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Key takeaways
Original Medicare is a federal health insurance program for people 65 and older or those with specific conditions, offering inpatient and outpatient coverage but requiring premiums, deductibles, and coinsurance, with no out-of-pocket maximum unless paired with Medigap.
Medicare Advantage plans, offered by private companies, combine Parts A, B, and D, potentially include additional benefits like dental and vision, but may limit provider access and require preauthorization for certain services.
The choice between Original Medicare and Medicare Advantage depends on individual healthcare needs, financial situation, and preferences regarding provider flexibility, coverage for additional benefits, and out-of-pocket cost limits.
While Original Medicare offers nationwide provider access without prior authorization, Medicare Advantage plans may offer lower premiums, an out-of-pocket maximum, and extra services but could restrict provider choice and require preauthorization.
Medicare is one of the many things people can look forward to as they get older. With discounted medical insurance from the government, who wouldn’t be interested? If you’re 65 or older or meet one of the other criteria for eligibility and are preparing to enroll in Medicare, you’ll soon realize it isn’t as straightforward as you’d imagine. Original Medicare isn’t your only option; you can also choose from various Medicare Advantage plans.
What is Original Medicare vs. Medicare Advantage?
We went to the experts to better understand the difference between Original Medicare and Medicare Advantage plans.
“Since 1965, Medicare has been a federal health insurance program for persons 65 and older, no matter their medical condition or level of income,” explained Michelle Robbins, a licensed insurance agent in Corona, California, at U.S. Insurance Agents. “There are also people who are under the age of 65, with specific health conditions and diseases, who may also enroll in original Medicare.”
Original Medicare is offered by the federal government, and is broken into parts, mainly Part A and Part B. Medicare Part A, generally speaking, is inpatient coverage that covers your hospital stays and many of the costs associated with your time there. Medicare Part B covers outpatient services like doctor’s visits, some medical equipment, and ambulance services. There are also privately administered Medicare Part D plans that cover prescription drugs.
Despite being a government-subsidized insurance plan, there are still costs associated with Original Medicare. You’ll need to pay premiums for each part of Medicare, and there are also deductibles and coinsurance.
With Original Medicare, you’ll be covered to see any healthcare provider nationwide that accepts Medicare. People with limited income and resources may also have access to Extra Help, a program to help low-income individuals using Medicare with some Part D costs. Another option to help reduce costs is Medicare Supplement Insurance, or Medigaps, which can be used in addition to Medicare to cover the out-of-pocket costs, like co-pays and coinsurances, that Medicare does not cover.
Robbins went on to explain Medicare Advantage plans, “Part C, also known as Medicare Advantage (MA), became another option for Medicare healthcare, beginning in 1997. It’s an alternative to Original Medicare, which allows patients to choose health plans with at least the same service coverage as Original Medicare, including a few extra benefits such as dental, vision, hearing, and Part D prescription drugs.”
Medicare Advantage plans, sometimes called Medicare Part C plans, are offered by private insurance companies and can be advantageous for some individuals. These plans typically combine Parts A, B, and D into a single private plan. Medicare Advantage plans are most commonly provided through health maintenance organizations (HMO) or preferred provider organization (PPO) plans; you can pick coverage from various insurance companies, some of which have $0 premium plans.
However, it’s important to note that you may need preauthorization before visiting certain healthcare professionals with Medicare Advantage Plans. You may only be able to see doctors in the plan’s network, usually limited to your area. Otherwise, you may only get partial insurance coverage on your visit or none at all.
How to choose between Original Medicare and Medicare Advantage
After researching the types of Medicare, the next big question many people face is how to choose between Original Medicare and Medicare Advantage. This is a personal choice because you’ll need to evaluate the Medicare Advantage plans available to you and see how they compare to Original Medicare for your specific healthcare needs. You’ll want to consider any health conditions you have, which doctors you can visit, and your financial situation.
To learn more, we went to the experts to see what general advice they could give.
Consider Original Medicare if:
“If you prefer budget predictability and the freedom to choose who and where you will receive your healthcare services, closer consideration of Original Medicare might be in your best interest,” explained Robbins.
Other considerations for choosing Original Medicare coverage include:
- You want provider flexibility without a referral
- You’re a frequent healthcare user or have disabilities
- You need cost-sharing programs like Medigap plans
- You don’t want to deal with prior approval for most medical services and equipment
- If you plan on moving or are traveling within the United States, you’ll still be covered
- You want peace of mind in the case of a significant medical emergency
Consider Medicare Advantage if:
“Conversely, if lower monthly premiums and ancillary benefits like dental, vision, and hearing with Part D prescription benefits are most important in a healthcare plan, further examination of Medicare Advantage (MA) may be worth consideration,” said Robbins.
You may want to consider Medicare Advantage if:
- You want added benefits that Original Medicare doesn’t provide, like vision and dental care
- You want lower premiums as you don’t need to visit a healthcare provider frequently
- You don’t mind waiting for prior authorization for specialty visits or certain treatments
- You don’t often travel or plan on moving, so a smaller choice of network providers won’t be an issue
- You want an out-of-pocket maximum
Pros and cons of Medicare Advantages plans vs. Original Medicare
Only you can decide the best way in which to receive your Medicare benefit.
Simply put, those who frequently visit the doctor and have pre-existing health conditions requiring frequent treatment will likely want to choose Original Medicare.
The advantages of Original Medicare are that it has an extensive network of healthcare providers across the United States, and it covers a wide range of services that don’t typically need prior authorization. You can get additional coverage through Medigap plans (Medicare supplemental insurance) that help pay uncovered costs like co-pays and coinsurance.
The disadvantages of Original Medicare are that it does not cover vision, dental, or hearing services, there isn’t an out-of-pocket limit, and there are monthly premiums you’ll have to pay with Medicare Part B (unless you qualify for a Medicare Savings Program).
You may want to choose Medicare Advantage plans if you are a healthy individual and only visit your healthcare provider for routine check-ups or the occasional virus.
The advantages of Medicare Advantage plans include some zero premium plans, an out-of-pocket maximum to your healthcare spending, and occasionally additional services like dental benefits, vision benefits, or gym memberships may be covered.
The disadvantages of Medicare Advantage plans are that the network of providers is smaller, and some plans require pre-authorization for services.
If you’re interested in Original Medicare, learn more about eligibility for open enrollment and special enrollment periods here.