Medicare Advantage vs. Medicare

Original Medicare is run by the federal government and is overseen by the U.S. Centers for Medicare & Medicaid Services (CMS). Medicare Advantage is an alternative to Original Medicare. These plans are sold through private insurers who contract with CMS to provide coverage.

Who provides coverage is the biggest difference between the two, but there are several more that you should consider before deciding which option is right for you.

You should compare the pros and cons for both Medicare and Medicare Advantage plans carefully to see how they stack up for your particular health care coverage needs.

Most doctors and hospitals in the United States accept Original Medicare. The federal government also limits how much health care providers can charge people on Medicare whether the doctors or hospitals participate in Medicare or not.

All Medicare Advantage plans must cover the same things Original Medicare covers. But Medicare Advantage plans may also cover other benefits such as hearing, vision, dental and prescription drug coverage.

Your lifestyle, finances and general health play major roles in whether a Medicare Advantage plan or Original Medicare is a better fit for you.

You should consider these qualities before making a choice on the type of coverage you choose.

Typically, Medicare Advantage plans make the most sense for people with limited financial resources but who are in good health.

Medicare Advantage plans tend to have lower premiums than Original Medicare. But they require you to spend more out-of-pocket for services they cover.

Medicare Advantage plans may not be a good fit for you if you have chronic or serious health conditions because they can require expensive copays.

Even if you’re healthy now, you should consider your risk for health issues that may require frequent doctor visits and hospitalization in the future. These costs could be much higher under a Medicare Advantage plan.

Since Medicare Advantage plans have provider networks that limit which doctors and other providers you can see, they are not a good choice if you want the option of choosing your own doctor — or if you travel or live part of the year in another part of the country.

It can also be difficult — and expensive — to switch from a Medicare Advantage plan to Original Medicare with Medigap coverage if you later decide that’s a better option for you.

Original Medicare is a better choice if you have serious health conditions or expect them in the future. While monthly premiums may be higher, the coinsurance and other out-of-pocket costs associated with doctor visits and other health care services may be less expensive in the long run.

In addition, you can modify your Original Medicare coverage to help offset your out-of-pocket costs through a Medigap policy and a Medicare Part D prescription drug plan. These offer you combinations of coverage that can further reduce your costs in the long run.

Medicare Supplemental insurance — better known as Medigap — plans are standardized policies you purchase through private insurers.

To buy a Medigap plan, you first must enroll in both Medicare Part A and Part B. Medigap works with Original Medicare to help you pay out-of-pocket costs that Medicare does not cover, such as copays and coinsurance.

A Medigap plan can reduce your out-of-pocket costs, but it won’t pay for all of them.

Medigap does not cover your Plan A deductible. If you were not eligible for Medicare until Jan. 1, 2020 or later, Medigap plans will no longer cover your part B deductible.

It also won’t pay for anything that Medicare Part A and Part B does not cover — such as vision, dental or hearing services.

You can’t add a Medigap policy to a Medicare Advantage plan. You must have Original Medicare.

You can add a Medicare Part D prescription drug plan to Original Medicare to help cover the cost of prescription drugs you take at home.

Medicare Part D plans are sold by private insurers. They may require you to use a pharmacy in the plan’s network.

You should also check with the plan administrator and your doctor to make sure that any specific medications you take — especially brand name drugs — are covered, and if not, then a different drug that will work for your condition.

Medicare Advantage plans have become a growing share of coverage for retirees since it first appeared in 1995 since they provide popular options missing from Original Medicare.

Medicare Advantage plans create their own networks of doctors and hospitals who agree to set prices. This can limit your choice of doctors or hospitals that you have under Original Medicare. But Medicare Advantage provides a wider array of options for people willing to pay for them.

Part C plans may not be right for everyone. A government review suggested that Medicare Advantage plans appear to be a better fit for healthier patients.

“We found some [Medicare Advantage] contracts in which people in poor health were much more likely than others to voluntarily leave the contracts’ health plans,” authors of a 2017 Government Accountability Office Report to Congressional Requesters wrote.

The GAO found these plans often had lower quality scores and enrollees cited problems with getting access to health care through the plans.

Looking carefully at a Medicare Advantage plan or working closely with with a licensed professional insurer to make sure you are getting the kind of coverage you want can help you select the plan that’s best for your particular situation.

You can join, switch or drop Medicare or Medicare Advantage plans, but you can only do it at certain times and under certain conditions.

You are limited to joining, dropping or switching Medicare plans to certain times — called enrollment periods.

You can also change plans under special circumstances — called special enrollment periods. Circumstances include moving to a new area where your Medicare Advantage plan doesn’t serve you or the company goes out of business.

To switch from Original Medicare to a Medicare Advantage plan, you will need to make the move during the annual open enrollment period or during a special enrollment period.