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Medicare Advantage vs. Original Medicare: Understanding Your Options

Should You Choose Medicare or Medicare Advantage?

When it comes to choosing between Original Medicare and Medicare Advantage many people are unsure which option is best. This is an important decision and changing from one to the other isn't simple. Let's break down the differences and key considerations.

Medicare, the federal healthcare program, started in 1965. Initially, you could enroll in Medicare Part A (hospital insurance) and Part B (medical insurance), and many people opted for supplemental insurance (Medigap) from private companies to cover additional costs. In 2006, Medicare Advantage (Part C) plans were introduced. These plans, offered by private insurance companies, cover everything that Original Medicare covers and often include additional benefits like dental, vision, and prescription drug coverage.

What Are the Main Differences Between Medicare and Medicare Advantage?

 Here's a summary of the main differences between the two coverages.

1. Primary Insurance Provider:

Original Medicare + Supplement: Medicare remains your primary insurance. You enroll in Part A and Part B and purchase a Medigap policy for secondary coverage. Additionally, you may need a separate Part D plan for prescription drugs.

Medicare Advantage: A private insurance company becomes your primary provider. You still need to be enrolled in Part A and Part B, but the Medicare Advantage plan handles your coverage, often including drug coverage.

2. Cost Structure:

Original Medicare + Supplement: Generally higher monthly premiums for Part B and the Medigap policy, but lower out-of-pocket costs. Medigap plans often cover many out-of-pocket expenses, reducing financial risk.

Medicare Advantage: Usually lower or no monthly premiums but higher out-of-pocket costs when you use healthcare services. These plans may have copays, coinsurance, and yearly maximums on out-of-pocket expenses.

3. Provider Networks:

Original Medicare + Supplement: You can visit any doctor or hospital that accepts Medicare, offering broad flexibility and choice.

Medicare Advantage: Typically operates within a network of providers. Out-of-network care can be more expensive or not covered at all, depending on the plan.

4. Benefits:

Original Medicare + Supplement: Coverage is straightforward and predictable. Medigap policies provide extensive coverage of out-of-pocket costs.

Medicare Advantage: Often includes additional benefits like dental, vision, hearing, and wellness programs, which are not covered by Original Medicare.

While every person's situation is unique, generally speaking Medicare Supplement (Medigap) enjoys predictable total costs, offers wider provider choice, and minimal out-of-pocket expenses. These benefits come at the expense of higher monthly premiums and a separate Part D (presecription drug) plan is needed.

Medicare Advantage offers lower or no premiums, additional benefits, and integrated drug coverage. However, you face potential higher out-of-pocket costs, limited to network providers, and variable copays and coinsurance.

How Do I Enroll in  Medicare or Medicare Advantage? Can I Switch from Medicare Advantage to Medicare?

At 65, during your initial enrollment period, you can choose either option without health underwriting. If after enrolling in Medicare Advantage you want to switch to traditional Medicare + Medigap coverage you will be required to go through underwriting, meaning your health status could affect eligibility and cost.

Medicare Advantage plans can be changed annually during the Open Enrollment Period. 

Each choice depends on personal preferences, healthcare needs, and financial situation. For those who prefer predictable costs and extensive provider flexibility, a Medigap plan may be ideal. Those looking for lower premiums and extra benefits might lean towards Medicare Advantage.

Deciding between Medicare Advantage and Original Medicare with a Medigap policy is a personal decision. Understanding the differences in cost structure, provider access, and benefits is crucial. We work with independent health insurance experts who aren't compensated from the purchase of coverage to help our clients navigate this decision and  make an informed choice tailored to your needs.