Difference Between Medicare and Medicare Advantage – Full Comparison

One of the most crucial decisions you must make when choosing a health plan is between original Medicare and Medicare Advantage. Medicare Advantage, also known as Medicare Part C or MA plan, is an alternative option for the original Medicare plan.

Private insurance companies provide the advantage plan. It has higher premiums than Original Medicare, but you get more comprehensive coverage.

Below is the complete comparison between the Original Medicare and Medicare Advantage Plan.

Overview

Medicare and Medicare Advantage is healthcare coverage options for seniors and people with specific disabilities in the United States.

Medicare is a federal insurance program that provides health coverage for people over 65. The original Medicare plan consists of four parts: Part A, Part B, Part C, and Part D.

Part A covers hospital care, Part B covers medical services and supplies, Part C is a private health plan (also known as Medicare Advantage), and Part D covers prescription drugs. Original Medicare refers to Part A and Part B.

On the other hand, Medicare Advantage is a type of private health insurance plan that is an alternative to traditional Medicare.

Medicare Advantage plans typically include all the benefits of the Original Medicare but may also have additional benefits such as hearing, dental, and vision coverage.

Costs

The cost difference between Original Medicare and Medicare Advantage depends on your specific plan and circumstances.

Original Medicare has lower premiums than Medicare Advantage plans, but it does not cover all your healthcare costs. You may need to pay deductibles, copayments, and coinsurance for services covered by Original Medicare.

Comparatively, Medicare Advantage plans typically have higher premiums than Original Medicare, but they may offer extra benefits and lower out-of-pocket costs.

For both Medicare and Medicare Advantage, monthly premiums are required to maintain your Medicare coverage. The amount you pay for your Medicare premiums depends on your plan type and income.

For Original Medicare, most people do not have to pay a premium for Part A. The exemption applies if you or your spouse paid Medicare taxes while working.

However, there is a premium for Medicare Part B, which covers outpatient medical services. The standard Part B premium for 2021 is $148.50 per month, but your premium may be higher or lower depending on your income.

For Medicare Advantage plans, the premium will vary depending on the health plan you choose. Some Medicare Advantage plans have no monthly premium, while others may have an additional premium besides the Part B premium.

Medicare enrollees can leverage the Medicare Savings Program (MSP) to raise money for their premiums. MSP is a state-run program that helps eligible Medicare beneficiaries save money on their Medicare costs, including premiums, deductibles, and copayments.

MSPs are available to people with low incomes and limited resources and can help make Medicare more affordable for those who qualify.

It’s essential to compare the costs and benefits of Original Medicare and Medicare Advantage plans to determine the right one for you.

You can contact the Medicare program or speak with a licensed insurance agent to learn more about the costs and benefits of these plans and find a plan that fits your needs and budget.

Scope of Coverage

Original Medicare covers hospital care, medical services, and supplies but does not cover all healthcare costs. You may need to pay deductibles, copayments, and coinsurance to access services not covered by Original Medicare.

To get full health coverage with the Original Medicare plan, you would need to enroll in Parts A, B, and D plans as well as a Medigap plan (Medicare plan F).

The Medigap plan would serve as Medicare supplement insurance to cover any services not covered within the Original Medicare Parts A, B, and D. If eligible, apply to Medicaid services or special needs plan to supplement your Medicare coverage.

On the other hand, Medicare Advantage (MA) is a one-stop plan that offers comprehensive coverage. Most come with a prescription drug plan, ensuring you do not have to enroll for Medicare part D separately. If not, you can apply for stand-alone prescription drug coverage.

Medicare parts A and B are covered extensively, with additional benefits. As such, you may not require to pay out-of-pocket for most medical and health care services. Also, you do not need a Medigap policy.

Enrollment

If you are eligible for Medicare, you have the option to enroll in Original Medicare or a Medicare Advantage plan. Enrollment in Original Medicare is automatic if you already receive Social Security benefits, but you must actively enroll in a Medicare Advantage plan.

To enroll in Original Medicare, you can contact the Social Security Administration (SSA) and ask to be enrolled in Part A and Part B. If you are not already receiving Social Security benefits, you can apply for Medicare online, by phone, or in person at your local SSA office.

You can enroll in Original Medicare during your initial enrollment period, which begins three months before you turn 65 and ends three months after you turn 65.

To enroll in a Medicare Advantage plan, you must be enrolled in Original Medicare. You can then contact private insurance companies that offer Medicare Advantage plans in your area and enroll in a plan that meets your needs.

You can enroll in a Medicare Advantage plan during your initial enrollment or the annual Medicare open enrollment period. The annual Medicare open enrollment period runs from October 15 to December 7 each year.

Being private insurance, Medicare Advantage enrollees join the insurance plan they had under their employer. The two most common Medicare Advantage plan insurance companies are health maintenance organizations (HMOs) and preferred provider organizations (PPO) plans.

Medicare Advantage is becoming increasingly popular. Up 47% of Medicare beneficiaries are enrolled in a Part C plan. There are over 40 MA plans for beneficiaries to choose from.

Doctors and Hospital Choice

One key difference between Original Medicare and Medicare Advantage is that with Original Medicare, you have the flexibility to see any doctor or hospital that accepts Medicare, while with Medicare Advantage, you typically must-see doctors and hospitals within the plan’s network.

If you need to see a specialist, not within the provider’s network of doctors and hospitals, you may need to get a referral from the insurance company.

That said, most MA providers allow patients to go to a hospital outside their network in case of an emergency. Conversely, with Original Medicare, you do not need a referral to see a specialist.    

Medicare vs Medicare Advantage Plan Full Comparison Summary

• Medicare is a federally-funded program that provides basic health insurance coverage to eligible individuals, while Medicare Advantage is a type of private health insurance plan that is an alternative to original Medicare.
• Medicare is made up of four parts: Part A (hospital insurance), Part B (medical insurance), Part C (Medicare Advantage plans), and Part D (prescription drug coverage). Medicare Advantage plans typically include all of the coverage provided by Medicare Part A and Part B, as well as additional benefits such as prescription drug coverage and extra services not covered by original Medicare.
• Medicare is administered by the federal government, while Medicare Advantage plans are offered by private insurance companies that Medicare approves.
• The traditional plan allows a Medicare beneficiary to see any healthcare provider that accepts Medicare, while Medicare Advantage plans may have networks of approved providers that beneficiaries must use.
• Medicare beneficiaries can also purchase a separate Medicare supplement (Medigap) insurance policy to help cover out-of-pocket costs not covered by original Medicare, such as copayments, coinsurance, and deductibles. Medicare Advantage plans may also offer additional coverage for out-of-pocket costs.

How to Choose Between Medicare and Medicare Advantage Plan

Here are some factors to consider when choosing between these plans:

• Cost: Compare the premiums, deductibles, copayments, and coinsurance of Original Medicare and Medicare Advantage plans to determine which fits your budget.
• Coverage: Consider the specific benefits covered by Original Medicare and Medicare Advantage plans and choose the plan that covers the services you need.
• Network: Original Medicare covers services from any provider that accepts Medicare, but Medicare Advantage plans may have a limited network of providers. Choose a plan that includes the providers you prefer to see.
• Additional Benefits: Medicare Advantage plans may include extra benefits such as dental, vision, and hearing coverage, which you would have to pay out of pocket under the Original Medicare plan.

Which Is Better: Original Medicare or Medicare Advantage?

There is no one-size-fits-all answer to the question of whether Original Medicare or Medicare Advantage is better. The right choice will depend on your individual needs and circumstances.

Both Original Medicare and Medicare Advantage provide coverage for medical services, but they have some key differences that you should consider when making your decision.

It is important to compare the available plans carefully and consider your individual needs and budget. You should also consider factors such as the cost of premiums and out-of-pocket expenses, the availability of doctors and providers in your area, and the specific services covered by each plan. A Medicare representative can help you understand your options and make an informed decision.