What is the difference between Medicare and Medicare Advantage?

What is the difference between Medicare and Medicare Advantage?

Original Medicare

Original Medicare has two parts:

Medicare Part A covers hospital care.

Medicare Part B covers doctors visits and medical supplies used outside of the hospital setting. It does not cover prescription drugs.

Medicare Advantage

Medicare Advantage plans are insurance plans run by private insurance companies under the supervision and regulation of the U.S. government. Medicare Advantage plans (also called "Part C" plans, or "MA" programs) actually provide Medicare Part A and Part B services, just like Original Medicare. In fact, you will continue to pay the same Part A and Part B premiums that you would if you chose Original Medicare.

However, Medicare Advantage plans may offer additional benefits such as vision, dental, and hearing care. (Some plans offer prescription drug coverage as well.)

In contrast to Original Medicare, Medicare Advantage plans are delivered through private health insurer HMOs and PPOs. In the case of HMOs, you are required to use doctors and specialists in the plan network. PPOs are similar, but they give more flexibility to use providers outside the network, at a higher cost to you.

Original Medicare vs. Medicare Advantage

The charts below highlight the main differences between Original Medicare and Medicare Advantage.

At a high level, Medicare Advantage plans may cost you less, and are much simpler to understand and manage than Original Medicare. The trade-off is that some people feel Medicare Advantage plans limit some of their choices about which doctors and specialists they can see. Medicare Advantage plans make a large effort to “control costs.” This can be a good thing when it is time for you to pay for monthly plan premium. But it can feel restrictive when you want to see a favorite doctor, or want to visit a specialist without prior authorization.

Original Medicare

Medicare Advantage

You must enroll in

Medicare Parts A & B

To sign up, you need to be enrolled in Medicare Part A and B, but then you will move to Medicare Advantage

How bills get paid

  • You go to any doctor that accepts Medicare.
  • You pay the bill.
  • You send the bill to Medicare, which reimburses you for 80% of the “Medicare-Approved Amount.”
  • Depending on where you live (in a high-cost area or low-cost), and how much your doctor charges, you may wind up paying more or less
  • You generally must see a doctor within the plan’s “network”
  • You pay a minimal amount (the co-pay) when you walk out of the doctor’s office
  • You do not need to file claims for reimbursement
  • In some cases (specialist visits) you may need to receive prior authorization before going to the doctor
  • Some plans allow you to see doctors outside their network, but you’ll wind up paying more as the co-pay

Prescription Drug Coverage

Optional. If you want it, you’ll need to buy a separate Prescription Drug Plan (PDP) from a private insurance company, and pay monthly premiums.

You can choose a Medicare Advantage plan that includes Prescription Drug coverage, or one that does not. There is no separate premium for drug coverage. (But typically, plans with drug coverage have higher premiums than plans without.)

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What is the difference between Medicare and Medicare Advantage?