What is the Difference Between Medicare Advantage and Original Medicare

You are hitting close to 65 years old and realize that the Medicare date is pending. There are many options to choose from, but one of the biggest questions is what is the difference between Medicare Advantage and Original Medicare?

Your government-funded health care coverage can initially be picked during a seven-month period which starts three months before your sixty-fifth birthday month and ends three months after. You will be choosing between two types of insurance plans. One plan is the original Medicare (or Part A and Part B), and the second plan is Medicare Advantage (often called Part C).

Even though the two options appear complicated, the key differences are easy to understand. Let’s look at these plans together.

What Are the Differences Between Medicare and Medicare Advantage?

One of the most significant differences between the two plans is the way you get Medicare. Original Medicare includes:

·      Part A – your hospital or inpatient insurance  

·      Part B – your medical or outpatient insurance. 

You also have the choice to purchase drug coverage called Part D. Additional coverage can be purchased, called Medigap, which can sometimes cover services or items that Medicare does not.

Medicare Advantage, or Part C, is considered all-in-one insurance. In Part C, Parts A, B, and D are bundled into one insurance plan. This plan sometimes includes extra benefits like vision, dental, and hearing, which original Medicare does not have. 

There are other key differences in the way you pick your physician as well. With Original Medicare, you can use any doctor or hospital in the United States that takes Medicare. If you choose Medicare Advantage, however, you are part of a network, and you will need to use a doctor within that network. If you need a referral, that physician will, in most cases, also have to participate in the network.

What are the Costs of Original Medicare and Medicare Advantage?

When you use Original Medicare Part B, you will be required to pay 20% of whatever Medicare charges. For example, you go to the doctor, and your bill is $400, you will pay $80. 

There is no limit on what you can pay out-of-pocket. However, you can purchase additional coverage called Medigap. This can help with some out-of-pocket expenses that you pay and can sometimes help with services not covered by Medicare.

With Medicare Advantage, there are different out-of-pocket costs based on the service you use. It is a pay-for-use service; you will pay nothing if you do not get sick very often. However, a disadvantage is that you will have to pay multiple co-pays for a single service. For example, you may have a co-pay for office visits, lab services, or other services. 

The Advantage plans have a yearly limit, and once you hit that limit, you pay nothing. You cannot purchase Medigap coverage with Advantage as this plan is considered all-inclusive. 

Different Types of Medicare Advantage

There are several different Medicare Advantage plans and only one Original Medicare. So, if you choose to have a Medicare Advantage plan, you will need to decide which one best fits your needs. The four basic plans are:

• Health Maintenance Organization (HMO) Plans  – with an HMO plan, you will need to get your basic care from your primary care provider (PCP) within your area’s plan or your network. They do have coverage for out-of-network emergency care and urgent care, though it may cost more. You will also have to get a referral from your PCP to use other specialties that will also likely be HMO network providers. Ask if the HMO plan you are using includes Part D prescription coverage – most of them have this coverage.
• Preferred Provider Organization (PPO) Plans – With a PPO plan you do not have to choose a primary care provider like an HMO, but you will need to stay within the PPO providers. You can choose your doctors, but you pay less for staying with a PPO provider. Most of the plans also include Part D.

• Private Fee-for-Service (PFFS) Plans – This is a pay-for-service insurance plan offered by a private company. It decides how much each service will cost, and you get charged for it when you use it. A disadvantage is that some providers do not take this insurance and will not treat you. You may have to pay for services that are not covered by the provider or are out of the plan’s network. 

• Special Needs Plans (SNPs) – This plan is specific for special needs and is geared toward that need. It generally is geared towards someone with End-Stage Renal Disease, Heart Failure, Dementia, or someone covered both by Medicare and Medicaid. This plan does have Part D coverage, but you may need to have a primary care provider (PCP) and get a referral. Like the other Medicare Advantage Plans, you will want to make sure your doctor takes your insurance.

These are the four basic plans, but there are others. To find out more about Medicare Advantage plans in your area, refer to Find a Medicare plan.

Will I be Covered if I Travel?

Within the United States, you can choose any medical provider that accepts Medicare to get your health needs met with Original Medicare. 

If you have an emergency and are traveling, such as a broken bone or another crisis, Medicare Advantage will still cover that. A routine office visit may not be covered, however, and may be an out-of-pocket expense. 

Outside of the United States, neither Medicare nor Medicare Advantage will cover the costs. There is an option in some Medicare Advantage plans, however, to secure additional coverage for when you travel. 

Can I Switch My Plan or Join a New One?

If you join a Medicare Advantage Plan or Original Medicare, you can switch your plan between January 1 – March 31. You can switch from Original Medicare to an Advantage plan or go from an Advantage plan to Original Medicare. 

You can also change from one Medicare Advantage plan to another Medicare Advantage Plan. One thing to keep in mind, however, is that you can only make one change during that period. So do your homework and research the plan that you are considering.

If you would like more information on Original Medicare or Medicare Advantage please refer to the Medicare website.