Medicare is the federal health insurance program for Americans aged 65 and older. When you first gain Medicare eligibility, you have a choice between two main coverage options:
Original Medicare (Parts A and B) Medicare Advantage (also known as Medicare Part C)
The purpose of this article is to help you understand key pros and cons of Original Medicare and Medicare Advantage Plans, so you can determine which may be better for your personal healthcare needs and budget in retirement.
- Part A: Hospital/Inpatient Coverage
- Part B: Outpatient/Medical Coverage
- Monthly premium required for Part B
- Can add supplemental Medigap Plan
- Does not cover prescriptions
Original Medicare includes Part A (hospital insurance) and Part B (medical insurance) provided by the federal government.
- When you turn 65, most people automatically qualify for premium-free Part A hospital coverage based on their work history
- You must actively enroll in Medicare Part B and pay a monthly premium based on income
- Part B covers things like doctor visits, preventive care, lab tests, medical equipment
- Costs like deductibles, coinsurance apply
- Can add a Medigap Plan to cover Original Medicare costs
- Does NOT include Medicare Part D prescription drug coverage
|Original Medicare Benefits
|Hospital inpatient care, skilled nursing facility care, other services
|Doctor visits, preventive services, lab tests, medical equipment and supplies
|Does not include Medicare Part D drug coverage
Medicare Advantage Plans
- Part A, Part B + Part D Covered
- Extra benefits – dental, vision, wellness
- Costs vary by plan
Medicare Advantage Plans are an alternative to Original Medicare offered by private health insurers. These plans, also known as Medicare Part C, bundle Original Medicare benefits together and often include Part D prescription drug coverage:
- Includes all coverage under Part A and Part B
- Usually covers prescriptions under Part D
- Plans may offer additional benefits like dental, vision, hearing aids, gym memberships
- Monthly premiums, copays, deductibles can vary a lot by plan
- Must follow plan provider network rules
|Medicare Advantage Plan Features
|Part A hospital, Part B medical, and usually Part D prescriptions
|Dental, vision, hearing, wellness programs, transportation
|Premiums, deductibles, copays vary by plan
Pros of Medicare Advantage Plans
Many Medicare Advantage Plans have lower out-of-pocket costs compared to Original Medicare. With higher deductibles and 20% coinsurance under Original Medicare, plans that offer $0 premiums or very low copays and deductibles can provide substantial savings for those that require significant medical services.
Nearly all Medicare Advantage Plans include valuable extras like dental, vision, hearing coverage plus wellness programs like gym memberships. These benefits would require separate supplemental plans under Original Medicare at added cost.
Rather than juggling 3-4 plans to get needed coverage, Medicare Advantage offers simplicity of one plan for all medical care, prescriptions, dental and vision needs. Generally less paperwork too!
Cons of Medicare Advantage Plans
Limited Provider Choice
Medicare Advantage Plans have restricted provider networks so choice of doctors, specialists and hospitals may be far less than under Original Medicare depending on the plan.
Referrals Needed to See Specialists
Unlike Original Medicare, most Medicare Advantage Plans require you to get a referral from your primary doctor before visiting a specialist like a cardiologist or dermatologist.
Prior Authorization Requirements
Many medical services under Medicare Advantage require your provider to get prior authorization from the plan before proceeding. This can lead to delays receiving care.
Higher Costs for Out-of-Network Care
One major drawback of Medicare Advantage Plans is much higher costs for visiting out-of-network doctors or hospitals without a referral, except in emergencies or urgent cases when traveling.
Choosing a Plan
During Medicare’s annual Open Enrollment Period each fall, carefully compare your options including:
- Available Medicare Advantage Plans where you live
- Estimated premiums, deductibles and typical copays
- Doctor/hospital networks and prescription formularies
- Ratings for quality and customer satisfaction
Compare overall costs for Original Medicare plus a Medigap policy versus Medicare Advantage Plans with similar benefits to make the best choice based on your healthcare priorities and budget.
In summary, while Original Medicare offers flexible provider choice yet high out-of-pocket costs, Medicare Advantage trades some freedom to see specialists or use out-of-network providers for lower copays, extras like dental/vision benefits, and built-in prescription coverage. Verify full plan details for 2023 and make sure to enroll during Medicare’s Open Enrollment to avoid penalties and delays accessing coverage. With sufficient research during this period, you can select the Medicare option that best aligns with your healthcare needs and budget.
We’re Here to Help
You do not have to spend hours reading articles on the internet to get answers to your Medicare questions. Give the licensed insurance agents at Manatee Insurance Solutions a Call at (352) 221-3779. You will get the answers you seek in a matter of minutes, with no pressure and no sales pitch. We are truly here to help.
Frequently asked questions
What is the biggest advantage of Medicare Part A and B Advantage Plans?
The biggest advantage of Medicare Part A and B Advantage Plans is that they often provide broader coverage than Original Medicare. Medicare Advantage Plans also typically include prescription drug coverage and may offer additional benefits like dental, vision, and hearing care, which are not covered under traditional Medicare.
By choosing a Medicare Advantage Plan, does it mean I will pay less out-of-pocket?
Medicare Advantage Plans often come with a limit on out-of-pocket expenses, meaning that once you reach this limit, the plan covers 100% of your healthcare costs for the rest of the year. This feature is beneficial and can offer financial protection that Original Medicare doesn’t provide.
What does Medicare Part B premium mean when discussing the best Medicare Advantage Plan for 2022?
Medicare Part B premium is the monthly amount that all Medicare beneficiaries must pay to get Part B coverage. When you sign up for a Medicare Advantage Plan, you still have to pay your Part B premium, along with any premium the plan may charge.
In terms of choosing a Medicare Advantage Plan, what does ‘need a referral’ mean?
Some Medicare Advantage Plans operate on a network of doctors and hospitals, and you may need a referral from your primary care doctor to see a specialist. This requirement is not present in Original Medicare.
What are the pros and cons of Medicare Advantage vs Traditional Medicare?
The major pros and cons of Medicare Advantage vs Traditional Medicare include the factors of cost, coverage, and choice. Medicare Advantage Plans often provide broader coverage, including prescription drugs and other services not covered by Original Medicare. However, they may restrict your choice of service providers and may require a referral from a primary doctor to see a specialist.
What is the downside or disadvantage of Medicare Advantage Plans?
Disadvantages of Medicare Advantage Plans can include limited provider choice and requiring referrals to see specialists. Some people may find the rules of the insurance plan they choose somewhat inconvenient. On the other hand, traditional Medicare offers more freedom to choose doctors and hospitals.
Do Medicare Advantage Plans cover the same basic benefits as Original Medicare covers?
Yes, Medicare Advantage Plans are required to cover the same basic services that Original Medicare covers – Part A (home health care, hospice, hospital visits, and nursing home care) and Part B (outpatient care, doctors’ services, preventive services, and medical equipment).
Are there different types of Medicare Advantage Plans?
Yes, there are several types of Medicare Advantage Plans, including Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), Private Fee-for-Service Plans (PFFS), Special Need Plans (SNPs), and Medicare Medical Savings Account Plans (MSAPs).
When is the best time to sign up for Medicare Advantage Plan?
The best time to sign up for a Medicare Advantage Plan is during the initial enrollment period, which is when you first become eligible for Medicare, or during the Medicare open enrollment period, which typically takes place from October 15 to December 7 each year.
Are Medicare Advantage enrollees still considered Medicare beneficiaries?
Yes, even if you are enrolled in a Medicare Advantage Plan, you are still considered a Medicare beneficiary. It just means that instead of receiving benefits directly from Original Medicare, you receive them from the private insurance company that operates the Medicare Advantage Plan you have chosen.