When it comes to the federal government’s Medicare program, you have a couple of choices on how to receive your Medicare benefits. The most confusing part of Medicare healthcare is learning and deciphering the difference between Original Medicare and Medicare Advantage plans.

Below we’ll provide information on how both work and educate you on the differences.

Understanding the Pros and Cons of Medicare Advantage vs. Original Medicare

You must first understand that Medicare consists of four parts, and Medicare Part C is the same as Medicare Advantage. Next, let’s discuss what aspects of Medicare are considered Original Medicare.

Original Medicare is used to describe Medicare Part A hospital insurance and Medicare Part B medical insurance.

Medicare Part A covers inpatient hospital stays, skilled nursing facilities, and hospice care. At the same time, Medicare Part B handles outpatient medical services and durable medical equipment.

Original Medicare doesn’t include Part D prescription drug coverage. You can, however, add Medicare Part D for an additional premium.

Medicare Part C or Medicare Advantage plans will combine the benefits of Medicare Parts A and B into one plan.

These programs can include prescription drug coverage and additional benefits that Original Medicare doesn’t offer. Next, we’ll go over some of the differences between the two.

Differences Between Original Medicare vs. Medicare Advantage

While these two coverages have similarities, there are also some stark differences. Medicare Advantage plans are required to cover the same benefits as Original Medicare. Their coverage rules and Medicare costs differ.

Networks

Original Medicare allows you to use any doctor nationwide that accepts Medicare. There isn’t a need for referrals or authorizations to see specialists. Medicare Advantage plans are network-based programs.

Many are health maintenance organizations and preferred provider organization plans. HMO plans require all items and services to be

performed by in-network providers except for an emergency.

Referrals and authorizations will be required for specialist doctor visits, tests, and treatments. PPO plans are also network-based. However, you can visit out-of-network providers for a higher cost share.

With a PPO, there isn’t typically a referral needed. However, there will still be authorizations required for tests and treatments.

Costs

Original Medicare and Medicare Advantage plans require you to continue paying your Medicare Part B premiums. Costs associated with Original Medicare are standardized. The costs are always the same.

There is a large reoccurring Part A deductible, and daily copays for Part A. Medicare Part B has a small annual deductible, followed by a 20% coinsurance and a potential for a 15% excess charge.

Medicare doesn’t have a cap on what a Medicare beneficiary can spend over the year. Since private insurance companies contracted with the Centers for Medicare and Medicaid Services to run these Medicare Advantage plans.

They set their cost share amount and authorization rules. Most items and services will have a fixed copay and have an out-of-pocket maximum for how much plan members can spend on medical services for the year.

Pros and Cons of Original Medicare

Pros

  • No network restrictions
    • Freedom to choose the doctors and hospitals you want to use
  • Coverage is the same regardless of where you’re
  • You can add a Medicare Supplement health insurance to cover most or all of your cost-share
    • Enrollment into specific Medigap policies could include a foreign travel benefit.
  • You can choose a Part D prescription drug plan that’s catered to the prescriptions you take

Cons

  • No out-of-pocket limit on medical costs
  • Only includes medically necessary benefits
  • Unpredictable costs
  • Must pay an additional monthly premium for drug coverage

Pros and Cons of Medicare Advantage plans

Pros

  • Combines Medicare benefits into one easy-to-use plan
  • Can include prescription drug coverage
  • It can consist of extra benefits not covered by Medicare, such as;
    • Dental care
    • Vision care
    • Hearing coverage
    • Gym membership
    • Over-the-counter allowances
    • and more
  • Predictable fixed copays for most services
  • Low to $0 premiums

Cons

  • Tight networks
  • Many plans require services to be provided by providers in the plan’s network.
  • Must see a primary care doctor and get a referral for specialist services.
  • Non-medical plan administrator that processes or denials approvals for services
  • Coverage benefits aren’t available out of network on HMO plans, and out-of-network services cost more on PPO plans.

How does AEP affect Original Medicare vs. Medicare Advantage plans?

The Annual Enrollment Period is more geared toward Medicare Advantage plans and Medicare Part D prescription drug coverage. During AEP, you can do the following:

If on Original Medicare:

  • Enroll in a Medicare Advantage Plan
  • Enroll in a Part D prescription drug plan
  • Change from one Part D plan to another
  • Cancel your Part D plan completely

If you’re enrolled in a Medicare Advantage plan:

  • Change from one Medicare Advantage plan to another
  • Drop your Medicare Advantage plan and return to your Original Medicare
    • and add a Part D plan

Deciding if Original Medicare or Medicare Advantage Plans are Right for You

Here is a checklist beneficiaries can use to help decide which type of Medicare coverage is right for them.

Choose Original Medicare if:

  • You want provider flexibility
  • If you’re a frequent healthcare user
  • Can afford a Medicare Supplement Insurance plan
  • Plan to spend your retirement traveling
  • Like to minimize risk

Choose Medicare Advantage if:

  • You live in an area with a broad network
  • Can’t afford a Medicare Supplement Insurance plan
  • Don’t mind getting referrals

If you have significant health conditions such as cancer, end-stage renal disease, or diabetes complications, Original Medicare and a Medicare Supplement plan will provide you with more protection and less overall costs. Medigap policies will help cover the out-of-pocket costs left over by Original Medicare.

Depending on the Medicare Supplement health plan you enroll with, you could have little or even no cost-sharing related to your medical care.

FAQs

When is the Open Enrollment Period?

The Medicare Advantage Open Enrollment Period runs annually from January 1st to March 31st. During this time, Medicare beneficiaries that are enrolled in a Medicare Advantage plan can make one change to their coverage.

How does Medicaid affect Medicare?

Beneficiaries that enrollees of both Medicare and Medicaid will have some or all of their Medicare costs covered by the Medicaid and Medicare Savings Programs. These dual-eligible beneficiaries can also enroll in Medicare Advantage special needs plans explicitly designed to help those with low income.

How much does a Medicare Supplement cost?

Medigap costs will vary depending on several factors. Some of the most significant considerations are which plan you choose, your age, location, and if you’re a tobacco user. The average cost for a Medicare Supplement Plan G is around $150 per month.

Can I enroll in a Medicare Advantage plan and a Medicare Supplement?

No! When you enroll in a Medicare Advantage program, the Part C plan will take over the administration of your Medicare benefits. Medicare Supplements will only coordinate with Original Medicare. Some Medicare Advantage enrollees will enroll in a hospital indemnity plan and a critical illness plan to help cover some of the gaps.

Can I enroll in both Medicare Advantage and Part D prescription drug plans?

No! In most cases, if you want Medicare drug coverage, you can enroll in a Medicare Advantage plan that includes drug coverage. Otherwise, stay with Original Medicare and add a Part D plan. The only exception would be if you enrolled in a private fee-for-service (PFFS) Medicare Advantage plan that didn’t include drug coverage.

Get Help Choosing Between Original Medicare vs. Medicare Advantage Plans

You may still have additional questions even with the help we provided above. The quickest and easiest way to answer these questions is by speaking to a licensed insurance agent specializing in Medicare. Our agents can answer any additional questions and provide further education on all types of Medicare coverage.

For assistance with your supplemental Medicare plans, give us a call. If now isn’t a good time, you can fill out our online request form, and we’ll have one of our specialists reach out to you.

Written By:
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Lindsay Malzone, Lindsay Malzone is the Medicare editor for Medigap.com. She's been contributing to many well-known publications since 2017. Her passion is educating Medicare beneficiaries on all their supplemental Medicare options so they can make an informed decision on their healthcare coverage.
Reviewed By:
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Rodolfo Marrero, Rodolfo Marrero is one of the co-founders at Medigap.com. He has been helping consumers find the right coverage since the site was founded in 2013. Rodolfo is a licensed insurance agent that works hand-in-hand with the team to ensure the accuracy of the content.