Does Medicare Advantage Cost Less Than Traditional Medicare?

September 30, 2024•3 min read

When considering health insurance options, many people ask, "Does Medicare Advantage cost less than traditional Medicare?" At Bourgeois Insurance Agency, LLC, located in Thibodaux, Louisiana, we are committed to helping you understand your Medicare options and make informed decisions.

Understanding Medicare Advantage Plans

Medicare Advantage Plans, also known as Medicare Part C, are offered by private insurance companies approved by the Centers for Medicare and Medicaid Services. These plans include all the benefits of Part A and Part B, and often offer additional benefits like prescription drug coverage, dental, vision, and hearing.

Medicare Advantage Plans are required to cover all services that Original Medicare covers.
They may also offer extra benefits not covered by Original Medicare.
Most Medicare Advantage Plans include prescription drug coverage.

Comparing Medicare and Medicare Advantage

When comparing Medicare and Medicare Advantage, it is important to consider the different components and costs involved. Original Medicare consists of Part A (hospital insurance) and Part B (medical insurance). You can also add a Medicare Part D plan for prescription drug coverage and a Medigap Plan for additional coverage.

Medicare Advantage Plans, on the other hand, bundle these services together, often including prescription drug coverage and additional benefits.

Original Medicare: What You Need to Know

Original Medicare includes Part A and Part B. Part A covers hospital stays, skilled nursing facility care, hospice care, and some home health care. Part B covers certain doctors' services, outpatient care, medical supplies, and preventive services.

Medicare beneficiaries with Original Medicare can also opt for Medicare Part D to cover prescription drugs, and Medigap Plans to help with out-of-pocket costs such as deductibles, copayments, and coinsurance.

Traditional Medicare: Costs and Coverage

Traditional Medicare includes the costs of Part A and Part B. While Part A is usually premium-free for most beneficiaries, Part B requires a monthly premium. Additionally, beneficiaries may have out-of-pocket costs such as deductibles, coinsurance, and copayments.

Part A: No premium for most beneficiaries; deductible and coinsurance apply.
Part B: Monthly premium, deductible, and 20% coinsurance for most services.

Medigap Plans can help cover these out-of-pocket costs, but they require an additional monthly premium.

Medigap: Supplementing Traditional Medicare

Medigap, also known as Medicare Supplement Insurance, helps cover costs that Original Medicare does not. These plans are sold by private insurance companies and can help pay for deductibles, copayments, and coinsurance.

There are different types of Medigap Plans, each offering different levels of coverage. It is important to choose the right plan based on your health needs and financial situation.

Traditional Medicare and Medicare Advantage: Key Differences

When deciding between traditional Medicare and a Medicare Advantage Plan, consider the following differences:

Medicare Advantage Plans often have lower out-of-pocket costs but may have network restrictions.
Original Medicare allows you to see any provider that accepts Medicare, but out-of-pocket costs can be higher without a Medigap Plan.
Medicare Advantage Plans may offer additional benefits such as dental, vision, and hearing coverage.

Costs in Traditional Medicare vs. Medicare Advantage Plans

Medicare Advantage Plans may cost less than traditional Medicare when considering the total out-of-pocket costs. While traditional Medicare requires separate premiums for Part B, Part D, and Medigap, Medicare Advantage Plans often include these services in one plan with a single premium.

Factors that can affect your costs include:

Monthly premiums
Deductibles
Copayments and coinsurance
Out-of-pocket maximums

Choosing Between Plans and Traditional Medicare

Choosing between Medicare Advantage Plans and traditional Medicare depends on your personal health needs, financial situation, and preferences. Consider the following when making your decision:

Your health status and the types of services you need
Your budget and ability to pay premiums and out-of-pocket costs
Your preference for network restrictions versus provider flexibility
Additional benefits offered by Medicare Advantage Plans