As open enrollment approaches, you may be wondering what’s better for you: Original Medicare or a Medicare Advantage plan. Here, we lay out for you the main pros and cons of both.
What are Medicare and Medicare Advantage?
Original Medicare is made up of Medicare Part A (hospital insurance) and Part B (medical insurance). If you are already receiving Social Security benefits, you will automatically be signed up for Original (sometimes also called Traditional) Medicare.
But there is another option called Medicare Advantage. Medicare Advantage plans offer all of the coverage of Original Medicare, but are run by private insurance companies regulated by Medicare. Some Medicare Advantage plans come with additional coverage, like prescription drug coverage, vision, and hearing care. About one-third of all Medicare beneficiaries are now enrolled in a Medicare Advantage plan.
With Medicare Advantage plans, you pay a monthly premium to your plan plus your monthly Part B premium. Some plans have $0 premium, but they may come with higher copays and coinsurance.
Here are some of the main pros and cons Original Medicare and Medicare Advantage.
Pros of Original Medicare
- You can use any doctor who accepts Medicare; there are few limitations on doctors and hospitals you can use.
- With Original Medicare plus Medigap, you can get good full coverage at predictable costs.
- Good for people who travel a lot or live elsewhere in the winter because of the freedom to see doctors anywhere.
Cons of Original Medicare
- You need to enroll in a separate Part D prescription drug plan.
- If you want supplemental insurance, you’ll need to enroll in a Medigap plan.
- There is no limit to how much you pay out of pocket for medical services each year, but Medigap plans can help with that.
Pros of Medicare Advantage
- Less paperwork to deal with.
- Emphasis on preventive care so that health problems don’t arise.
- Many plans come with extra benefits such as vision, dental, and prescription drug coverage. Some ever have wellness programs, gym membership discounts, and around-the-clock nurse hotlines.
- Everything is conveniently packaged together and you don’t need to purchase supplemental Medigap coverage.
- There is a spending cap on how much you can spend out of pocket each year.
- Better for people who don’t go to the doctor very often.
- Better for people on a tight budget.
Cons of Medicare Advantage
- Limited access to doctors and hospitals. You have to use doctors and hospitals in your plan’s network.
- More red tape to go through, like having to get prior approval from a primary care doctor before seeing a specialist.
- Medicare Advantage plans receive money from the government each month and risk losing money if their medical expenses go over the amount they are paid, incentivizing them to limit services.
- You cannot join a Medicare Advantage plan if you have End Stage Renal Disease (ESRD).
- Care is limited when traveling – only emergency and urgent care are covered.
- Certain services, such as short hospital stays or oxygen, can cost more under a Medicare Advantage plan.
- Once you enroll in Medicare Advantage, you’re in the plan for a year. There’s a disenrollment period from January 1 to February 14 during which you can switch back to Original Medicare, and open enrollment during which you can move to a different plan or go back to Original Medicare.
- Each Medicare Advantage plan has its own networks, copays, and drug formularies.
When comparing plans, look at the premium, deductible, coinsurance, and copayment costs for each plan and pick the one with costs and benefits that are right for you. Check Medicare’s Plan Finder or see a reputable Medicare insurance broker to see which plans are available in your area.