The Big Choice: Original Medicare vs. Medicare Advantage

Which path you take will determine how you get your medical care — and how much it costs

Your first significant choice should be whether to sign up for original Medicare, which is administered by the federal government, or a Medicare Advantage plan, which is a commercial insurance alternative, as you consider how Medicare will cover your healthcare requirements.

Imagine having to choose between going to the buffet (original Medicare) or purchasing the prix fixe dinner (Medicare Advantage) at a restaurant, where the courses have already been chosen for you.

Part A (hospital care) and Part B (doctor visits, lab tests, and other outpatient treatments) are included in your package if you choose original Medicare (prescription drugs). Since a private insurer has already combined parts A, B, and nearly invariably D into one comprehensive plan, if you choose to go with Part C, a Medicare Advantage plan, it will be more like a set menu.

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Regardless of the plan you select, some components of your care will remain the same. Both options will cover any preexisting problems you may have and allow you to obtain prescription drug coverage.

The way you utilize Medicare will alter significantly depending on whether you choose original or Advantage, though. Here is an evaluation of how they differ.

Going to the doctor’s

You can select any primary care physicians and specialists who accept Medicare under original Medicare. No referrals are required, and you won’t need to fret if your doctor decides to leave a plan’s network. Only 1% of doctors refuse to take Medicare patients, according to the Kaiser Family Foundation. For instance, 83 percent of primary care doctors welcome new Medicare patients. You won’t need to switch providers because there is a good probability that the doctor you are currently seeing will take Medicare.

You will essentially be joining a private insurance plan through Medicare Advantage, much like you likely did through your work. Health maintenance organizations (HMOs) and preferred provider organizations are the most prevalent types (PPOs). You would typically have a primary care physician who would direct your care under Medicare Advantage’s managed care programs, necessitating a referral to a specialist. Compared to PPOs, HMOs often offer a more limited selection of medical providers. The appeal of Medicare Advantage plans has grown. A little over 30 million Medicare members, or 47% of all beneficiaries, are enrolled in one of these plans, and the typical enrollee has access to more than 40 such plans.

Covered care

While the majority of your medical expenses will be covered by Medicare, there are several items that the program normally doesn’t cover, such as cosmetic surgery or regular dental, eye, and hearing care. But there are also variations in the services that you receive financial assistance for.

Hospitalizations, doctor visits, diagnostic testing including X-rays and other scans, blood work, and outpatient surgery are just a few of the medical services that are covered by original Medicare.

You will receive all the services for which you are qualified under original Medicare if you choose Medicare Advantage. Additionally, some MA plans provide services that the initial option did not. Some dental, eye, and hearing treatments are among them. Some MA plans also include memberships in health clubs. The federal government has also been expanding the services these plans can provide in recent years, such as home improvements like wheelchair ramps to help Medicare beneficiaries stay at home, providing transportation to doctors’ offices, and covering some over-the-counter medications, acupuncture, and meal delivery. Various services are offered depending on the plan.

Costs

The federal government determines the Part A (hospitalizations) and Part B (prescription drugs) premiums, deductibles, and coinsurance amounts under original Medicare (physician and outpatient services). For instance, beneficiaries under Part B are paying for 20% of a doctor’s visit or lab test expense. Although premiums and copays vary by plan, the government also establishes maximum deductible rates for the Part D prescription drug program. Several beneficiaries who choose original Medicare also buy supplemental insurance, commonly known as Medigap, to cover many out-of-pocket expenses that Medicare officials estimate could total in the thousands of dollars annually. Out-of-pocket expenses are not subject to an annual cap.

Enrollees in Medicare Advantage are still required to pay the annual Part B payment established by the government as well as perhaps an additional premium for the MA plan. However, the majority of MA plans have defined copay rates for a physician visit, which often means lower out-of-pocket payments than original Medicare. This is in contrast to paying the 20% coinsurance amount for doctor visits and other Part B services. The annual cap on out-of-pocket payments is another feature of MA plans.

Additionally, you should determine whether you qualify for Medicaid or any of the additional aid plans that Medicare provides to low-income participants.

Logistics

To receive all of the services offered by original Medicare, you will probably need to enroll in all four of its components: Part A, Part B, a Part D prescription drug plan, and supplemental or Medigap coverage. You will need to review the claims that doctors and hospitals submit to Medicare for each service.

A single plan that incorporates Part A and Part B is known as Medicare Advantage. Additionally, roughly 90% of MA plans also cover prescription medicines, saving you the hassle of signing up for a separate Part D coverage. For Advantage plans, there are no Medigap insurance options. The network of your doctors should be checked carefully to ensure they are all covered by the plan, but this may change over time.

Where you live

As long as the provider accepts Medicare, you can receive care under original Medicare anywhere in the United States.

Plans for Medicare Advantage are built on networks of healthcare professionals that are often self-contained in a particular region. Therefore, if you visit out-of-network doctors or have a vacation home where you frequently stay, your care may not be covered or you may be required to pay more for it. Furthermore, while MA plans are essentially accessible throughout the United States, the selection of plans is more constrained in rural locations.

Your medical expenses abroad are not covered by Medicare Original or Medicare Advantage.