• Harry N. Stout

258- What is the Difference Between Original Medicare and Medicare Advantage?


Guest Contributor: Medicare Advantage Plans


When you become eligible for Medicare, you can choose from one of two main ways to get your Medicare coverage. You can opt for Original Medicare (Part A and Part B) or a Medicare Advantage plan (Part C). It is important to weigh the pros and cons of each, taking into consideration your preferences, needs, and budget.


What Should You Know

  1. Medicare beneficiaries can choose to get their health care coverage through Original Medicare or a Medicare Advantage plan, and it is important to explore options based on preferences, needs, and budget.

  2. Original Medicare allows you to see Medicare-approved providers anywhere in the United States, but depending on how much healthcare you need, costs can be unpredictable.

  3. Medicare Advantage plans offer more benefits and have a limit on out-of-pocket costs, but generally require use of in-network providers and referrals for specialists.

  4. Original Medicare is a government plan, while Medicare Advantage plans are managed by private insurance companies. In either case, you pay a Part B monthly premium.

What is the Difference Between Original Medicare and Medicare Advantage?

Primary differences between Original Medicare and Medicare Advantage are related to coverage, choice of providers, and costs. You are considered a Medicare beneficiary with the same rights and protections whether you choose Original Medicare or a Medicare Advantage plan. The government administers Original Medicare, and private insurance companies administer Medicare Advantage plans.


Original Medicare includes Part A (hospital insurance) and Part B (medical insurance). If you have Original Medicare, you can choose to purchase Part D (drug coverage) and/or supplemental coverage (Medigap) to help pay for deductibles and coinsurance related to Parts A and B.


A Medicare Advantage Plan bundles Parts A, B, and usually D together and offers other benefits that Original Medicare doesn’t. You cannot have, and do not need, Medigap insurance if you have a Medicare Advantage plan.


Original Medicare is a fee-for-service health plan. Most people get premium-free Part A, but if you access your benefits, you pay a deductible. There is always a monthly premium for Part B. If you access Part B benefits, after you pay your annual deductible, Medicare pays its share of the Medicare approved amount, and you pay your share of the costs in the form of coinsurance.


Medicare Advantage Plans may or may not have a monthly premium (you will still pay the Part B premium) and vary in their cost sharing requirements. For instance, if you are hospitalized or need to see your physician, you typically pay a copay of a set amount or percentage after you pay an annual deductible.


Costs can vary in either case, depending on which type of insurance you choose and how much healthcare you end up needing. Original Medicare Part A has a deductible of $1,484 for in-patient hospitalizations, and daily co-insurance charges that kick in after 60 days; Part B deductible for 2021 is set at $203. There are no out-of-pocket limits with Original Medicare. Medigap and Part D premiums also vary. Medicare Advantage Plans costs vary depending on which type of plan you choose.


Original Medicare allows you to utilize any doctor or hospital in the U.S. that accepts Medicare assignment (that is, accepts the Medicare-approved amount as full payment). Medicare Advantage Plans may require you to receive your healthcare services from providers (including a PCP), hospitals, and pharmacies that are in-network and in your service area. Some plans allow for out-of-network providers, but will cost more. Most likely you will need prior approval for services, supplies, and medications with Medicare Advantage Plans. Original Medicare does not generally require referrals.


To learn more about Medicare and find in-depth guides and resources to help you make educated health care decisions, visit Medicare Advantage Plans.


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