Medicare Advantage vs Medicare Supplements | Medicare Plan Finder

Original Medicare vs. Medicare Advantage

Anastasia Iliou Medicare, Medicare Advantage, Medicare Supplement, Medigap

The Annual Enrollment Period is quickly approaching and starting October 15, you will be able to switch Medicare Plans. Which do you favor in the battle of Medicare vs Medicare Advantage? If you’re not quite sure, we’re here to help! By understanding the basic principles of each, you will be better prepared to make that decision.

What is Medicare?

Medicare is operated under the federal government and covers a variety of health care expenses and provides benefits for seniors over 65 as well as those with Social Security benefits or certain health conditions. There are many parts, policies, and new standards associated with Medicare. We get it – it’s confusing! It’s important to understand the history of Medicare Part A B C D, because AEP is right around the corner!

Created in 1965, Original Medicare is a federally-regulated healthcare program designed largely for senior citizens. Original Medicare includes Part A (hospital coverage) and Part B (medical coverage).

Part A covers inpatient and outpatient care at hospitals, nursing homes, hospice care, and home health services. Part B covers doctor visits and ambulance rides. Most beneficiaries receive Part A for free. Most people pay the same rate for Part B coverage, but a small number of beneficiaries may have income-adjusted premiums.

Original Medicare allows beneficiaries to go to any provider that accepts Medicare, which is over 900,000 physicians nationwide! This means that no matter which Medicare provider you visit, the costs will stay the same. This is ideal for beneficiaries who travel often or want doctors in different locations.

If you are enrolled in Original Medicare, you are able to enroll in a Medigap plan. Medigap plans provide financial benefits for an extra monthly premium. This can include help paying your copayments, coinsurance, and deductibles. Additionally, some of these Medigap plans cover prescription drugs. However, if your plan does cover prescription drugs, you cannot purchase a separate drug plan.

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History of Medicare

National health coverage wasn’t even discussed until President Roosevelt in 1912. He ran on a platform that included providing health coverage to anyone who needed it. Flash forward to 1945 when President Truman took office. Within seven months, he called for a national health fund that would be available to all Americans.

Truman fought hard, but it took another 25 years before anything went into effect. In 1965, Lyndon B Johnson signed legislation that provided benefits for seniors over 65. As of 2018, the Centers for Medicare and Medicaid Services (CMS) estimate that over 58.5 million people benefit from Medicare. As more policies and new standards go into effect and technology creates healthcare innovations in this industry, Medicare will continue to evolve.

Medicare Part A B C D

Medicare is broken into specific parts and each part is unique. Original Medicare consists of Parts A and B. Part A covers inpatient hospital fees, hospice care, and home health services. Part B covers doctor services, outpatient care, and physical therapy.

Most beneficiaries receive Part A for free and Part B is covered by a monthly Medicare premium. Beyond Original Medicare, there are Parts C and D. Part C is Medicare Advantage (MA).

MA plans combine Part A (hospital fees insurance) and Part B (medical insurance) and usually prescription drug coverage. Part D is a standalone plan that is purchased separately on top of Original Medicare. It can help cover the cost of prescription drugs.

What is Medigap?

If you are enrolled in Original Medicare, you are eligible to purchase a Medigap plan. What is Medigap? Medigap plans help pay some of the cost that Original Medicare does not cover. This can include copayments, coinsurance, and deductibles. Medigap plans generally don’t cover vision or dental care but may include prescription drug coverage. They are sold by private insurance companies. You cannot be enrolled in a Medicare Advantage plan and Medigap, so it’s important to compare and evaluate your budget and needs.


Pros and Cons of Medicare

Some people love Medicare, and others don’t care for it.

Why Medicare is Awesome

Premiums: If you worked for most of your life, you won’t have to pay any premium for Medicare Part A!

Healthcare Innovation: Medicare has increased healthcare innovations in the medical market tremendously. Thanks to Medicare, millions of Americans suddenly have access to health coverage they otherwise would be unable to afford. Millions of dollars have been invested in healthcare innovation and development!

Medicare “Rules:” CMS has steady Medicare rules that help prevent fraud, waste, and abuse. Without breaking the Medicare Rules, Medicare agents and plans can’t take advantage of you!

Why Some People Dislike Medicare

Hospital Fees: Even with the help of Medicare, hospital fees can still cost a pretty penny. Medicare beneficiaries typically pay 20% of the total fee. Additionally, Medicare typically does not have a cap. This means that if you have a series of health issues within a year, you may be spending more than you originally budgeted.

Prescription Drug Coverage: Medicare does not cover prescription drugs. If you are looking to purchase drug coverage, you will need to purchase separate prescription drug coverage through Medicare Advantage or Part D.

Limitations: Original Medicare provides the same health coverage for everyone. There is no personalization or choosing the exact benefits you want, unless you enroll in Medicare Advantage. If you are seeking more than basic health coverage, an MA plan could be perfect for you.

Enrolling in Medicare Advantage
Enrolling in Medicare Advantage

What is Medicare Advantage?

The history of MA plans is relatively short compared to Original Medicare. Just like Medicare, MA plans have benefits for seniors over 65 and certain disabled persons. These plans are rising in popularity and may be the best option for you!

Medicare Advantage plans can allow you to have a monthly premium for all your additional benefits, like dental, vision, and prescription drugs. There is no hassle with sending payments for multiple plans. Some MA plans may offer a lower deductible in exchange for a higher monthly premium. This is a great option for healthy seniors and other Medicare eligibles. With MA plans, you only pay for the services you use rather than paying a higher upfront cost.

The History of the Medicare Advantage Program

Medicare Advantage plans were not offered until 2003. Since then, enrollment has tripled to 19 million beneficiaries according to the Henry J Kaiser Family Foundation. Medicare Advantage plans are available through private insurance companies and must cover the same benefits as Original Medicare. However, many MA plans offer extra benefits like vision and dental coverage and even SilverSneakers®. These plans have a set network of providers you must choose from, but don’t worry! There are many different networks and plans available.

Medicare Advantage (Part C) Popularity

According to the Henry J Kaiser Family Foundation, enrollment has tripled to 19 million beneficiaries since 2003. Medicare Advantage plans are available through private insurance companies and must cover the same benefits as Original Medicare. However, many MA plans offer extra benefits like vision and dental coverage and even fitness programs like SilverSneakers®. These plans have a set network of Medicare providers you must choose from, but don’t worry! There are many different networks and plans available.

Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs) are the most popular plans among Medicare Advantage.

HMOs:

An HMO, or Health Maintenance Organization, has a closed provider network. You’ll have to select one primary provider for most of your healthcare needs. HMOs may require you to get a referral for more severe injuries or illnesses.

PPOs:

PPOs, or Preferred Provider Organizations, allow you to see any doctor, but staying in your network you will save you money. Additionally, they don’t require referrals and like HMOs, they often cover Part D supplements.

Medicare Advantage plans have one monthly premium. There is no hassle with sending payments for multiple plans. Some MA plans may offer a lower deductible in exchange for a higher monthly premium. This is a great option for healthy seniors. With MA plans, you only pay for the services you use rather than paying a higher upfront cost.

Pros and Cons of Medicare Advantage

Why Medicare Advantage Plans are Awesome

Premiums: KFF reported that half of Medicare Advantage beneficiaries in 2019 pay no premium at all, and most others pay between $20 and $100.

Out-of-pocket Max: Although you pay a premium with both Original Medicare and Medicare Advantage, MA plans may offer a lower deductible in exchange for a higher monthly premium. Also, MA plans have a limit for your out-of-pocket costs, saving you even more in the long run!

Prescription Drugs: Prescription drug coverage is often included in Medicare Advantage plans. This allows you to bundle your health coverage – saving you money and creating more convenience for you!

Unexpected Benefits: Some Medicare Advantage plans even include cool benefits like gym memberships!

Flexibility: There is a broad range of Medicare Advantage plans out there, so you may be able to choose between a few options to get the one that’s right for you.

Why Some People Don’t Like Medicare Advantage Plans

Limited Networks: There is usually no nationwide coverage with Medicare Advantage plans. This can be an issue if you frequently travel within the US. Additionally, your network may require that you only see specialists that your doctor refers you to.

Price Fluctuation: The specifics of your Medicare Advantage plan varies per provider. You may still be required to pay copays and coinsurance fees. Additionally, your Medicare premiums and copayments may change each year.

Medicare Doctor
Medicare Doctor

Medicare Advantage vs. Medigap

When comparing Medicare Advantage vs Medigap, it’s easy to get confused. Medigap can only be purchased alongside Original Medicare. You cannot have a Medicare Advantage and Medigap plan at the same time. Medigap plans cost an additional monthly Medicare premium, but they help fill the cost gaps in coverage – this means less out of pocket costs for you.

Medicare Advantage vs Medigap prices can vary. If this is something you’re interested in, it’s important to compare policies.

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Difference Between Medicare and Medicare Advantage

What is the difference between Medicare and Medicare Advantage? It is easy to confuse the two. The main difference is that while Original Medicare is the federal program, Medicare Advantage plans are privately owned. Medicare Advantage plans still have to follow all the rules determined by CMS (Centers for Medicare and Medicaid Services), but they are able to offer benefits that the federal program cannot. med

How to get Medicare Advantage

Does a Medicare Advantage plan look attractive to you? Did we grab your attention? AEP is coming soon!

From October 15 to December 7, anyone with Medicare can make changes to their plans. If you’re interested in purchasing a Medicare Advantage plan or hearing more about how to get covered, complete this form or call us at 833-438-3676 to arrange a free, no-obligation appointment with an agent and get covered today.

*This blog was originally published on September 20, 2018, and updated on July 28, 2019.