What is the Big Difference Between Original Medicare and Medicare Advantage?

Medicare provides healthcare coverage for millions of older and disabled Americans every year. However, there is some confusion around the differences between Original Medicare and Medicare Advantage Plans. While Medicare is administered directly by the federal government, Medicare Advantage is an alternative option run by private insurers under contract with Medicare. This article will explore the key distinctions between these two approaches to receiving Medicare benefits. Understanding how Original Medicare coverage works compared to Medicare Advantage Plans is essential for making an informed choice about coverage. The article explains their varying structures and what that means for costs, coverage and provider choice.

What are Original Medicare and Medicare Advantage?

Medicare is the federal health insurance program for people who are 65 or older, disabled, or have certain chronic conditions. It consists of four parts:

·        Part A covers inpatient hospital care, skilled nursing facility care, hospice care, and some home health care.

·        Part B covers outpatient medical services, such as doctor visits, lab tests, preventive care, and durable medical equipment.

·        Part C, also known as Medicare Advantage, is an alternative way to get your Part A and Part B benefits through a private health plan that contracts with Medicare.

·        Part D covers prescription drugs through a private plan that works with Medicare.

To enroll in Medicare, you must be a U.S. citizen or a legal resident who has lived in the U.S. for at least five years. You can enroll in Part A and Part B when you turn 65, or earlier if you have a disability or a qualifying condition. You can enroll in Part C and Part D during certain enrollment periods each year.

Medicare Advantage is a type of health insurance plan that is offered by private insurance companies that contract with Medicare. It provides all the benefits of Original Medicare (Part A and Part B), as well as additional benefits that Original Medicare does not cover, such as prescription drug coverage (Part D), dental, vision, hearing, and wellness programs. Some plans may also include extra perks, such as gym memberships, transportation, or over-the-counter items.

Medicare Advantage Plans are available in different types, such as Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), Private Fee-for-Service (PFFS), Special Needs Plan (SNP), or Medical Savings Account (MSA). Each type of plan has different rules and costs, depending on the network of providers, the level of coverage, and the services offered.

To enroll in a Medicare Advantage Plan, you must be eligible for Medicare and live in the service area of the plan. You must also continue to pay your Medicare Part B premium, which is $148.50 per month in 2021, plus any additional premium that the plan may charge. You can join or switch between Medicare Advantage Plans during the annual Medicare open enrollment period, which runs from October 15 to December 7 each year.

How do Medicare and Medicare Advantage compare to each other?

Medicare and Medicare Advantage differ from each other in several ways:

·        Network: A Medicare Advantage Plan has a network of doctors and hospitals that are contracted with the plan. You may have to pay more or get less coverage if you go out-of-network, unless it is an emergency. Original Medicare does not have a network; you can see any doctor or hospital that accepts Medicare.

·        Referrals: A Medicare Advantage Plan may require you to get a referral from your primary care provider (PCP) to see a specialist or get certain services. Original Medicare does not require referrals; you can see any specialist or get any service that is approved by Medicare.

·        Prior authorization: A Medicare Advantage Plan may require you to get prior authorization from the plan before getting certain tests, procedures, or treatments. This means that the plan has to approve the service before it will pay for it. Original Medicare does not require prior authorization; you can get any service that is approved by Medicare without needing approval from anyone.

·        Out-of-pocket costs: A Medicare Advantage Plan has a limit on how much you have to pay out-of-pocket each year for your health care services. This limit varies by plan, but it cannot be more than $7,550 in 2021. Once you reach this limit, the plan pays 100% of your covered costs for the rest of the year. Original Medicare does not have an out-of-pocket limit; you have to pay 20% of the cost of most services after you meet your deductible, which is $203 for Part B in 2021. You can buy a supplemental insurance policy (Medigap) to help cover some of these costs, but it will cost you an extra premium.

·        Prescription drug coverage: A Medicare Advantage Plan usually includes prescription drug coverage as part of the plan. You do not need to buy a separate Part D Plan to get this benefit. Original Medicare does not include prescription drug coverage; you have to buy a separate Part D Plan if you want this benefit.

What are the pros and cons of Traditional Medicare and Medicare Advantage?

Medicare and Medicare Advantage have some advantages and disadvantages that you should consider before enrolling in one. Here are some of the pros and cons of each option:

Pros of Original Medicare

·        You have more choice and flexibility than Medicare Advantage, as you can see any doctor or hospital that accepts Medicare

·        You do not need to get referrals or prior authorization for any service that is approved by Medicare

·        You can buy a Medigap Plan to help cover some of the out-of-pocket costs that Original Medicare does not cover

·        You can buy a Part D Plan to get prescription drug coverage that suits your needs and budget

Cons of Traditional Medicare

·        You have less benefits than Medicare Advantage, as Original Medicare does not cover prescription drugs, dental, vision, hearing, and wellness programs

·        You have to pay more out-of-pocket costs than Medicare Advantage, as Original Medicare does not have an out-of-pocket limit and you have to pay 20% of the cost of most services

·        You have to pay extra premiums for Medigap and Part D Plans, which can add up to a significant amount

·        You have to deal with multiple plans and providers, which can be confusing and complicated

Pros of Medicare Advantage

·        You get more benefits than Original Medicare, such as prescription drug coverage, dental, vision, hearing, and wellness programs

·        You pay less out-of-pocket costs than Original Medicare, as long as you stay in-network and follow the plan's rules

·        You have a limit on how much you have to pay out-of-pocket each year, which protects you from high medical bills

·        You may get extra perks, such as gym memberships, transportation, or over-the-counter items

Cons of Medicare Advantage

·        You have less choice and flexibility than Original Medicare, as you have to use the plan's network of providers and get referrals and prior authorization for some services

·        You may have to pay more or get less coverage if you go out-of-network, unless it is an emergency

·        You may have to deal with more paperwork and bureaucracy than Original Medicare, as you have to follow the plan's rules and procedures

·        You may have to switch plans or providers if your plan changes its network, benefits, or costs from year to year

How to change Medicare Plan if you are not satisfied with your current one?

If you are not satisfied with your current Medicare Plan, whether it is Original Medicare or Medicare Advantage, you can change your plan during certain enrollment periods each year. Here are some of the options and deadlines for changing your plan:

·        If you want to switch from Original Medicare to a Medicare Advantage Plan, or vice versa, you can do so during the annual open enrollment period, which runs from October 15 to December 7 each year. Your new plan will start on January 1 of the following year.

·        If you want to switch from one Medicare Advantage Plan to another, or from one Part D Plan to another, you can also do so during the annual open enrollment period.

·        If you want to switch from a Medicare Advantage Plan back to Original Medicare, you can also do so during the Medicare Advantage open enrollment period, which runs from January 1 to March 31 each year. Your new plan will start on the first day of the following month. If you switch back to Original Medicare during this period, you can also join a Part D Plan at the same time.

Medicare Supplement Plan or Medigap

If you want to switch from a Medigap Plan to another Medigap Plan, or drop your Medigap Plan altogether, you can do so at any time during the year. However, you may have to go through medical underwriting and pay higher premiums or be denied coverage if you switch or drop your Medigap Plan after your initial enrollment period. Your initial enrollment period is the six-month period that begins when you are 65 or older and enrolled in Part B.

Before you change your plan, make sure you compare the benefits, costs, and networks of different plans include Part A or b available in your area. You can use the [Medicare Plan Finder tool] on the official Medicare website to do this. You should also check if your preferred doctors, hospitals, pharmacies, and medications are covered by your new plan. You should also read the plan's summary of benefits and evidence of coverage documents carefully. These documents explain what the plan covers, what it does not cover, what you have to pay, and what your rights and responsibilities are.

Conclusion

Medicare and Medicare Advantage are two different ways to get your Medicare benefits, but they also have some important differences that you should know before enrolling in one. Original Medicare gives you more choice and flexibility, but it also has less benefits and higher costs than Medicare Advantage. Medicare Advantage gives you more benefits and lower costs than Original Medicare, but it also has less choice and flexibility. You should weigh the pros and cons of each option carefully before enrolling in one. You should also compare different plans and providers to find the best fit.

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FAQS

What is the difference between Traditional Medicare and Medicare Advantage?

Traditional Medicare (Parts A and B) is managed by the federal government, while Medicare Advantage is provided through private insurance companies approved by Medicare. Medicare Advantage must cover all the benefits of Parts A and B, but often adds extras and has networks. Traditional Medicare has no networks but requires additional supplemental coverage.

What is a Medicare Supplement Plan (Medigap)?

Medigap is private insurance that supplements Traditional Medicare. It helps cover costs like copays, coinsurance and deductibles that are not covered under Parts A and B. Beneficiaries who want the complete freedom of choice that Traditional Medicare offers often choose it along with a Medigap Plan.

What are my Medigap Plan options?

There are 10 standardized Medigap Plans labeled A through N that provide different combinations of benefits. Plans A-J are still available for purchase. After enrolling in Medicare Part B, you can sign up for a Medigap Plan anytime during your open enrollment period that lasts 6 months from your 65th birthday.

What are the differences between HMO, PPO and other Medicare Advantage Plans?

The primary types of Medicare Advantage Plans are HMOs, PPOs, PFFS and SNPs. HMOs have networks but no referrals, PPOs allow some out-of-network usage for a higher cost, while PFFS and SNPs cater to specific needs. Their structures offer varying levels of provider choice and out-of-pocket costs.

How do I choose between Medicare Advantage and Traditional Medicare?

It depends on your individual situation - things like your current and expected future healthcare needs, preferences on provider flexibility, and importance of supplemental benefits. Use Medicare.gov or consult a counselor to review details on costs, coverage and specific plan rules to determine the better option considering your situation.

What is the best Medicare Plan for me?

There's no single "best" plan as it varies based on individual factors. Consider things like your budget, health issues, regular providers and prescription drugs. Compare coverage details of Medicare Advantage Plans to Traditional Medicare plus a Medigap policy in your area. Speaking to a local SHIP counselor can help weigh the differences based on your specific needs to find the most suitable option.

How do I switch from one Medicare Plan to another?

During Open Enrollment periods from October 15-December 7 each year, you can generally switch between Medicare Advantage Plans or change from Medicare Advantage back to Original Medicare and join a Medigap/Part D Plan. Outside this period, your options may be limited and involve paying penalties for late enrollment. Counselors can advise the best timing for your situation.

What does Medicare not cover?

Some key things not covered include long-term care, dental care, cosmetic surgery, hearing aids, and most dental and vision care. Medicare Advantage Plans sometimes offer extras that help fill these coverage gaps. Part D prescription drug plans also have limitations. Understanding both what Medicare does and does not pay for is important for anticipating healthcare costs.

What is the difference between Medigap Plans and Medicare Advantage Plans?

Medigap covers costs that are left after Original Medicare pays its portion, providing more flexibility to see any provider.