Medicare can be an extremely confusing topic, especially Medicare Advantage, and especially when you’re first getting started. It’s important to really understand the difference between various types of coverage so you can find the plan that is right for you.
When you think of Medicare, many people think of Medicare Advantage plans and not of Original Medicare. These are actually two different and distinct things. Medicare is divided up into four parts, known commonly as Part A, Part B, Part C, and Part D. Original Medicare is comprised of Parts A and B, while Medicare Advantage falls under Part C, and stand-alone prescription drug plans fall under Part D.
Original Medicare (Parts A and B) are a federal health insurance program available to people aged 65 or older, and some people under 65 with certain disabilities. These are run and administered by the federal government. Medicare Advantage plans (Part C) are offered by private insurance companies that are contracted with Medicare to provide health benefits to Medicare beneficiaries. This is actually an alternative to, and a replacement for, Original Medicare. If you have a Medicare Advantage Plan, you don’t have Original Medicare, and you’re relying on a private healthcare company to administer your benefits! In this article, we’ll explore Medicare Advantage and how it differs from Original Medicare.
What is Medicare Advantage? Medicare Advantage plans are comprehensive health insurance plans that provide all of the same benefits as Original Medicare, including hospital insurance (Part A) and medical insurance (Part B). In addition to these benefits, Medicare Advantage plans often include extra benefits, such as vision, dental, hearing, and prescription drug coverage. These plans may also offer wellness programs, gym memberships, and other perks not available with Original Medicare.
How does Medicare Advantage differ from Original Medicare? While Medicare Advantage plans provide the same basic coverage as Original Medicare, there are some key differences between the two. Here are some of the most significant differences:
- Provider Networks: In Original Medicare, beneficiaries can typically see any doctor or healthcare provider that accepts Medicare. With Medicare Advantage plans, however, beneficiaries are usually required to see doctors and providers within a specific network. If you choose a plan with a provider network, you may be limited in your choice of doctors, hospitals, and other healthcare facilities. Your doctor may not be in your network, so you could be forced to change doctors to receive covered services. It’s essential to carefully investigate whether your doctor(s) accept your plan prior to signing up for a Medicare Advantage plan.
- Out-of-pocket Costs: Original Medicare has deductibles, copayments, and coinsurance that beneficiaries are responsible for paying. With Medicare Advantage, out-of-pocket costs can vary depending on the plan. Many Medicare Advantage plans have lower out-of-pocket costs than Original Medicare, but some plans may have higher out-of-pocket costs. Some plans also have maximum out-of-pocket limits to protect beneficiaries from high healthcare costs.
- Prescription Drug Coverage: Original Medicare does not include coverage for most prescription drugs. Beneficiaries of Original Medicare who want prescription drug coverage must enroll in a separate Medicare Part D plan. Many Medicare Advantage plans, on the other hand, include prescription drug coverage as part of the plan. If you need prescription drug coverage, it’s important to compare the costs and coverage of different Medicare Advantage plans to find the one that best fits your needs.
- Additional Benefits: Medicare Advantage plans often offer additional benefits that are not covered by Original Medicare, such as vision, dental, and hearing coverage, wellness programs, and gym memberships. These extra benefits can be especially appealing to beneficiaries who want more comprehensive coverage than what Original Medicare provides.
- Cost: While Original Medicare premiums are generally the same for everyone (depending on income), the cost of Medicare Advantage plans can vary depending on the plan and the insurance company offering the plan. Some Medicare Advantage plans have no additional premium beyond the monthly Medicare Part B premium, while others may have a higher premium.
Are there other options? Yes! While accepting Original Medicare, you can also purchase a Medicare Supplement plan. These are standardized plans created by the government and also offered by private healthcare companies. Unlike Medicare Advantage, these plans do NOT replace Original Medicare; rather, they are designed to supplement or fill in the gaps of Original Medicare to reduce your out-of-pocket expenses.
Which option is right for you? Deciding between Medicare Advantage, Original Medicare, and Medicare Supplement plans depends on your individual health needs and preferences, your resources and ability to pay, your desire to use certain doctors, and numerous other factors. To decide between these options, we highly recommend speaking with one of our consultants who can help you evaluate what makes the most sense for your situation.