Once U.S. citizens turn 65, they qualify for Medicare, choosing between Original Medicare (Parts A, B, and optional Part D) or a Medicare Advantage Plan (Part C).
The main differences between Original Medicare and Medicare Advantage plans involve coverage, costs, provider networks, and additional benefits.
Structure
Original Medicare includes Part A, which covers hospital stays, skilled nursing facility care, hospice, and some home health care, and Part B, which covers doctor visits, outpatient services, preventive care, and durable medical equipment. Additionally, Part D, an optional plan purchased separately from private insurers, provides prescription drug coverage.
Medicare Advantage combines Part A, Part B, and often Part D into a single plan, offered through private insurance companies approved by Medicare. These plans frequently include additional benefits such as dental, vision, hearing, and fitness memberships.
Cost
With Medicare, you pay a monthly premium for Part B and, optionally, for Part D if you choose drug coverage. It typically includes deductibles and coinsurance, where you pay 20 percent of most Part B services after meeting the deductible. However, there is no out-of-pocket maximum, so costs can accumulate significantly if extensive care is needed.
Medicare Advantage plans generally have lower upfront premiums, though you’ll still need to pay the Part B premium. Costs vary depending on copayments, deductibles, and coinsurance. Unlike Original Medicare, Medicare Advantage plans include an annual out-of-pocket maximum, capping the total amount you pay for covered services each year.
Access
With Medicare, you can visit any doctor or hospital in the United States that accepts Medicare, without the need for referrals or restrictions based on provider networks.
Medicare Advantage typically requires you to use a network of doctors and hospitals (HMO or PPO plans). Referrals may also be needed for specialist visits. Out-of-network care is generally more expensive and may not be covered at all, depending on the plan.
Prior Authorizations
Medicare Advantage plans often require prior authorization for certain tests or procedures, especially those that are more costly for insurers. As a result, you may face extra steps to get them approved.
However, some Medicare Advantage plans are known for being particularly strict about approving this type of care, which can lead to delays or even denials.
According to the Kaiser Family Foundation, 99 percent of Medicare Advantage enrollees must obtain prior authorization for at least one service. In contrast, Original Medicare requires prior authorization for only a limited number of services.
Return to Original Medicare
If a Medicare Advantage plan doesn’t meet your needs, you can switch plans or return to Original Medicare during the annual fall open enrollment.
However, moving back to Original Medicare can be challenging because getting affordable Medigap coverage may be difficult after your initial enrollment period. Medigap is essential for many Original Medicare enrollees since it helps cover costs without an annual out-of-pocket limit.
While some seniors are satisfied with Medicare Advantage, experiences vary widely based on each plan’s rules, benefits, and costs. Understanding the potential downsides of Medicare Advantage is crucial before enrolling to avoid regret.