s important to evaluate your specific situation and choose the option that best meets your needs.
Do Medicare Advantage Plans accept Medicare?
Yes, Medicare Advantage Plans are required to accept Medicare beneficiaries. In fact, to enroll in a Medicare Advantage Plan, you must first be enrolled in both Medicare Part A and Part B.
Do Medicare Advantage Plans cover the same benefits as Original Medicare?
Medicare Advantage Plans are required to cover all the same benefits as Original Medicare, including hospital insurance (Part A) and medical insurance (Part B). In addition, many Medicare Advantage Plans offer additional benefits, such as prescription drug coverage, dental, vision, and hearing services.
What is the enrollment process for Medicare Advantage?
To enroll in a Medicare Advantage Plan, you must first be eligible for Medicare. Generally, individuals age 65 and older are eligible for Medicare. Once you are enrolled in Medicare, you can choose to enroll in a Medicare Advantage Plan during the initial enrollment period when you first become eligible for Medicare, or during the annual Medicare Open Enrollment period. You can enroll in a Medicare Advantage Plan through the insurance company offering the plan or through Medicare’s official website.
What is the role of the Centers for Medicare and Medicaid Services?
The Centers for Medicare and Medicaid Services (CMS) is the federal agency responsible for administering the Medicare program. They oversee Medicare Advantage Plans, coordinate with private insurance companies, provide guidance to beneficiaries, and ensure compliance with Medicare regulations.
What is the difference between Medicare Advantage and traditional Medicare?
The main difference between Medicare Advantage and traditional Medicare is that Medicare Advantage Plans are offered by private insurance companies, while traditional Medicare is provided by the federal government. Medicare Advantage Plans often offer additional benefits, such as prescription drug coverage and dental services, that are not covered under traditional Medicare.