The Big Choice: Original Medicare vs. Medicare Advantage

Which path you take will determine how you get your medical care — and how much it costs

As you contemplate how Medicare will cover your healthcare needs, your first important decision should be whether to enroll in original Medicare, which is managed by the federal government, or a Medicare Advantage plan, which is a private insurance alternative.

Imagine having to decide between paying for the prix fixe dinner (Medicare Advantage) at a restaurant where the courses have already been chosen for you or going to the buffet (original Medicare).

If you choose original Medicare, your plan includes Part A (hospital care) and Part B (doctor visits, lab tests, and other outpatient services) (prescription drugs). Part C, a Medicare Advantage plan, will be more like a set menu if you pick it because a private insurer has already integrated parts A, B, and almost always D into one comprehensive plan.

Some aspects of your care will remain the same regardless of the plan you choose. Both choices will provide coverage for any preexisting conditions you might have and give you access to prescription drug insurance.

Whether you select original or Advantage, however, will have a big impact on how you use Medicare. Here is a comparison of their differences.

Going to the doctor’s

Any primary care physician and specialist who accepts Medicare under the original Medicare is an option for you. There is no requirement for referrals, and you won’t have to worry if your doctor decides to no longer participate in a plan’s network. The Kaiser Family Foundation reports that only 1% of medical professionals decline to accept Medicare patients. For example, 83 percent of family practitioners accept new Medicare patients. There is a good chance that the doctor you are presently seeing will accept Medicare, so you won’t need to change providers.

Through Medicare Advantage, you will effectively be enrolling in a private insurance plan, much like you probably did through your job. The two most common forms are preferred provider organizations and health maintenance organizations (HMOs) (PPOs). Under Medicare Advantage’s managed care schemes, you would normally have a primary care physician who would oversee your care and require a referral to a specialist. HMOs frequently provide a smaller range of medical providers than PPOs. Medicare Advantage plans are becoming more popular. The average enrollee has access to more than 40 such plans, and there are a little over 30 million Medicare members, or 47% of all beneficiaries, who are enrolled in one of these plans.

Covered care

Medicare will pay the majority of your medical costs, but some charges, including cosmetic surgery or routine dental, eye, and hearing care, are typically not covered by the program. However, there are differences in the services for which you are provided with financial aid.

Original Medicare covers a variety of medical treatments, including hospitalizations, doctor visits, diagnostic tests like X-rays and other scans, blood work, and outpatient surgery.

If you choose Medicare Advantage, you will receive all the services for which you are eligible under original Medicare. Some MA plans also include services that the first choice did not. They include some dental, ocular, and hearing procedures. A few MA plans also include access to health clubs. In recent years, the federal government has also increased the range of services that these plans can offer, including home modifications like wheelchair ramps to help Medicare beneficiaries remain in their own homes, transportation to doctors’ offices, and coverage for some over-the-counter medications, acupuncture, and meal delivery. In accordance with the plan, several services are provided.

Costs

Part A (hospitalizations) and Part B (prescription medications) premiums, deductibles, and coinsurance amounts under original Medicare are set by the federal government (physician and outpatient services). For instance, Part B beneficiaries are responsible for 20% of the cost of a doctor’s visit or lab test. The government also sets maximum deductible rates for the Part D prescription medication program, even though premiums and copays differ by plan. Many beneficiaries who select original Medicare also purchase supplemental insurance, generally referred to as Medigap, to pay for a variety of out-of-pocket costs that Medicare officials estimate may reach a yearly total of thousands of dollars. There is no annual cap on out-of-pocket costs.

Medicare Advantage participants may also have to pay an additional premium for the MA plan in addition to the annual Part B premium set by the government. However, most MA plans have set copay amounts for doctor visits, which frequently translates to cheaper out-of-pocket costs than original Medicare. Compared to paying the 20% coinsurance for doctor visits and other Part B services, this is not the case. Another aspect of MA plans is the annual cap on out-of-pocket expenses.

You should also check your eligibility for Medicaid or any of the extra aid programs that Medicare offers low-income enrollees.

Logistics

You will likely need to sign up for all four of the original Medicare parts—Part A, Part B, a Part D prescription drug plan, and supplemental or Medigap insurance—in order to be eligible for all of the services it provides. You must examine the claims that hospitals and medical professionals send to Medicare for each service.

Medicare Advantage is a single plan that combines Part A and Part B. Furthermore, around 90% of MA plans also include prescription drug coverage, saving you the trouble of enrolling in a separate Part D coverage. There are no Medigap insurance choices available for Advantage plans. You should carefully review the network of your doctors to be sure they are all included in the plan, but this could change over time.

Where you live

You can receive care under original Medicare anywhere in the United States as long as the provider accepts Medicare.

Plans for Medicare Advantage are based on localized networks of medical specialists that are frequently self-contained. Therefore, your care could not be covered or you might have to pay more if you go to out-of-network doctors or own a vacation home that you frequently use. Additionally, while MA plans are generally accessible across the country, the variety of plans is more limited in rural areas.

Medicare Original or Medicare Advantage does not cover your medical costs when traveling abroad.

Note from the editor: This article’s material, which was first published on July 1, 2020, has been updated.

Dena Bunis discusses Medicare, healthcare, health policy, and Congress. She also contributes to the Medicare Made Simple section of the AARP Bulletin. Award-winning writer Bunis spent decades working for urban daily newspapers. She was the Orange County Register’s Washington bureau chief and Newsday’s health policy and employment reporter.