Original Medicare Versus Medicare Advantage
Welcome to Part 3 of our Medicare Series. In Part 1 we covered the parts of Medicare, when you qualify for it, and how you enroll. In Part 2, we covered the importance of reviewing your plan each year. In this issue, we will look at the differences between original Medicare and Medicare Advantage.
Whether you are signing up for Medicare for the first time, or are reviewing your plan during the open enrollment period, you will have the chance to choose either original Medicare or Medicare Advantage.
Original Medicare
As we mentioned in Part 1, Part A is generally for hospitals and Part B is generally for doctors. As long as you have worked for a required amount of time, Part A is free. The standard monthly premium for Part B is $174.70. (If your modified adjusted gross income is $103,000 for an individual or $206,000 for a couple, you may pay an Income Related Monthly Adjustment Amount. Most people, however, just pay the standard Part B premium each month.). After your deductible is met, you generally pay 20% of your fees moving forward, and Medicare pays the rest. In addition, you must purchase a Part D plan to cover your medications.
Medicare Advantage
Medicare Advantage plans (Part C) are managed by private insurance companies. Plans include Part A and Part B and often include Part D, as well as dental and vision plans, or other benefits. (Benefits vary by plan, just like regular health insurance). There are a variety of Medicare Advantage plans, including HMOs, PPOs, Medical Savings Accounts, and more, and prices/specific offerings differ for each plan.
What are the Advantages and Disadvantages of Medicare Advantage?
Everything has its pros and cons, and Medicare Advantage is no different. The pros of Medicare Advantage are that it includes things (such as preventive care) that aren’t typically included in original Medicare, as well as having a cap on out-of-pocket costs, which original Medicare does not have. The cons are that you must see a provider in the plan’s network, unlike original Medicare, where you can see any physician who takes Medicare. With Medicare Advantage you may also require referrals to see specialists and for certain medications. Once you switch to Medicare Advantage, you have limited opportunities to switch back.
What to Consider When Choosing…
Things to consider when selecting between original Medicare and Medicare Advantage are:
- your current health status (those with chronic disease who need the services of specialists are better off with original Medicare),
- your financial status (Medicare Advantage has a cap on out-of-pocket costs, while with original Medicare a Medigap policy might be needed),
- whether you travel frequently (and thus might need out-of-network providers), and,
- who your preferred provider is (and whether they participate in a Medicare Advantage plan).
Medicare Advantage has become popular because it offers broader coverage, including wellness services, however, it limits who you can see, and whether you can self-refer to specialists. So consider your specific situation, and choose wisely!
Stay tuned for Part 4, where we look at Medicare Supplement Insurance – aka Medigap!
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The information provided herein does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available here are for general informational purposes only.