Medicare Advantage vs. Original Medicare

Original Medicare and Medicare Advantage are two vitally important health insurance programs that serve seniors in this country. If you’re wondering what makes them different, you’re not alone.

The world of Medicare can be confusing, but you’re making great headway if you’ve gotten this far. It’s smart to get familiar with all the similarities and differences between these two programs so you can make an informed decision.

What Is the Difference Between Original Medicare and Medicare Advantage?

Original Medicare is administered by the federal government. It includes Part A (hospital insurance) and Part B (medical insurance). Medicare Advantage plans, or Part C plans, are offered by private insurance companies. It combines the benefits of Parts A and B and often includes additional benefits. The table below provides a high-level overview of each program.

Original Medicare vs. Medicare Advantage: Coverage

	Original Medicare	Medicare Advantage
Medical Services	Hospital stays, doctor visits, outpatient care, durable medical equipment, preventive services	All benefits covered by Original Medicare and often additional benefits* combined into one plan
Prescription Drug Coverage	Prescription drug coverage is not included. A separate plan (Part D) can be purchased.	Many plans include prescription drug coverage, though you can also purchase a plan without it.
Dental, Vision, Hearing and Wellness Benefits	These benefits are not covered.	These and other benefits are often included.* *Benefits vary by plan.

Original Medicare, sometimes referred to as traditional Medicare, offers standardized health insurance coverage across all 50 states for seniors and some young people with disabilities. Medicare Advantage, on the other hand, includes all the same benefits covered by Parts A and B with some additional benefits. Prescription drug coverage is often included in a Medicare Advantage plan as well. These plans are referred to as Medicare Advantage Prescription Drug (MAPD) plans.

Overall coverage with an MAPD plan is often comparable to the coverage you’d get if you had Original Medicare, a Part D prescription plan, and a Medicare Supplement plan. With an MAPD plan, your benefits are bundled into one plan.

Original Medicare vs. Medicare Advantage: Costs

	Original Medicare	Medicare Advantage
Deductibles and Copays	The 2024 Part A deductible is $1,632 per benefit period. The 2024 Part B deductible is $240 annually.	Deductibles and copays vary by plan and provider. A range of options is available.
Monthly Premiums	The Part A premium is $0 for people who paid Medicare taxes long enough while working. The 2024 Part B premium is $174.40 each month or more depending on income.	Medicare Advantage plan premiums vary and can change from one year to the next. Some plans come with $0 premiums.
Out-of-Pocket Costs	There is no limit on out-of-pocket costs for members, unless a separate Supplemental Insurance, or Medigap, plan is purchased.	Once you pay the plan’s limit, 100% of covered benefits are paid by the plan for the remainder of the year.

Total cost of ownership for each program depends on many different factors, including individual healthcare needs, geographic location and specific plan options. Let's look at the key cost considerations.

Premiums

Most people do not pay a premium for Medicare Part A (hospital insurance) if they or their spouse paid Medicare taxes while working. However, there is typically a premium for Medicare Part B (medical insurance), which is determined by income. If a beneficiary needs a separate Medicare Part D plan for prescription drug coverage or a Medigap policy for supplemental coverage, those plans will have premiums as well.

Medicare Advantage plans sometimes have lower monthly premiums compared to traditional Medicare, as they are offered by private insurance companies that can often negotiate lower rates with healthcare providers.

Out-of-Pocket Costs

While Original Medicare covers a significant portion of healthcare expenses, it does come with out-of-pocket costs such as deductibles, coinsurance and copayments. These costs can add up quickly, particularly if frequent medical services or treatments are required. Unlike traditional Medicare, Medicare Advantage has an annual limit on out-of-pocket expenses for beneficiaries, unless supplemental coverage is obtained. Medigap, or Medicare Supplement Insurance, is extra insurance you can buy from a private health insurance company to help pay your share of out-of-pocket costs in Original Medicare.

	Original Medicare	Medicare Advantage
Provider Network	Members can see any provider in the U.S. who accepts Medicare.	Plans often have a defined provider network. Seeing providers outside the network may incur additional cost.
Referrals	There is no need to get a referral to see a specialist.	Some plans will require a referral to see a specialist.

Provider Networks

With traditional Medicare (Parts A and B), beneficiaries can choose any doctor, specialist, hospital or other provider that accepts Medicare across the country. Medicare Advantage plans typically operate within specific provider networks and members may be required to use in-network providers to receive full coverage.

These In-network providers have agreed to accept the plan's negotiated rates for services, which generally results in lower out-of-pocket costs for beneficiaries. Out-of-network providers may still be covered by Medicare Advantage plans, but beneficiaries may incur higher costs, unless it’s for emergency care.

Primary Care Provider (PCP) and Referrals

Some Medicare Advantage plans require beneficiaries to choose a primary care physician (PCP) from within the plan's network. The PCP serves as the main point of contact for coordinating healthcare services and may be responsible for issuing referrals to specialists.

Medicare vs. Medicare Advantage and How to Choose

Ultimately, the right choice depends on individual circumstances and priorities. Health status, history and any chronic conditions should be considered. If you have needs that require more comprehensive care, you’ll want a different level of coverage than someone who expects to mainly use preventive services during the plan year.

If you like your healthcare provider and want to stick with them, you’ll want to find out if they are in-network with the Medicare Advantage plan you’re considering, as well as any specialists that you need to see.

Keep in mind costs for additional healthcare expenses too. For example, with Original Medicare, if you need a routine vision exam, you may be responsible for 100% of the cost. Medicare Advantage Part C plans can help pay for routine exams, contact lenses and eyeglasses.

It’s a similar situation for hearing exams and hearing aids. They typically aren’t covered by Original Medicare, though hearing exams that are considered medically necessary may be covered. Again, some Medicare Advantage plans offer coverage for these and other services to help offset total healthcare costs.

Each year presents a new opportunity to adjust coverage based on your satisfaction with your plan and changing healthcare needs.

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More About Medicare Advantage

Disclaimers

Sources

Medicare.gov: Compare Original Medicare & Medicare Advantage
Medicare.gov: Joining a Plan
Medicare.gov: Medicare Costs