Medicare Advantage vs. Original Medicare: Which One Should You Go For?

Medicare Advantage vs. Original Medicare: Which One Should You Go For?

Identifying the best Medicare plan is often overwhelming for beneficiaries. What are the benefits of each? What are the distinct differences between the plans? Which one should you go for? To qualify for Medicare plans, you have to be 65 years or older. You’ll automatically be signed up if you receive social security payments unless you decide to opt out.

Original Medicare is available in part A, which mainly covers hospitalization expenses, and Part B for other medical expenses, including doctor bills, preventive screening, lab tests, etc. Medicare Advantage plan, on the other hand, is run by private companies but still regulated by the government. Some people prefer this plan compared to Original Medicare as some plans also include additional drug coverage.

Between Medicare Advantage vs. Original Medicare, which one is best suited for your needs? Here’s a complete guide into the pros and cons of each, their main differences, and the main factors you should consider before making a decision.

A Quick Overview of Original Medicare

Original Medicare is funded by the government and is used by most people as their primary cover. It has 2 main parts:

Medicare Part A: this mainly covers inpatient hospital services and comes with benefits such as hospice care, at-home health care, hospital visits, and limited skilled nursing facility care.

Medicare Part B: this part takes care of outpatient medical services and covers preventive services, treatment, and diagnostic services for various health conditions.

You should note that Original Medicare doesn’t cover hearing, dental or vision services, prescription services, or other healthcare needs. It’s, however, possible to purchase add ons such as Medicare supplement and Medicare Part D for additional coverage and prescription drug coverage, respectively.

Pros

  • Patient costs are lower.
  • You can seek medical services from all hospitals that accept Medicare.
  • If you purchase Medicare part D, you get prescription drug coverage.
  • Medicare supplement offers you additional coverage
  • Depending on your Medigap plan, the deductibles, copays, and coinsurance of Medicare part A and part B are usually paid in full.

Cons

  • This plan is only limited to the US.
  • Out-of-pocket expenses are high, especially without supplemental coverage

A Quick Overview of Medicare Advantage

This insurance plan is also referred to as Medicare Part C and is like a one-stop-shop for all your insurance needs. You, however, have to be enrolled in Medicare Plan A and Plan B for this option.

Medicare Advantage is only offered by private insurance companies but is still regulated by the government. It offers additional coverage not available in Original Medicare, such as dental, vision, and hearing services, fitness services, prescription drugs, etc.

Pros

  • It has more preventive care options.
  • It offers an all-in-one insurance cover.
  • It has cost-controls and out-of-pocket expenses are lower.
  • It offers similar coverage to Original Medicare but has extra benefits such as fitness services.
  • Some Medicare Advantage plans allow for out-of-state emergency care.

Cons

  • Beneficiaries are limited to hospitals within their network.
  • There are some barriers to accessing care, such as prior approval from your primary doctor before you can visit a specialist.
  • Once you enroll, you’ll be locked in the plan for at least a year, with 2 main exceptions.

Medicare Advantage vs. Original Medicare: What Are the Main Differences?

Both Medicare Advantage and Original Medicare cover some similar healthcare costs, including medical appointments and hospitalizations, but they are different. For instance, Original Medicare is a fully government-run option. Medicare Advantage, on the other hand, is only sold by private companies. These companies set the prices, but the coverage options are still regulated by the government.

Here’s a comprehensive overview of the main differences between Original Medicare and Medicare Advantage.

Costs

Regardless of which plan you go for, you’ll still pay deductibles, premiums, coinsurance, and copays. For Original Medicare, you’ll pay standardized costs for both Part A and Part B, including the premiums for part B. If you meet your deductibles, you’ll pay a 20% coinsurance every time you visit a participating provider.

The cost-sharing options on Medicare Advantage vary based on the plan you choose. Beneficiaries often incur additional premiums and often have to pay in-network care copayments.

Referrals

Original Medicare doesn’t need referrals for you to see a specialist. Medicare Advantage, on the other hand, requires a referral from your primary healthcare provider before seeing a specialist. If you go ahead and see a specialist without a referral, your insurance provider will likely not pay for the visit.

Out of Pocket Limits

One aspect that makes Original Medicare a bit expensive is that this coverage option doesn’t have an out-of-pocket limit. This means that you can pay for limitless healthcare expenses depending on your health condition. Medicare Advantage, on the other hand, usually has an annual out-of-pocket limit. Once you meet this limit, your insurance provider pays for the full cost of the covered benefits.

Provider Access

Original Medicare allows you to see any healthcare provider, whether they’re participating or non-participating, as long as the facility accepts Medicare insurance. For Medicare Advantage, you can only see providers within your network.

Drug Coverage

Original Medicare part A and Part B lack prescriptive drug coverage, and you have to sign up for Medicare Part D for this benefit. In most Medicare Advantage plans, prescriptive drugs are covered even if you may have to pay higher premiums.

Supplemental Insurance

If you have Original Medicare and need supplemental insurance, you can pay additional premiums for Medigap. For instance, if you’re enrolled in Original Medicare part A and Part B, you can enroll for Part D to enjoy prescriptive drug coverage.

If you have a Medicare Advantage plan, you can’t enroll in a Medigap plan.

Additional Benefits

Medicare Advantage has additional benefits such as dental, hearing, and vision services. You may, however, be required to pay more premiums.

Factors to Consider When Choosing Between Medicare Advantage vs. Original Medicare

When it comes to choosing the best healthcare insurance plan, a one-size-fits-all approach doesn’t work. You need to choose one based on your preferences and medical needs. Some of the factors you should consider include;

Health Conditions

If you suffer from chronic health conditions such as dementia, chronic heart failure, cancer, stroke, etc., you need to choose a plan that will help you reduce your long-term costs. Original Medicare has limited coverage, but there are Medicare Advantage plans that can cover such health conditions. 

Some of the benefits they offer include access to medication specifically for your position and coverage for case managers and specialists. You also get to save money on medical necessities, including medical equipment and laboratory tests.

Budget

It’s important that you consider the out-of-pocket costs you can afford annually. Original Medicare doesn’t have an out-of-pocket limit but is highly affordable. You only pay for Part A and part B premiums, and you may even qualify for premium-free Part A. For additional coverage, you have to get supplemental insurance. 

For Medicare Advantage, your premiums are higher and determined by the plan you choose. These plans, however, have an out-of-pocket limit. 

Medical Services

If you rarely visit healthcare providers and only require basic health insurance, Original Medicare is a great option. If you, however, require additional services such as annual dental care, you should opt for Medicare Advantage.

Frequency of Travel

Original Medicare offers nationwide coverage, so if you travel frequently, it will be a great option. It also allows you to visit any healthcare provider, as long as they accept Medicare insurance.

Medicare Advantage, on the other hand, is only limited to healthcare facilities within your network.

Provider Preferences

Original Medicare allows you to choose your preferred provider as long as they are within the Medicare network. You also don’t have to be within your locality to receive healthcare services. Medicare Advantage, on the other hand, doesn’t accord you that much freedom. Depending on the plan you’re on, you may incur extra costs for specialist referrals and out-of-network visits.

It’s important to note that it is possible to switch from Original Medicare to Medicare Advantage, or vice versa. There are 2 main instances in which you can make the switch; during the Medicare Special Enrollment Period for qualifying life events and at the Medicare Annual Enrollment Period. 

Medicare Advantage vs. Original Medicare: Make the Right Choice

The most effective way to find the best health insurance plan for you is by assessing all your medical & financial needs and then looking at the available alternatives. Both Medicare Advantage and Original Medicare have their distinct differences, benefits & drawbacks. For instance, if you only require basic healthcare services and travel frequently, Original Medicare will serve you well. On the other hand, if you need comprehensive medical service, you should go for a Medicare Advantage plan. 

The decision should be entirely based on your unique individual needs. As you compare the alternatives, you should consider factors such as your health conditions, drug coverage, budget, and provider preferences. You should also consider your travel frequency and out-of-pocket limits. 

Healthcare Solutions Team is a wholly-owned subsidiary of the National General Insurance Group and The Allstate Insurance Company.

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