Once your Initial Enrollment Period comes around, you will have a very important decision to make: will you go with Original Medicare or Medicare Advantage? The answer isn’t cut and dry.
Depending on factors like where you live, your specific medical needs, and what you can afford, one of these plans may be much better for you than the other. Or you could find yourself in a position where the costs and benefits for you are so similar that it’s hard to pick the right one. But if you keep reading, we can help you find out.
The Basics of Original Medicare
Medicare is a government-run and government-sponsored program designed to cover most of your medical expenses during your retirement years. Doctors and medical care facilities across the country almost universally accept Medicare.
But not all doctors and facilities accept Medicare assignment. If you are unsure whether the places you are going for your care accept Medicare assignment, be sure to call ahead and ask so that you don’t receive charges for out-of-pocket expenses.
There are two mandatory parts to Original Medicare which you must enroll in if you do not have creditable coverage from an employer. The first one is Medicare Part A. Medicare Part A covers the majority of your hospital expenses should you need inpatient treatment at a local hospital facility.
Part A also includes things like hospice care, skilled nursing facility care, and your first three pints of blood transfusions.
Next, there’s Medicare Part B. Medicare Part B covers most of the medical care you receive outside of a hospital, hospice care, or a skilled nursing facility. This includes things like preventative care, durable medical equipment (example: an adjustable bed), outpatient care such as minimally invasive surgeries or physical rehabilitation, and more.
You will have to pay a monthly premium for Medicare Part B as well as a 20% coinsurance cost associated with the care you receive.
What Original Medicare Doesn’t Cover
Unfortunately, Medicare does not cover any of the following:
- Medicare Part A coinsurance and hospital costs — especially those you incur after you have exhausted all of your Medicare benefits during a given benefit period
- Your Medicare Part B coinsurance and copayments
- Any blood transfusions you require after your first 3 pints
- Coinsurance and copayments associated with Part A hospice care
- Coinsurance associated with skilled nursing facility care
- Your Medicare Part A and B deductibles
- Medicare Part B excess charges
- Emergency care if you are traveling abroad
- Prescription drugs
- Vision coverage
- Dental coverage
- Hearing aid coverage
Although Original Medicare doesn’t cover any of these things, that doesn’t mean you have to pay for them 100% out of pocket. You have the option to purchase varying types of supplemental insurance in order to help reduce your costs. These include:
Private insurance for your vision, hearing aid, and dental needs
There are plenty of private insurance companies across the country which offer these at a fairly low cost to you. You may even be able to find companies that are willing to offer exclusive discounts for beneficiaries if you look hard enough.
Medicare Part D prescription drug plan
The Medicare Part D prescription drug program is completely optional, as opposed to Medicare Parts A and B which are mandatory. Keep in mind that private insurance companies administer Medicare Part D prescription drug plans, have unique formularies which may or may not cover all the prescriptions you need, and costs will vary from one plan to the next.
Medicare Supplement (Medigap) Insurance
Medigap plans are specific insurance plans which are administered by private companies but tightly regulated by the government. There are 10 plans total which you can choose from with varying amounts of coverage.
These plans have designs to cover many of the benefits that Original Medicare doesn’t cover. The monthly premium you pay for your Medigap plan will depend on where you live, which plan you choose, your age when you enroll, and how early you enroll relative to when you enrolled in Original Medicare.
As you can see, even though Original Medicare doesn’t comprehensively cover everything, it still does cover quite a bit. For the gaps in coverage, plenty of other options exist that you can invest in to ensure the most comprehensive care possible for a fair cost.
Alternatively, you could get a very similar level of coverage — albeit in a different form — with Medicare Advantage.
The Basics of Medicare Advantage
Although Medicare Advantage is also known as Medicare Part C, it is not a part of Original Medicare. It is a separate animal all its own. This is because private insurance companies administer Medicare Advantage plans as opposed to the federal government.
They also have vastly different rules and regulations compared to Original Medicare. Basically, the only legal requirement that a Medicare Advantage provider has is to offer you at least the same benefits as Medicare Part A and Medicare Part B. Beyond that, it’s like the wild west for healthcare.
There is so much flexibility when it comes to Medicare Advantage that for most recipients, no two plans are the same. These plans are highly customizable with most giving you the option of adding supplemental coverage like dental, hearing aid, vision, and prescription drug coverage as needed.
But all of these extra benefits are managed by the same company that manages your Medicare Advantage plan; you won’t be dealing with separate insurance companies like you would purchasing supplemental coverage for Original Medicare.
Since the federal government is subsidizing your monthly premiums for Medicare Advantage, you could get all of this coverage for little to no monthly premium depending on where you live and how expensive your plan is.
Why Do People Choose Medicare Advantage?
However, there is a trade-off — the more coverage you add, the more expensive your monthly premium will be. So keep that in mind when you sit down with a Medicare Advantage insurance representative to create your plan.
Another big difference between Original Medicare and Medicare Advantage is how widely Medicare Advantage is accepted. Like most private health insurance plans, Medicare Advantage curates specific medical networks in order to make sure you get the best care at the most affordable price.
A medical network is a group of doctors and facilities who agree to work with your insurance company in order to get you your care at the lowest possible cost. Some networks are more limited than others, but the trade-off is that those networks are usually much more affordable than more open medical networks or going out of network.
What A Part C Plan Won’t Cover
In most cases, Medicare Advantage will cover everything you need and can afford to pay for. Obviously, if there are types of coverage that you cannot afford, you cannot add it to your plan (unless your financial circumstances change, that is).
But it is extremely rare to find healthcare benefits that a Medicare Advantage plan will not give you the option of adding to your policy. Because Medicare Advantage plans can be so comprehensive, under most circumstances, it is illegal for anyone to sell you supplemental coverage such as Medicare Part D or a Medigap plan. These laws are in place to protect you from wasting money on duplicate coverage that you don’t need.
The Best Reasons to Choose Original Medicare
For some, Original Medicare may be the better choice in comparison to Medicare Advantage. Here’s why:
- Original Medicare is more widely accepted than the restrictive medical networks relied upon by Medicare Advantage. If you live in a less densely populated area and have fewer health care options, Original Medicare and its nearly universal acceptance might be the better option.
- You also won’t need a referral for a specialist due to medical network restrictions; you can see anyone who accepts Medicare assignment and, if your treatment is deemed medically necessary, most if not all of those costs will be covered by Medicare.
- It can be easier to budget because most of the costs are fixed, like your monthly premium or your 20% coinsurance for Medicare Part B. Furthermore, these costs can be mitigated with the right kind of Medigap supplement coverage.
- Most of the time, you do not need pre-approval for any medically necessary supplies or services. With Medicare Advantage, however, you may need to frequently seek pre-approval in order to make sure the care or equipment you need are covered by your plan so that you don’t have to pay completely out-of-pocket for it.
The Best Reasons to Choose A Part C Plan
There are plenty of reasons why Medicare Advantage may appeal to certain beneficiaries more than Original Medicare would. Four of these reasons include:
- Lower costs for your medical care thanks to the medical networks’ restrictions. Joining a more inclusive medical network carries the potential to make your Medicare Advantage plan much more expensive.
- You don’t have to enroll in separate programs from different providers (like Medicare Part D, a Medigap supplement, or private coverage for vision/dental/hearing). With Medicare Advantage, a single company handles all of your medical benefits so that you don’t have to juggle your claims and medical costs between separate entities.
- Medicare Advantage has an annual out-of-pocket spending limit, as opposed to Original Medicare which has no annual cap on out-of-pocket expenditures. Depending on how expensive your plan is, you may be able to get a fancy “Cadillac” plan for little or no monthly premium since the government subsidizes your monthly premium up to a certain amount.
- Because private insurance companies administer Medicare Advantage plans, they function similarly to employer-sponsored private insurance plans and are therefore easier to navigate for most people.
- You can also get a flex card through Medicare Advantage. This is a debit card that can be used to buy medically necessary items.
What is the difference between Original Medicare and Medicare Advantage plans?
Medicare Advantage’s intent is to be an all-in-one plan, because it covers Original Medicare benefits, plus can add things like Part D and dental, vision, and hearing. However, with Medicare Advantage, you will very likely have a monthly premium.
What is the biggest disadvantage of a Medicare Advantage plan?
There are actually two of them. The first is the monthly premium. The second is the plan you purchase will have restrictions on where you can receive your care and cause you to stay in-network.
Which company has the best Medicare Advantage plan?
On an individual level, this is impossible to answer. The best plan for you will be the one that covers what you need at a price you can afford. However, overall, Kaiser Permanente has a 5.0 rating among users.
Blue Cross Blue Shield offers the nation’s largest network. As far as popularity goes, Unitedhealthcare leads the pack. If you care most about price, Aetna and SilverScript average a $7 per month premium.
How To Make Sure You Have Full Medicare Coverage
Choosing between Original Medicare and Medicare Advantage is a very big and important decision. Don take this lightly. But no matter which one you have, there can still be gaps in your coverage that you want to fill. That’s where Medicare Supplemental plans come into play.
These plans will help cover those things that Medicare or a Part C plan do not. In fact, we have licensed insurance agents standing by to provide advice and also show you your options involving Medigap plans.
The assistance from our agents is totally free to you, so give us a call today. Or quickly fill out our online rate form to get the best rates in your area.