What is Medicare?
Medicare is a program the US government provides that offers healthcare insurance coverage for people over 65, those with end-stage renal disease (ERSD), and those under 65 who receive social security disability insurance. The government set up the Medicare program to assist these groups of people in finding adequate health insurance coverage at an affordable price.
Medicare is partly financed by Medicare and Social Security taxes, which you pay throughout your career. It is also financed by the federal government and in part by the premiums paid by Medicare users.
What is Original Medicare?
It is the federal government’s conventional, straightforward fee-for-service deal. The federal government offers comprehensive medical cover, all premiums are disbursed to the government. Original Medicare includes Part A (which guarantees hospital care) and Part B (which guarantees medical care, such as lab tests, medical equipment, and doctor visits). Those above 65 are eligible for Original Medicare, it insures 80% of your doctor’s bills after paying your deductible. However, it does not include prescription medication coverage.
What is Medicare Advantage?
Medicare Advantage, or Medicare Part C or MA plans, offers Medicare Parts A and B. It covers outpatient doctor visits and inpatient hospital stays. Medicare Advantage plans may include prescription medication coverage called Part D within the plan. These plans are administered by private insurance companies with contracts with the federal government. The insurance company gets the premium.
Medicare Advantage Plans typically cost less than Original Medicare, it requires you to pay a copayment and a deductible, and the rest of your doctor’s bills are covered. Medicare Advantage plans usually restrict medical services to a discrete area to reduce costs.
Original Medicare Pros
- Part A is free for most people
- You can see any Medicare-certified provider in the US
- Medicare can pay for the services you need when you have a life-limiting illness
- Referrals to professionals are generally optional
Cons of Original Medicare
- It does not offer coverage for services such as vision, hearing, and dental
- Drug coverage requires Part D
- If you purchase a Medicare Supplement Insurance (Medigap) policy to leverage Part A and B, you must pay monthly premiums upfront regardless of whether or not you access healthcare
- There’s no out-of-pocket maximum, so you’ll have unpredicted costs if you access healthcare services without a supplemental policy
Medicare Advantage Pros
- Access to the same advantages as Original Medicare Parts A and B
- Lower front-end charges with monthly premiums lower than Medigap
- It covers vision, dental, hearing, and gym membership discounts
- Limit on yearly out-of-pocket expenses, meaning healthcare costs are predictable
- Medicare Advantage benefits are bundled together, so one does not need separate drug coverage
- Women can speak directly to an in-network women’s professional without a referral for preventative and routine services
- If your healthcare needs or Medicare Advantage Plan changes, you can choose an alternative plan
- There are numerous types of Medicare Advantage Plans to select from
Cons of Medicare Advantage
- Cost jurisdiction can restrict provider choice
- Restricted service area: It may be an issue if you reside in or travel to a different location for a longer period when the plan is active
- A Medicare Advantage plan may need you to wait for prior authorization for treatments and medications, or you can spend time getting advanced plan approval upfront
- If you previously had an Original Medicare plan with Medigap and chose a Medicare Advantage Plan, you might find it challenging to return to your initial Medigap plan
- Most people need a referral to a specialist
Comparing Medicare Advantage vs. Original Medicare by Scenario
Your general health, lifestyle, and finances play significant roles in determining whether Original Medicare or Medicare Advantage is right for you. Medicare Advantage deals suit people with minimal financial resources but in good health. These plans have lower premiums than Original Medicare, but you must spend more out-of-pocket on their services.
Medicare Advantage plans are unsuitable for those with chronic health conditions as they may require expensive copays. If you have exemplary health now, consider your risk of health conditions that may require hospitalization and regular doctor visits in the future. This will inform you if you incur much higher charges under a Medicare Advantage plan.
When Does Original Medicare Coverage Make Sense?
Original Medicare can be a wise choice if you have a chronic condition or expect to get one. Monthly premiums for Original Medicare might be higher, however, coinsurance and other costs associated with other healthcare services and doctor visits may be inexpensive over time.
Final Word
Original Medicare and Medicare Advantage differ in various areas, including coverage, costs, and choice of providers. The federal government administers Original Medicare, while private insurance firms administer Medicare Advantage. However, whether you choose the Medicare Advantage or Original Medicare plan, you are considered a Medicare beneficiary.
