Original Medicare vs. Medicare Advantage

Original Medicare is health insurance provided through the federal government. Medicare Advantage, or Part C, plans are sold through private insurers that contract with Medicare. These plans must cover everything that Original Medicare covers, but may offer additional benefits such as vision and dental.

Main Differences of Medicare and Medicare Advantage

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.

Biggest Differences Between Original Medicare and Medicare Advantage
Costs
  • Original Medicare: You’ll pay a premium for Medicare Part B and be responsible for a deductible and coinsurance.
  • Medicare Advantage: You’ll pay an additional premium on top of your Part B premium, but other cost sharing varies based on your plan.
Choice of Providers
  • Original Medicare: You can go to any doctor or facility that accepts Medicare.
  • Medicare Advantage: Usually requires you to use doctors and hospitals in the insurer’s network.
Supplemental Insurance
  • Original Medicare: You can pay an extra premium for supplemental insurance, or Medigap, that covers some out-of-pocket costs.
  • Medicare Advantage: You are not allowed to buy Medigap if you have a Medicare Advantage plan.
Out-of-Pocket Expenses
  • Original Medicare: There is no limit on how much you have to pay out of pocket.
  • Medicare Advantage: Plans have an annual limit for which you have to pay out-of-pocket costs.
Prescription Drug Coverage
  • Original Medicare: You must enroll in a Medicare Part D prescription drug plan for drug coverage.
  • Medicare Advantage: Most plans include drug coverage, but you have a higher premium.
Referrals to Specialists
  • Original Medicare: You do not need a referral to see a specialist.
  • Medicare Advantage: Most plans require you to get a referral from your primary care doctor to see a specialist.
Services Covered
  • Original Medicare: Covers only medical and hospital costs.
  • Medicare Advantage: Plans may cover prescription drugs, hearing, vision and dental as well as hospital and medical services.
Travel
  • Original Medicare: Generally only covers you during travel in the United States.
  • Medicare Advantage: Plans may cover emergency care in foreign countries but sets a lifetime limit.

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.

Is Medicare Advantage or Original Medicare Right for You?

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

Medicare Advantage vs. Original Medicare
In 2019, there were 22 million Americans, or 34 percent of all Medicare beneficiaries, enrolled in Medicare Advantage plans. The Congressional Budget Office estimates that will climb to 47 percent by 2029.

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.

Reasons People Gave for Dropping Their Medicare Advantage Plan
  • Preferred doctors or hospitals not in the plan’s network
  • Problems with costs
  • Difficulty getting needed care
  • Problems getting information on drugs
  • Issues with drug coverage

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.

Medigap: An Alternative to Medicare Advantage

Medigap, may be a better option than Medicare Advantage for some people. Medigap is Medicare Supplement Insurance that helps fill gaps in your Original Medicare coverage.

You can’t use it to pay your deductibles if you purchased your Medigap plan after Jan. 1, 2020, but Medigap can help cover out-of-pocket costs such as copayments and coinsurance for Medicare-approved health care and medical supplies.

Some Medigap policies may cover things Original Medicare does not such as health care you need while traveling outside the United States.

You cannot enroll in both Medicare Advantage and Medigap. In most states, you are not guaranteed access to a Medigap plan if you decide to drop your Medicare Advantage plan.

But at least eight states allow a relatively clean switch between the two plans if you meet certain rules.

States That Allow Switching Between Medigap and Medicare Advantage
  • California
  • Connecticut
  • Maine
  • Massachusetts
  • Missouri
  • New York
  • Oregon
  • Washington

The rules vary from state to state. You can check visit Medicare’s contacts page for options in your state.

Last Modified: July 22, 2020

6 Cited Research Articles

  1. U.S. Centers for Medicare & Medicaid Services. (2019, September 24). Trump Administration Drives Down Medicare Advantage and Part D Premiums for Seniors. Retrieved from https://www.cms.gov/newsroom/press-releases/trump-administration-drives-down-medicare-advantage-and-part-d-premiums-seniors
  2. Jacobson, G., Freed, M. Damico, A., and Neuman, T. (2019, June 6). A Dozen Facts About Medicare Advantage in 2019. Retrieved from https://www.kff.org/medicare/issue-brief/a-dozen-facts-about-medicare-advantage-in-2019/
  3. Liaise, E. (2018, May 23). Medicare vs. Medicare Advantage: Ill Health Often Leads to Plan Switch. Retrieved from https://www.kiplinger.com/article/retirement/t039-c000-s004-medicare-vs-medicare-advantage-ill-health-switch.html
  4. Graham, J. (2017, October 19). Medicare vs. Medicare Advantage: How to Choose. Retrieved from https://khn.org/news/medicare-vs-medicare-advantage-how-to-choose/
  5. U.S. Government Accountability Office. (2017, April). Medicare Advantage; CMS Should Use Data on Disenrollment and Beneficiary Health Status to Strengthen Oversight. Retrieved from https://www.gao.gov/assets/690/684386.pdf
  6. Blue Cross Blue Shield Blue Care Network of Michigan. (2019, October 8). What’s the Difference Between Original Medicare and Medicare Advantage? Retrieved from https://www.bcbsm.com/medicare/help/faqs/works/difference-original-medicare-advantage.html