If you’re turning 65 this year or thinking of retiring soon, you might want to consider the differences between Original Medicare and Medicare Advantage plans. Original Medicare is a federal government-managed program that is managed by the Centers for Medicare & Medicaid Services (CMS). It is what’s known as a fee-for-service system, meaning each treatment is paid for separately.
Medicare Advantage plans, also known as Part C, are operated by private companies that contract directly with CMS. Like Original Medicare, these plans provide coverage for hospitals, home care nursing, and hospice care facilities (Part A), as well as medical insurance for doctor visits and other health care providers (Part B).
But Medicare Advantage can hold many benefits over Original Medicare. Here are four reasons why choosing Medicare Advantage might be a better fit for you:
1. Medicare Advantage plans are simpler
If you choose Original Medicare for your coverage, you will need to sign up for individual prescription drug coverage (Part D). This will allow you to obtain care from any provider that accepts Medicare, but you will also have to review claims for each service you receive. You may also select a Medigap policy for supplemental coverage but you will have to sign up for this individually too.
Medicare Advantage simplifies this process. It combines Parts A and B into a single plan and also often includes prescription drug coverage. Medicare Advantage plans are managed by a private insurance company and, if you choose a Medicare Advantage plan, it takes the place of Original Medicare. While beneficiaries can choose plans that have access to only in-network healthcare providers, certain types of Medicare Advantage plans also offer out-of-network benefits, giving you greater flexibility in the doctors you see to get care.
2. You can get more for your money
For most people who paid Medicare taxes throughout their working years, Part A is premium-free. However, there is a premium for Part B, which starts at $148.50 per month in 2021 and is calculated based on your monthly income. Regardless if you choose Original Medicare or Medicare Advantage for your coverage, you'll still have the Part B premium.
Medicare Advantage plans are an attractive option because they include all of the services covered by Medicare Parts A & B, and often provide even more benefits than Original Medicare. These additional benefits can include transportation to doctor appointments, vision and dental benefits, reimbursement for over-the-counter medications (e.g., aspirin) and gym memberships.
Another benefit of some Medicare Advantage plans is that they often include both medical and prescription drug coverage. Many of these Medicare Advantage Prescription Drug plans (MAPDs) have $0 premiums, which can amount to significant annual savings compared to Original Medicare with a Prescription Drug Plan purchased separately.
Those living with a chronic illness may also find plans with benefits specifically tailored to help them better manage their conditions. Such plans may include benefits like a dedicated Care Coordinator, lower out of pocket costs on medical supplies or a personal safety device.
Today, there are plenty of Medicare Advantage and MAPD plans that start with $0 premiums and, in some markets, there are even plans that pay all or a portion of your Part B premium. There are also Medicare Advantage plans offering further enhanced benefits for a monthly premium. All in all, today’s Medicare Advantage plans can provide amazing opportunities to save money and receive additional benefits when compared to Original Medicare.
3. Financial peace of mind
Although Medicare Advantage plans may look similar based on their premiums, there are often marked differences between their deductibles, co-payments, and co-insurance. Patients on Medicare Advantage plans know in advance what their copays will be for most services.
Medicare Advantage plans also have what's called a "Maximum-Out-of-Pocket" (MOOP) limit, which caps the total amount you would have to spend on covered services in any given year. This protection can provide peace of mind as you know there is a ceiling on your out-of-pocket medical expenses in a given year.
Original Medicare has no such limit. After meeting the annual deductible—$203 in 2021—Original Medicare beneficiaries must typically pay 20% of the Medicare-approved amount for most doctor services, including those while in the hospital as well as outpatient therapy and durable medical equipment. These costs could amount to a catastrophic financial hit for someone who experiences a significant health event such as an accident, hospitalization, or sudden illness.
4. Better care coordination
Doctors are increasingly taking a more holistic view of their patients’ health and root causes rather than just treating their symptoms. This more comprehensive approach includes focusing on things such as health literacy, diet, ease of access to care, and socioeconomic factors like income, housing, or access to healthy food.
Many Medicare Advantage plans are following this trend and coordinating care for members under the supervision of their primary care provider. This allows the doctor to offer more personalized care for an individual's medical needs, and can lead to improved care and reduced medical costs.
Companies are also utilizing health and behavioral data to deliver smarter coordinated care. For example, Clover Health offers doctors its free Clover Assistant technology platform to give them a more complete view of their patients’ needs by synthesizing each of their interactions with the healthcare system and surfacing actionable recommendations.
While Medicare Advantage offers additional benefits to Original Medicare, making such an important decision like choosing the best plan for your needs often requires some work because there are so many options. If you have recently become eligible for Medicare and would like assistance, we can help simplify the process and find the right coverage option and the right plan for you.
Individuals already on a Medicare Advantage plan who are looking to change their plan can do so either during the current Medicare Advantage Open Enrollment Period (OEP)—the period from January 1 to March 31st where current Medicare Advantage beneficiaries can change coverage options—or during the Annual Enrollment Period (OEP) from October 15 - December 7 each year.
Whether you’re newly eligible for Medicare or already have Medicare Parts A & B, SeekMedicare is here to offer neutral advice completely free and with no obligation to enroll. Our Medicare Match technology compares dozens of plans across markets and health care providers while taking your unique health needs and budget into consideration.
When you sign up for a plan through SeekMedicare, whenever you need help — whether for a specific question, a mid-year plan review, or during the annual enrollment period — we’ll be here to guide you every step of the way.