When it’s time to enroll in Medicare, it can be challenging to navigate all the options to choose what works best for you. If you prefer a straightforward approach with broad coverage, Original Medicare could be your ally. Prefer a plan with extra benefits and an all-in-one package? Medicare Advantage might just be your match. Let’s take a closer look at some of the pros and cons of Medicare Advantage plans vs. Original Medicare.

Difference between Original Medicare and Medicare Advantage 

Original Medicare is a multi-part healthcare program funded by the federal government. Part A, also known as hospital care, primarily covers inpatient care. Part B covers outpatient care, doctor visits, and many types of preventive care. It can also cover much of the cost of durable medical equipment (DME), such as special mattresses and beds, glucose monitors, and more.

Original Medicare is widely accepted by healthcare providers nationwide and does not typically require referrals to see specialists. However, it may not cover all healthcare costs, often leading to the purchase of additional supplemental insurance.

You can expand your coverage by enrolling in:

• Prescription drug coverage (Part D) — coverage for prescription drugs, which are not covered by Medicare Part A and B. It is a voluntary benefit offered through private plans, designed to help lower the costs of medications for enrollees.
• A Medigap (Medicare Supplement) to cover gaps, like copayments or deductibles.

Medicare Advantage, also called Medicare Part C, refers to private insurance plans you can purchase that offer coverage similar to what you would get with Original Medicare. Rather than the three separate parts of Original Medicare, Medicare Advantage plans bundle Parts A and B and usually D into one plan. By law, Medicare Advantage plans must cover what the Original Medicare covers, but are also allowed to cover limited dental, hearing, and vision expenses, whereas basic Medicare coverage does not include these items. Many Medicare Advantage plans also cover gym memberships. 

Medicare Advantage (MA) plans can be a great lower-cost Medicare solution, especially compared with a package that includes basic Medicare, a Part D drug plan, and a Medigap supplement plan. According to Kaiser Family Foundation, 48% of Medicare enrollees are now in Medicare Advantage plans, and the rest have basic Medicare.

Is Medicare Advantage good? 

If you are wondering if MA is good, the answer is “it depends”.

For some people, it is important that Medicare Advantage plans limit costs spent out of pocket, which helps them better manage their healthcare budget. Once you hit this cap, the plan pays for all covered expenses, which can be a financial lifesaver.

Apart from that, Medicare Advantage plans often include Part D coverage, which gives many recipients peace of mind because they don’t have to purchase any additional prescription drug plans. Beyond that, the cost of a Medicare Advantage plan that already includes a Part D plan can be much less than what someone with basic Medicare would pay for a separate Part D plan and a Medigap policy. 

Another great thing about Medicare Advantage plans is that they provide coverage for much-needed services that are not covered by Original Medicare. Many people are surprised to learn that Original Medicare does not cover dental or vision costs and procedures. Some who choose to stay with Original Medicare purchase Medigap coverage that may fill these gaps. Others prefer to have all their coverage in one place with a Medicare Advantage plan. 

Some pros of Medicare Advantage include:  

• Your Medicare Advantage plan will still cover Parts A and B. You’re still in the Medicare Program, with the same rights and protections. 
• Most Medicare Advantage plans offer additional benefits that Original Medicare doesn’t cover, such as vision, hearing, dental and more. 
• Medicare Advantage plans have a yearly limit on your out-of-pocket costs. Once you reach this limit, you’ll pay nothing for covered medical services – a perk not available with Original Medicare (unless you purchase an additional Medigap plan). But each Medicare Advantage plan can have a different limit which can change yearly, so it’s important to check your specific plan. The in-network out-of-pocket maximum may reach up to $8,300 in 2023 and up to $8,850 in 2024, while the combined maximum for both in and out-of-network services will typically be higher, reaching up to $12,450 in 203 or $13,300 in 2024.
• You can join a Medicare Advantage Plan even if you have a pre-existing condition. 
• You don’t need (and are not permitted) to buy Medigap. 
• If you have specific chronic health issues, there are Special Needs Plans (SNPs) designed to cater specifically to your medical needs, offering targeted care and coverage.

Limitations of Medicare Advantage plans 

Medicare Advantage plans can simplify managing your health insurance, but they are not always the best choice for everyone.

For example, when you have a Medicare Advantage plan, you will still pay the Medicare Part B monthly premiums. In 2024, this premium is $174.70 for most people. Apart from that, you may have to pay an additional amount each month for your plan. Here are some of the other disadvantages: 

• Medicare Advantage plans typically have a defined network of doctors and hospitals that you must use to get the lowest out-of-pocket costs. If you step outside of this network, you might end up paying more, or your services may not be covered at all (like in HMO plans). Basic Medicare permits people to use any healthcare provider in the country who accepts Medicare, and nearly all of them do. 
• You might need a referral from your primary care physician before seeing a specialist. 
• While you might find plans with low or even $0 premiums, there can be other costs like copays and deductibles that add up. Plus, each plan can set its own out-of-pocket costs within the limits set by Medicare.
• Providers can join or leave a plan’s provider network anytime during the year, and your plan can change your network’s providers anytime during the year. If this happens, you may need to choose a new provider. 
• The benefits can vary greatly from one Medicare Advantage plan to another, which can be confusing. You have to be diligent to make sure the plan you choose covers your drugs and your preferred doctors are in-network.
• Medicare Advantage plans are usually restricted to a specific geographic area. If you move out of this area, you may need to find a new plan, which can be a hassle, especially for those who live in multiple states throughout the year.
• If you travel often, you might find that your coverage doesn’t travel with you. Emergency services are covered everywhere, but for non-emergency services, you may be limited to your plan’s service area.

The key to whether a Medicare Advantage plan is right for you is whether a plan’s network of doctors, hospitals, and other health providers meets your needs. It can be very hard to find out exactly who’s in a plan’s network. Even if your current doctors are in-network now, there’s no guarantee they will remain in it next year, which could force you to change providers.

If the plan you chose stops participating in Medicare, you’ll have to join another Medicare Advantage health plan or return to Original Medicare. However, plans can stop participating in the Medicare Advantage program only at the end of a calendar year. Private insurance companies that sell those plans must give advance notice, so you have time to select a new plan or return to Original Medicare for the following year. 

Costs: Medicare Advantage Vs. Original Medicare

Both have different structures for premiums, deductibles, copayments, and coinsurance.

Premiums

Original Medicare includes Part A (hospital insurance) and Part B (medical insurance). For most people, Part A is premium-free, while Part B has a standard monthly premium, which is $174.70 in 2024. Original Medicare beneficiaries often enroll and pay extra for a separate Part D and Medigap plan for additional coverage.

Medicare Advantage plans, offered by private insurers, may have additional premiums on top of the Part B premium, but some plans offer $0 additional premium options.

Deductibles

With Original Medicare, there are separate deductibles for Part A and Part B. In 2024, the Part A deductible for each benefit period was $1,632, and the annual Part B deductible is $240. Medicare Advantage plans often have different deductible structures, and some may offer lower or no deductibles, but this varies by plan.

Copayments and Coinsurance

For services covered under Original Medicare, after meeting the deductible, you typically pay 20% coinsurance. Medicare Advantage plans may have copayments for specific services instead of a 20% share, which can be lower for routine visits but higher for specialized services.

Out-of-Pocket Maximums

One of the most significant financial advantages of Medicare Advantage is the out-of-pocket maximum protection. In 2024, the maximum for in-network services is capped at $8,850. Original Medicare does not have a cap unless you purchase additional Medigap insurance, which comes with its own costs.

Source: https://www.kff.org/medicare/issue-brief/medicare-advantage-in-2023-premiums-out-of-pocket-limits-cost-sharing-supplemental-benefits-prior-authorization-and-star-ratings/

Who should choose Medicare Advantage?

Medicare Advantage (MA) plans are suitable for individuals who prioritize lower upfront costs and value the convenience of having multiple services bundled together, such as hospital, medical, and often drug coverage.

If you’re generally healthy, don’t frequently visit doctors, and don’t mind having a defined network of doctors and facilities to choose from, MA can be a cost-effective and streamlined choice. It’s also beneficial for those who value extra benefits like dental, vision, and wellness programs, which are not typically covered by Original Medicare.

Who should opt for Original Medicare?

Original Medicare is the right choice for those who want the flexibility to visit any doctor or hospital that accepts Medicare, which is most across the country. This is particularly important for those with existing health conditions that require regular visits to multiple specialists or those who value having a broad selection of healthcare providers.

Additionally, if you travel frequently within the U.S. and want to ensure coverage regardless of the state you’re in, Original Medicare provides that peace of mind. People willing to pay for a separate Part D drug plan and possibly a Medigap policy to cover additional out-of-pocket costs will find Original Medicare to be the best fit.

How to switch from Original Medicare to Medicare Advantage? 

If you are weighing the pros and cons of Traditional Medicare vs. Medicare Advantage, you may decide to switch plans. There are several ways you can do so: 

• During the Initial Enrollment Period: Your IEP begins three months before you turn 65 and ends three months after. During this seven-month period, you can enroll in Medicare, then switch to Medicare Advantage. 
• During the Annual Enrollment Period: The AEP is from October 15 to December 7. 
• During a Special Enrollment Period: You may qualify for a SEP if you are losing your employer-sponsored coverage. Most of the time, the SEP is a two-month period. 

You can make the switch by:

• Using Hella Health’s personal medicare shopper
• Calling Medicare helpline at 1-800-MEDICARE (1-800-633-4227), TTY 1-877-486-2048
• Via the provider’s/Medicare website

If you want to switch to Medicare Advantage, it can be challenging to sort through all the plan options. You may want to get assistance from an expert who can help you find the plan with the coverage that will work best for your health conditions and deliver peace of mind. 

Medicare Advantage or Original Medicare?

An increasing number of people are enrolling in Medicare Advantage plans each year. In 2018, the number of people enrolled topped 20 million. And experts predict that half of all Medicare-eligible people will be enrolled in a Medicare Advantage plan by 2025. As they age, more people are looking for ways to simplify managing their healthcare long-term. 

If you are transitioning from employer coverage, you might want to move into a plan similar to what you already get. For others, the cost is the primary driver. If you are approaching Medicare eligibility, take some time to research Medicare vs. Medicare Advantage so you don’t feel rushed making your decision. A good place to start is this useful Medicare resource center.

Questions about Medicare?

Shoot us an email at medicare@hihella.com.

Article updated on November 22, 2023.