Medicare Advantage (MA) plans are increasingly popular alternatives to Original Medicare. But how exactly are MA plans different? Understanding the key distinctions can empower you to choose the right Medicare coverage option. This comprehensive guide will explain the critical differences between Medicare Advantage Plans and Original Medicare when it comes to coverage, costs, provider networks, benefits, and more.
What are Medicare Advantage (MA) Plans?
Medicare Advantage, also known as Medicare Part C, allows private insurance companies to provide Medicare benefits through Medicare-approved plans. Many Medicare Advantage Plans offer:
- HMOs (Health Maintenance Organizations)
- PPOs (Preferred Provider Organizations)
- PFFS (Private Fee-for-Service)
- SNPs (Special Needs Plans)
Medicare Advantage Plans contract with Medicare to provide enrollees with all the coverage of Part A and Part B. Most plans may also include prescription drug coverage (Part D).
With Medicare Advantage, you still have Medicare but get your Medicare Plan benefits through the private plan rather than Original Medicare. Costs, provider networks, and rules can vary greatly between MA plans.
What is Original Medicare?
Original Medicare consists of Part A (hospital insurance) and monthly Part B premium (medical insurance). The federal government directly administers these coverage components.
With Original Medicare, you can go to any doctor or hospital in the U.S. that accepts Medicare. Original Medicare does not usually cover prescription drugs (Part D Plan), so you may need to purchase a separate standalone Part D prescription drug plan.
Most people on Original Medicare use supplemental Medigap Plans to help cover out-of-pocket costs. You also have the option to pair Original Medicare with a standalone Part D prescription plan.
Difference Between Original Medicare and Medicare Advantage?
Medicare Advantage Plans and traditional Medicare have important differences across these key areas:
- Provider networks
Learning these distinctions can help you determine if an MA plan or Original Medicare makes more sense for your health and budget needs when choosing between Original Medicare and Medicare Advantage.
Why Learn the Differences?
Understanding how Original Medicare and Medicare Advantage differ provides the knowledge to make an informed choice during Medicare open enrollment. Key reasons to learn the contrasts:
- Allows you to compare coverage to see if MA or Original Medicare is better for your needs
- Helps compare costs including monthly premiums, deductibles, copays
- Shows how networks and provider choice differ between MA and Original Medicare
- Highlights extra benefits you can get with an MA plan
- Prepares you to make changes when switching from Original Medicare to Medicare Advantage or vice versa during Medicare open enrollment
Now let’s dive into the key differences between Medicare Advantage and Original Medicare across different categories.
A major distinction lies in how coverage works with Original Medicare vs. Medicare Advantage:
- Coverage managed directly by federal government
- Pay providers for each service rendered
- No network restrictions on providers
- Covers medically necessary services like outpatient
- Need Medigap or other supplement to cap costs
Medicare Advantage Plans cover
- Coverage administered through private insurance companies
- Insurer paid fixed rate per member by Medicare
- Networks limit provider choice except PFFS plans
- Must cover all Part A and Part B services
- Often built-in cap on out-of-pocket spending
Medicare Advantage relies on private insurers while Original Medicare is directly run by the government. This key structural difference informs many other contrasts between the two.
Costs also diverge between Medicare Advantage and Original Medicare:
Original Medicare Costs
- Part B premium
- 20% coinsurance for most services
- No annual cap on out-of-pocket spending
- Need supplemental coverage to limit costs
Medicare Advantage Costs
- Usually $0 premium beyond Part B
- Copays and deductibles vary by plan
- Out-of-pocket max protects against high costs
- Extra benefits often included
- Part D drug coverage usually included
As you can see, Medicare Advantage offers more cost predictability. With Original Medicare, you need supplemental plans to get an out-of-pocket cap.
Provider Network Differences
Another big variance involves provider networks:
- Go to any doctor/hospital accepting Medicare nationwide
- No network restrictions or primary care requirements
- Networks often limit provider choice except PFFS
- May need referrals to see specialists (HMO)
- Usually need to choose an in-network PCP
Original Medicare allows you to see any provider willing to bill Medicare throughout the entire U.S. Medicare Advantage networks are more restrictive in most cases.
Extra Benefits of Medicare Advantage
A major perk of Medicare Advantage is access to extra benefits:
- Covers medically necessary care such as inpatient
- No coverage for vision, dental, hearing aids
- No gym membership or over-the-counter benefits
- Often covers dental, vision, hearing, fitness
- Many plans include OTC drug benefits
- Potential for lower Rx costs
If you want benefits beyond basic medical coverage, an MA plan can provide advantages over Original Medicare. These extra benefits often include dental, vision, gym memberships, and more.
How to Choose Between MA and Original Medicare
With all these contrasts between Medicare Advantage and Original Medicare, how do you pick the right option?
- Understand your health needs and preferred providers
- Compare coverage differences between MA plans and Original Medicare
- Assess cost differences including premiums, deductibles, and cap on spending
- Check if your doctors are in-network with MA plans
- Determine if MA plan benefits are worth provider restrictions
- Enroll during Medicare open enrollment
The right choice depends on your specific healthcare needs and budget. Some may prefer Original Medicare plus a Medigap Plan while others benefit more from the advantages of Medicare Advantage.
Medicare Advantage Plan vs Original Medicare: Key Takeaways
- Original Medicare is managed directly by the government while MA coverage is administered by private insurance companies.
- MA plans cap out-of-pocket spending, while Original Medicare has no limit without supplemental coverage.
- MA plans restrict provider choice through networks while Original Medicare allows you to see any doctor.
- Medicare Advantage offers extra benefits like dental, vision, and gym memberships.
- Compare coverage, costs, providers, and benefits when choosing between MA or Original Medicare.
Hopefully this guide provided a comprehensive overview explaining how Medicare Advantage and Original Medicare differ. Understanding these distinctions will enable you compare plans to determine the right Medicare option during open enrollment.
We’re Here to Help
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What is the difference between Original Medicare and a Medicare Advantage Plan?
Original Medicare parts a and b is a fee-for-service health plan run by the federal government, while Medicare Advantage Plans are run by private insurers approved by Medicare.
Do all doctors accept Medicare?
Most doctors accept Medicare, but you’ll want to check that the specific doctors you want to see accept your Medicare Plan’s payment and are in its network if you have an MA plan.
How can I switch from Original Medicare to a Medicare Advantage Plan?
During the Annual Enrollment Period from October 15-December 7 each year, you can switch from Original Medicare to an MA plan starting January 1 of the following year.
What should I consider when choosing between Original Medicare and an MA plan?
Key factors include provider networks, prescription coverage, costs, and flexibility to see any Medicare doctor versus just in-network.
What is the difference between Original Medicare and choosing a Medicare Supplement Plan?
Original Medicare pays for much but not all covered services. A Medigap Plan fills gaps in Original Medicare coverage for things like copays and deductibles.
How do I get Medicare if I’m over 65?
You’ll need to enroll in Parts A and B during your Initial Enrollment Period which starts 3 months before your 65th birthday month and ends 3 months after.
Can I switch from Original Medicare to a Medicare Advantage Plan after my Initial Enrollment Period?
Yes, during the Annual Enrollment Period you can change from Original Medicare to an MA plan for coverage starting the following year.
What other options do I have if I am unhappy with my Medicare Advantage Plan?
During certain timeframes you may be able to switch back to Original Medicare, join another MA plan, or sign up for a Medicare Supplement Plan along with Original Medicare.