Medicare vs. Medicare Advantage: The Differences Explained

Article at a glance
  • It’s essential for future and current Medicare beneficiaries to understand the basics of Original Medicare and Medicare Advantage plans in order to get the best healthcare coverage for their specific situations. 

  • Medicare Advantage and Original Medicare have many differences that must be considered.

  • Cost is a huge variable when it comes to considering health insurance. 

For current and future Medicare beneficiaries, getting the most comprehensive coverage means understanding all of their options. And when it comes to Medicare coverage specifically, there are many different aspects and plans to consider. 

The Federal Medicare Program consists of Original Medicare as well as Medicare supplemental insurance plans. One of these supplemental insurance policies is Medicare Advantage. Someone cannot enroll in both an Orignal Medicare plan and a Medicare Advantage plan. It is one or the other.

Original Medicare and Medicare Advantage plans differ in many ways, including their enrollment periods, what they cover, how much they cost, and more. Knowing the basics of Original Medicare vs. Medicare Advantage plans is crucial before learning the nuances of their differences and when to choose Original Medicare vs. Medicare Advantage and vice versa. 

Read on to discover the differences between these Medicare plans and the health insurance coverage they provide.

What Is Original Medicare?

Original Medicare is a health insurance plan provided by the federal government to those 65 years and older, younger people with disabilities, and those with End-Stage Renal Disease (ESRD). Traditional Medicare plans are broken into two Parts: Medicare Part A (hospital insurance) and Medicare Part B (medical insurance). 

Medicare Part A consists of medical care someone would receive during an inpatient stay while Medicare Part B coverage includes medical services that would be considered outpatient. 

Neither Medicare Part A nor Medicare Part B includes coverage for prescription drugs. This is known as Medicare Part D, which must be enrolled in separately if someone is enrolled in Original Medicare.

Part A Eligibility

Most Americans will be eligible for Part A coverage around the age of 65. There are two types of coverage for Part A. This includes premium-free coverage and paid coverage. Whether someone needs to pay for Part A coverage will depend on a few factors.

Premium-Free Coverage: Those 65 years and older who have worked and paid Medicare taxes for at least ten years are eligible for premium-free Part A coverage. Younger adults who were entitled to Social Security or Railroad Retirement Board disability for 24 months or are suffering from ESRD are also eligible for premium-free Part A coverage.

Paid Coverage: If someone or their spouse are 65 or older and are citizens of the United States but did not pay Medicare taxes while working, they may be able to purchase Part A coverage.

Part B Eligibility

All Medicare beneficiaries are eligible for Medicare Part B, but it does require a monthly premium. This Part B monthly premium is deducted from either a Social Security, Railroad Retirement, or Civil Service Retirement check. In cases where patients receive none of the payments listed above, Medicare will send a bill for the Part B premium every three months.

Note: To learn more about your eligibility and receive a premium claim, visit this source.

medicare enrollment periods timeline

Original Medicare Enrollment Periods

There are three enrollment options when it comes to a standard Medicare plan, and they are known as initial enrollment, general enrollment, and special enrollment.

Initial Enrollment Period (IEP)

The enrollment period for a standard Medicare plan lasts seven months: three months before your 65th birthday, the month you turn 65, and the three months after the month of your 65th birthday. If you are already claiming Social Security, Medicare enrollment should be automatic.

However, if you are not claiming Social Security, you may have to sign up for Medicare. It’s important to note that all patients must sign up for Part B if they want it. If a patient is interested in Part B coverage, it’s best to sign up for Part B during their initial enrollment period to avoid extra penalty fees. 

Note: To sign up for a Medicare insurance plan or learn more about enrollment, visit this source.

General Enrollment Period (GEP)

If a patient misses their initial enrollment period, Medicare also offers patients a general enrollment period from January 1st to March 31st. Coverage for this enrollment period begins on July 1st.

Note: To learn more about enrollment periods, including information on special enrollment, visit this source.

A graphic showing the seven-month timeframe for an individuals initial enrollment period: three months before their birth month, the duration of their birth month, and the three months after their birth month.

What Is Medicare Advantage?

Medicare Advantage is another way to get Medicare Part A and Part B coverage. Essentially, Medicare Advantage plans, also known as MA plans or Medicare Part C, bundle both of these Medicare Parts into one comprehensive health plan. Many MA plans also include prescription drug coverage within their policies as well. 

MA plans are offered through private insurance companies that the federal government partially funds.

Medicare Advantage Eligibility

Those who are eligible or are already receiving coverage through Original Medicare are also available to enroll in a Medicare Advantage plan. 

Medicare Advantage Enrollment Periods

Enrollment periods for Medicare Advantage plans are similar to those for Original Medicare. The MA enrollment periods include initial enrollment, general enrollment, and fall open enrollment.

  • Initial Enrollment Period: When a patient’s IEP is enacted for Original Medicare, they can also sign up for Medicare Part C.

  • General Enrollment Period: General enrollment for Original Medicare is January 1st — March 31st; meanwhile, general enrollment for MA is April 1st — June 31st. The general enrollment period should be used to register new patients for Medicare plans.

  • Fall Open Enrollment Period: From October 15th through December 7th, patients have the option to change their Medicare coverage plan. During this time, they can switch to a different MA plan (HMO, PPO, SNP, etc.) or switch from Original Medicare to an MA plan. The fall enrollment period should only be used to make changes to Medicare plans.

Medicare Benefits vs. Medicare Advantage Benefits

When it comes to benefits and coverage, Original Medicare and Medicare Advantage provide different options. Again, Medicare as a whole is broken down into three main parts: Part A (hospital coverage), Part B (medical coverage), and Part D (prescription drug coverage). 

What Does Medicare Cover?

Original Medicare provides coverage through Parts A and B with an option to add Part D as a separate plan. Enrollment is not automatic. Original Medicare also does not provide coverage for routine dental care, hearing, or vision.

What Does Medicare Advantage Cover?

Many Medicare Advantage plans provide Part A, Part B, and Part D coverage in addition to other benefits such as coverage for dental, vision, and hearing.

When patients select a Medicare Advantage plan, they must also decide on a plan type. Plan types include Health Maintenance Organization plans (HMO), Preferred Provider Organization plans (PPO), Special Needs Plans (SNP), and more. Each type of Medicare Advantage plan has different requirements and provides unique coverage options. To learn more about Medicare Advantage plan types, visit this source.

Note: To learn more about Medicare as a whole, visit this source.

Understanding The Additional Benefits Of A Medicare Advantage Plan

It’s common for Medicare Advantage plans to include additional benefits such as dental, hearing, and vision coverage. At times, MA plans may provide benefits such as reduced gym memberships and transportation assistance as well. To learn more about the additional benefits included in your insurance plan, contact your insurance provider.

Original Medicare Costs vs. Medicare Advantage Costs

When it comes to cost, Original Medicare and Medicare Advantage plans differ because they are provided through different mediums. Original Medicare is provided and covered by the federal government; meanwhile, Medicare Advantage plans are issued by private insurance companies. 

When thinking about out-of-pocket costs, patients must consider monthly premiums, deductibles, copayments, and coinsurance rates.

Original Medicare Costs

With Original Medicare plans, there is no premium for Part A coverage if the patient is an American citizen that has worked and paid Medicare taxes for ten years. However, there are ways to purchase Part A coverage if these standards don’t apply, in which case the monthly premium can be anywhere from $259-$471 a month. When it comes to Part B, most patients pay a monthly premium that is estimated to be $148.50 or higher, depending on the patient’s income. If a patient qualifies for Medicaid, they may not be required to pay the Part B premium.

Note: To learn more about the cost of monthly premiums, deductibles, copayments, and coinsurance rates regarding Original Medicare, visit this source.

Medicare Advantage Costs

When it comes to Part A and Part B, Medicare Advantage has its patients covered; not to mention, many Medicare Advantage plans include Part D coverage and additional benefits. Medicare Advantage premiums range from $0 to undefined amounts, depending on the type of plan a patient chooses and the company their plan is provided through. If struggling to understand the costs associated with your Medicare Advantage plan, it’s essential to speak with your insurance provider.

Note: Oak Street Health has providers available to discuss insurance benefits with their patients.

Prescription Drug Coverage

When it comes to Original Medicare coverage for prescription drugs, a separate prescription drug plan must be purchased. This prescription drug plan is known as Medicare Part D. Enrollment is not automatic. 

Note: Learn more about enrolling in Medicare Part D at this resource.

Most Medicare Advantage plans include Medicare Part D coverage. Many Medicare Advantage plans also include additional benefits such as dental care, vision, and hearing coverage.

Healthcare Provider Coverage

With Original Medicare, patients can visit any provider in the United States that accepts Medicare insurance. 

Medicare Advantage plans may have more requirements when it comes to healthcare providers because different plan types correspond to specific networks. The two most popular Medicare Advantage plan types are HMO and PPO plans. HMO plans require their clients to have an appointed primary care provider (PCP) and that other medical services are handled in-network. PPO plans do not require clients to have a PCP or to remain in-network for care; however, receiving out-of-network care may be more expensive. To learn more about your provider network and what’s covered within your Medicare Advantage plan, contact an agent from your insurance company.

Understanding Medicare Supplement Insurance Plans

Medicare supplement insurance consists of Medicare plans that fill in the gaps of Original Medicare. If a patient has Original Medicare, then they can gain supplemental insurance through a Medigap plan or Medicaid if they’re eligible. 

A common Medicare supplement is Medigap, also known as MedSupp. This Medicare supplement plan includes an added monthly premium cost. If a patient is eligible for Medicaid, they can use it as supplemental insurance in tandem with their Medicare policy; this is known as a dual eligible” insurance program.

Note: Visit the Center for Medicare and Medicaid Services website to learn more about this program.

It’s important to know that patients cannot use supplemental coverage in addition to a Medicare Advantage plan. This is because MA plans are considered to be supplemental coverage plans themselves. Most Medicare Advantage plans cover the gaps of what Original Medicare offers, which is why it is frequently called Medicare Part C’. For example, Medicare Advantage plans provide prescription drug coverage while Original Medicare does not.

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