Original Medicare vs. Medicare Advantage
This article was updated on: 09/16/2018
Medicare Advantage, also known as the Medicare Part C program, officially launched in 2003, according the Centers for Medicare & Medicaid Services (CMS). In 2017, about one-third of all Medicare beneficiaries are enrolled in Medicare Advantage plans according to CMS.
If you have Medicare coverage or are approaching Medicare eligibility, you may have questions about which program is right for you. This article will help you understand the differences between Original Medicare vs. Medicare Advantage so you can make the best decision about your coverage.
Original Medicare vs. Medicare Advantage: What’s the difference?
In order to understand the differences between the two programs, it’s important to understand how each one works.
Original Medicare, Part A and Part B:
Original Medicare is administered by the federal government, and there are two parts to this program:
- Part A, which is also called hospital insurance, covers eligible costs for your care as an inpatient in a hospital or skilled nursing facility. It also may cover hospice care.
- Part B is your medical insurance and generally covers outpatient services such as doctor visits, outpatient tests, home health care, durable medical equipment, and certain preventive services.
Under Original Medicare, you can get care from any doctor, hospital, or other provider who accepts Medicare. Here’s more details on costs and coverage associated with Original Medicare:
- You may have to pay copayments or coinsurance amounts for your care; these amounts are determined by the government and are generally the same for most people covered by the program.
- There is no annual cap on your out-of-pocket expenses, although you may be eligible for a Medicare Supplement plan (Medigap) to help with out-of-pocket costs Original Medicare doesn’t cover.
- People with qualifying work histories usually don’t pay a premium for their Part A coverage. Part B premiums are set each year at the federal level and you do not pay more because of your age or health condition, although you might have to pay a higher premium if your income level is above a certain amount.
- Original Medicare generally does not include coverage for prescription drugs, except those medications that must be administered by a medical professional, such as chemotherapy and certain types of injections, for example.
If you want prescription drug coverage and you are enrolled in Original Medicare, you’ll need to purchase a separate stand-alone Medicare Part D Prescription Drug Plan.
One of the major differences between Original Medicare vs. Medicare Advantage is that the Medicare Advantage program is administered by private insurance companies approved by Medicare to offer benefits. This means that premiums are set by the individual insurance companies and can vary depending on the plan you choose and other variables, although you’ll continue to pay your Part B premiums in addition to any premium your plan requires.
Medicare Advantage plans coverage information:
- Medicare Advantage plans must offer all the same coverage as Original Medicare (except for hospice care, which is still covered under Part A), but they are able to offer additional benefits to their members.
- For example, many Medicare Advantage plans also include Medicare Part D prescription drug coverage, so you get all your Medicare benefits in one convenient plan.
- In addition, many offer coverage for routine vision, dental, and hearing services that aren’t available under Original Medicare.
Medicare Advantage plans can set some of their own rules and guidelines for members. For example, they determine the amount of copayments and coinsurance you will pay for covered services, and they may require you to use certain providers for your health care.
Another significant difference between Original Medicare vs. Medicare Advantage is that with Medicare Advantage, once you reach a specific limit on out-of-pocket expenses, you pay nothing for your covered health care costs. This limit varies from plan to plan and can change each year, so it’s important to check the plan details before you enroll.
Remember, if you enroll in a Medicare Advantage plan, you’re still in the Medicare program, which means you have all the same rights and protections as you have under Original Medicare.
Are there different types of Medicare Advantage plans?
Many people like the flexibility that Medicare Advantage plans provide. Unlike Original Medicare, which is the same for everyone, there are several different Medicare Advantage options you may be eligible for. Some of the popular ones include:
- Health Maintenance Organizations (HMOs). These plans usually have the lowest premiums and out-of-pocket costs, however, you may be required to get all your health care (except for emergency care) from providers in the plan’s network. Many HMOs include coverage for prescription drugs and other routine health benefits.
- Special Needs Plans (SNPs) are a type of HMO that limits enrollment to people with certain conditions, or who live in a nursing facility, or are eligible for both Medicare and Medicaid.
- Preferred Provider Organizations (PPOs)*. PPOs let you see any provider who accepts your plan, but your costs are much lower if you use in-network providers. You can often find plans that include Part D prescription drug coverage.
- Private Fee-for-Service plans (PFFS). With PFFS plans, you can get health care from any provider who accepts the terms of your plan. However, doctors are not required to accept your plan even if they participate in the Medicare program. You’ll need to ask each time you get care, even if you’ve used the provider in the past.
Not every type of plan may be available where you live, and plan benefits and premiums vary. Keep these questions in mind when you evaluate the Medicare Advantage plans you’re eligible for:
- What are your out-of-pocket costs including premiums and copayments and/or coinsurance, and how do they compare to Original Medicare?
- Do I get all the coverage I need, such as prescription drug coverage or routine vision, dental, and hearing services?
- Do I have to use network providers? Are the doctors and hospitals I prefer included in the plan’s network?
How can I find which Medicare Advantage plans are available in my area?
I’m available to help you understand your options. If you prefer, you can request information via email or schedule a phone call at your convenience by clicking one of the links below. To view some plans you may be eligible for, use the “Compare Plans” button below.
*Out-of-network/non-contracted providers are under no obligation to treat Preferred Provider Organization (PPO) plan members, except in emergency situations. For a decision about whether we will cover an out-of-network service, we encourage you or your provider to ask us for a pre-service organization determination before you receive the service. Please call our customer service number or see your Evidence of Coverage for more information, including the cost-sharing that applies to out-of-network services.