Should I Choose Medicare or Medicare Advantage?

Most Americans know about Medicare, the government healthcare option, but many don’t realize how it compares to Medicare Advantage, which is offered by private companies.

There are many differences between the two, including the various doctors one can seek care from, differences in cost, and the range of coverage between plans. While this article provides helpful comparison when choosing a health care plan, each person should choose a plan that best fits their health care needs.

Doctor and hospital choice

The first difference between traditional Medicare (also known as Original Medicare) and Medicare Advantage is the doctors and hospitals that each plan covers.

Original Medicare typically allows patients to visit any provider in the U.S. that accepts Medicare.

Alternatively, Medicare Advantage is only accepted by providers within the plan network. Further, if a patient needs to see a specialist, a referral is generally not needed with Original Medicare, whereas Medicare Advantage may require one.

Due to the more restricted network of Medicare Advantage plans, individuals considering these options should contact their current healthcare providers to confirm acceptance of Advantage plans. This step is particularly crucial for those in rural areas, where choices may be limited. You should also be aware that these networks do change from year to year based upon providers contracting with carriers.

Cost comparison

A primary difference between Original Medicare and Medicare Advantage is the cost. The following costs are typically associated with Original Medicare:

• For services such as doctor visits, flu shots, health screenings and medical supplies—otherwise known as Part B services—the patient will pay coinsurance, which is 20% of the Medicare-approved amount after the deductible is met.
• There will be a monthly premium for Part B services. Further, there will be an additional premium if the patient enrolls in Part D—otherwise known as Medicare drug coverage.
• Unless the beneficiary is enrolled in supplemental coverage, such as Medicare Supplement Insurance (Medigap), there is no yearly limit on out-of-pocket costs.
• Medigap or coverage from a former employer can help pay remaining out-of-pocket costs, such as the 20% coinsurance.

For costs under Medicare Advantage, consider the following:

• The out-of-pocket cost will vary by the services received.
• Like Original Medicare, the patient must pay a monthly premium for Part B services. Patients will also have to pay the plan’s premium. However, this premium may help pay all or a portion of the Part B premium and most plans also include Part D coverage.
• There is a yearly limit on what a patient pays for out-of-pocket services for Part A—hospital stays, nursing services, lab tests, etc.— and Part B services. Once this limit is reached, all further Part A and B services are covered for the remainder of the year.
• Unlike Original Medicare, Medigap is neither a necessity nor an available option.

Coverage differences

When it comes to coverage, Medicare Advantage generally covers a little bit more than Original Medicare. Original Medicare covers most medically necessary services, such as those considered Part A and Part B services but does not include other benefits like vision and dental care. Alternatively, Medicare Advantage covers all the medical services that Original Medicare covers, and it often also includes additional benefits, such as eye exams and dental services.

Another key difference in coverage relates to the Medicare drug plan—Part D.

Part D is included in most Medicare Advantage plans and patients with those plans cannot join a separate Medicare drug plan. Alternatively-patients with Original Medicare do not automatically get Part D coverage; they must join a separate Medicare drug plan.

Further, Original Medicare usually does not require that patients get a service or supply request approved in advance for it to be covered. On the other hand, Medicare Advantage generally requires that services and supply requests are approved ahead of time for them to be covered.

Lastly, both Original Medicare and Medicare Advantage generally do not provide medical care outside of the U.S. Those with Original Medicare may have the option to purchase Medigap that covers foreign emergency care. For Medicare Advantage policyholders, specific plans may provide a supplemental benefit that extends to foreign emergency services.

Medicare or medicare advantage?

Ultimately, the choice between Original Medicare and Medicare Advantage will depend on everyone’s medical needs and priorities. Generally, Medicare Advantage covers most of what Original Medicare covers and provides some supplemental benefits. Beyond coverage, the cost of each option and the providers that accept each option will differ.

If you or an employee at your company have more questions about the differences between Original Medicare and Medicare Advantage, we are able to help through Miller Milestones. Contact us or your account team to learn more.