Medicare is the federal health insurance program for people aged 65 or older, certain younger people with disabilities, and people with end-stage renal disease. There are two main ways to get Medicare coverage – Original Medicare and Medicare Advantage. Understanding the key differences between these two Medicare options is important when deciding how to get your Medicare benefits.
What is Original Medicare?
Original Medicare consists of Medicare Part A and Part B. It is a fee-for-service health plan run by the federal government.
Medicare Part A helps cover inpatient care in hospitals, skilled nursing facilities, hospice care, and some home health care services. You typically don’t pay a premium for Part A if you or your spouse paid Medicare taxes while working.
Medicare Part B covers doctor visits, preventive care, durable medical equipment, and other medical services. Part B requires a monthly premium payment. The standard Part B premium amount in 2023 is $164.90 per month, although higher-income beneficiaries may pay more.
With Original Medicare, you can go to any doctor or hospital in the U.S. that accepts Medicare assignment. When you get care, Original Medicare pays its share and you pay the rest through deductibles, coinsurance and copays.
Original Medicare does not cover prescription drugs. To get drug coverage, you need to join a separate Medicare Part D prescription drug plan. You also have the option to purchase a Medigap policy (also called Medicare Supplement Insurance) from a private insurance company. This helps pay some of the out-of-pocket costs in Original Medicare.
What is Medicare Advantage?
Medicare Advantage Plans are an alternative to Original Medicare. They are offered by private insurance companies approved by Medicare. If you join a Medicare Advantage Plan, the plan provides all of your Medicare Part A and Part B coverage.
With Medicare Advantage, you typically get your Medicare benefits through a managed care system like an HMO or PPO. This usually means you need to use doctors within the plan’s network except in emergencies. Medicare Advantage Plans have provider networks, so knowing which doctors participate is important.
Many Medicare Advantage Plans also include Medicare prescription drug coverage (Part D) as part of the plan, so you don’t have to enroll in a separate Medicare drug plan. Some plans offer additional benefits that Original Medicare does not cover like vision, hearing, dental, and wellness programs.
You still need to continue paying your monthly Part B premium if you join a Medicare Advantage Plan. You may also need to pay a monthly premium for the Medicare Advantage Plan, as well as copays or coinsurance when you receive care.
Key Differences Between Original Medicare and Medicare Advantage
There are several important differences to understand between Original Medicare and Medicare Advantage:
With Original Medicare, you have the standard benefits under Part A and include Part B. This allows you to go to any doctor or facility in the U.S. that accepts Medicare. You pay deductibles and coinsurance amounts set by Medicare.
Medicare Advantage Plans are required to cover all benefits of Original Medicare. Plans may offer extra benefits not covered by Original Medicare such as dental, hearing, vision and wellness programs. Most Medicare Advantage Plans include prescription drug coverage.
Original Medicare does not have an annual limit on your out-of-pocket costs. You pay 20% coinsurance for Part B services after meeting the $226 deductible. Part A costs like hospital copays can also add up.
Most Medicare Advantage Plans have an annual limit on your overall out-of-pocket spending for medical services. Once you hit this amount, you pay nothing for covered services. The maximum out-of-pocket limit in 2023 is $8,300. This provides financial protection from unexpected medical costs.
Original Medicare lets you go to any doctor or hospital in the U.S. that accepts Medicare. You don’t need referrals to see specialists.
Medicare Advantage Plans have provider networks. In most cases, you’ll need to use doctors and facilities that are in-network except for emergency care. Some plans may require referrals to see specialists. Before enrolling in a Medicare Advantage Plan, make sure your doctors are in the plan’s network.
Choosing Between Traditional Medicare and Medicare Advantage
When deciding between Original Medicare or Medicare Advantage, there are a few key factors to consider:
Medicare Advantage Benefits
- Many Medicare Advantage Plans offer extra benefits not covered by Original Medicare like dental, vision and hearing.
- Medicare Advantage Plans include prescription drug coverage. With Original Medicare, you need to enroll in a separate Medicare Part D Plan.
- Medicare Advantage Plans limit your annual out-of-pocket costs for medical services. Original Medicare does not have an out-of-pocket limit.
Original Medicare Benefits
- You can go to any doctor or hospital in the U.S. that accepts Medicare. Medicare Advantage networks are more restricted.
- You can see any specialist without referrals. Some Medicare Advantage Plans require referrals.
- Original Medicare may be better if you travel frequently or have a home in more than one location during the year.
Switching Between Medicare Plans
You can make changes to your Medicare coverage during certain times of year:
- Medicare Open Enrollment Period – This is from October 15 to December 7 each year. During this time, you can switch between Original Medicare, Medicare Advantage Plans, and Part D drug plans.
- Medicare Advantage Open Enrollment Period – From January 1 to March 31, anyone enrolled in a Medicare Advantage Plan can switch back to Original Medicare or change to a different Medicare Advantage Plan.
There are also Special Enrollment Periods that allow you to change plans if you move out of your plan’s service area or lose other coverage that you had.
Understanding Medicare Supplement Plan or Medigap Plans
In addition to Original Medicare and Medicare Advantage, there are also Medicare Supplement Insurance plans, known as Medigap, that help fill gaps in Original Medicare coverage.
What is Medicare Supplement Insurance?
Medicare Supplement Insurance plans are sold by private insurance companies. They help pay some of the out-of-pocket costs not covered by Original Medicare like coinsurance, copays and deductibles.
There are 10 standardized Medigap Plans labeled Plan A through Plan N. Each offers a different set of basic and extra benefits. After you meet your deductible for the year, Medigap will pay its share of covered costs for the rest of the year.
To enroll in a Medigap policy, you must be enrolled in Medicare Part A and Part B. The best time to buy a Medigap policy is during your 6 month Medigap Open Enrollment Period when you are first eligible for Medicare. During this time, you can buy any Medigap policy offered in your area even if you have health problems.
Comparing Medigap and Medicare Advantage
Medigap and Medicare Advantage Plans both help lower your out-of-pocket costs for healthcare compared to Original Medicare alone. However, there are key differences:
- Works along with Original Medicare
- Lets you go to any doctor/facility accepting Medicare nationwide
- No networks
- Does not include prescription drug coverage
- Replaces Original Medicare
- Uses provider networks – must go in-network except emergencies
- May offer extra benefits not covered by Original Medicare
- Most plans include prescription drug coverage
Changing Between Medicare Plans
- You can only enroll in a Medigap policy when you first enroll in Medicare if under 65, and during your Medigap Open Enrollment Period if over 65. At other times, you may be denied Medigap coverage based on your health.
- With limited exceptions, you cannot have both a Medicare Advantage Plan and a Medigap policy at the same time.
- When transitioning from Medicare Advantage to Original Medicare, you may want to enroll in a Part D prescription plan and then a Medigap policy for supplemental coverage.
The best time make changes to your Medicare coverage is often during Medicare Open Enrollment from October 15 to December 7.
In summary, Original Medicare covers medically necessary healthcare services with the freedom to choose any Medicare-accepting doctor nationwide. Medicare Advantage Plans offer coordinated care networks with often lower out-of-pocket costs and extra benefits not covered by Original Medicare.
Medigap Plans help fill coverage gaps in Original Medicare while allowing access to any healthcare provider that accepts Medicare. There are pros and cons to consider when choosing between Original Medicare, Medicare Advantage and Medigap coverage during your Medicare enrollment periods.
Consulting with your State Health Insurance Assistance Program or getting personalized Medicare Plan advice can help ensure you select the right Medicare coverage option based on your healthcare needs, budget and preferences.
We’re Here to Help
You do not have to spend hours reading articles on the internet to get answers to your Medicare questions. Give the licensed insurance agents at Glidden Group a Call at (208) 962-0077. You will get the answers you seek in a matter of minutes, with no pressure and no sales pitch. We are truly here to help.
What is the big difference between Original Medicare and Medicare Advantage?
Original Medicare is the traditional fee-for-service program offered directly by the government, while Medicare Advantage is an alternative way to receive Medicare benefits through private health insurance plans.
How can I change Medicare Plans?
A: You can change your Medicare Plans during the Medicare Annual Enrollment Period, which runs from October 15 to December 7 each year. You can also make changes during special enrollment periods if you meet certain qualifications.
What is a Medicare Supplement Plan?
A Medicare Supplement Plan, also known as Medigap, is private health insurance that helps cover the gaps in Original Medicare, such as deductibles, copayments, and coinsurance.
What are the types of Medicare?
Medicare is divided into different parts. Medicare Part A covers hospital insurance, Medicare Part B covers medical insurance, Medicare Part C refers to Medicare Advantage Plans, and Medicare Part D covers prescription drug coverage.
What is the difference between Medicare Advantage and Medicare Supplement?
Medicare Advantage is an all-in-one alternative to Original Medicare that includes hospital and medical coverage, while Medicare Supplement Plans work alongside Original Medicare and help pay for out-of-pocket costs.
What are the best Medicare Plans?
A: The best Medicare Plan for you depends on your individual needs and preferences. It is recommended to compare different plans, consider coverage, costs, and network providers to determine the best fit for you.
Can I be enrolled in Original Medicare and a Medicare Advantage Plan at the same time?
No, you cannot be simultaneously enrolled in both Original Medicare and a Medicare Advantage Plan. You must choose one or the other.
What are the differences between Medicare Parts A and B?
Medicare Part A covers inpatient hospital stays, skilled nursing care, and some home health care, while Medicare Part B covers doctors’ services, outpatient care, and medical supplies.
Do Medicare Advantage Plans provide prescription drug coverage?
Many Medicare Advantage Plans do provide prescription drug coverage, but it may vary by plan. It is important to review the specifics of each plan’s coverage.
Can I return to Original Medicare if I am enrolled in a Medicare Advantage Plan?
Yes, you have the option to return to Original Medicare during the Medicare Advantage Disenrollment Period, which runs from January 1 to February 14 each year.