Medicare Advantage vs. Medicare

Seniors have more options than ever when choosing a Medicare health insurance plan. Cost is an essential concern in choosing health insurance. Still, you also want to consider the coverage and options available in your area.

Original Medicare is confusing, but Medicare Advantage is an alternative program that makes more sense for some seniors.

Who Qualifies for Original Medicare?

You can sign up for Medicare when you turn 65. If you're younger than 65 and have a disability or permanent kidney failure, you may also qualify.

What is Original Medicare?

Original Medicare refers to the health insurance program administered by the federal government.

They provide Part A, which includes hospitalization, home health care, skilled nursing facility care, and hospice care.

And they provide Part B: doctor's services, labs, tests, surgeries, preventative medicine, and durable medical devices. With Medicare Part B, you pay a monthly premium.

On Original Medicare, everyone receives the same coverage benefits through the government. Fortunately, you do not have to stress whether the plan will accept you for coverage. This health insurance guarantees coverage regardless of your pre-existing conditions.

Medicare Part D covers prescription drugs and vaccines. You would pay a separate premium for Part D.

With Original Medicare, you can see any doctor or go to any hospital in the United States that accepts Medicare.

How Much Does Original Medicare Cost?

Most people pay the same premium because the government sets the rate. If you had a high income, you would pay more based on your earnings.

Most people sign up for Original Medicare at age 65. However, if you wait, you must pay a late enrollment penalty.

With Part A, you probably will not pay a monthly fee. If you worked enough, you paid for it with your taxes over the years. If you did not work enough, you must pay a monthly premium of $458. But that doesn't mean your treatment is free.

Each time you are hospitalized or stay in a skilled nursing facility, Original Medicare starts a new benefit period. It ends when you have been out for 60 days or more. You must pay a separate $1,408 deductible for each benefit period.

You pay $0 of coinsurance for the first 60 days in the hospital. From day 61 to day 90, you pay $352 per day. From day 91 and beyond, you pay $706 per day.

Essentially, Part A requires that you pay a deductible and 20% coinsurance. Unfortunately, you keep paying 20% endlessly. Original Medicare has no maximum limit of how much you pay out-of-pocket. That can become expensive quickly.

Complicated? Oh, yes.

Most people pay only a $144.60 premium for Medicare Part B. However, if you earned a high income, your rates can range from $202.40 to $491.60 per month. Also, you have an annual deductible of $198, and then you pay 20% coinsurance. Again, there is no maximum limit on how much you would spend out-of-pocket.

Who Should Buy Original Medicare?

Original Medicare is a good option for people who:

  • Travel outside their home area frequently
  • Spend winter months in warm climates like Florida or Arizona
  • Want the flexibility to receive treatment anywhere in the US
  • Want to see a doctor who does not participate in a Medicare Advantage plan
  • Want to see a specialist without first getting a referral
  • Don't mind spending more for convenience

What is Medicare Advantage?

Medicare Advantage is also known as Medicare Part C. It is not administered by the federal government, like Part A, Part B, and Part D. Instead, private insurance companies provide coverage and follow national guidelines and rules.

It is a unique alternative to Original Medicare. Original Medicare requires that you sign up for each part individually. Medicare Advantage bundles them, so you have one ID card for everything.

Since Medicare Advantage replaces Original Medicare, your medical provider bills the insurance company instead of the government. Medicare Advantage shifts the risk from the government to the insurance company.

In turn, the federal government pays the insurance company a fixed amount each month to administer your Medicare. The insurance company hopes it costs less to insure you than the government pays them. The federal government reduces the risk of a sick patient costing more than the premiums they collect.

Are There Different Types of Medicare Advantage Plans?

There are two common types of Medicare Advantage plans: PPO and HMO.

A PPO is a preferred provider organization. You have the flexibility to choose a provider within the network. You do not need to get referrals from your primary care physician to see specialists. If you need treatment outside the medical network, you can receive it and pay a bit more. Typically, these plans cost a little more.

An HMO is a health maintenance organization. It includes hospitals, doctors, clinics, and services in your local area, but little or no coverage out-of-network. With more restrictions come financial perks. These plans tend to cost less out-of-pocket.

How Much Does Medicare Advantage Cost?

Most importantly, with Medicare Advantage, you can get great coverage for a low cost. Sometimes as low as $0 per month.

In addition, Medicare Advantage plans have a maximum out-of-pocket limit of $6,700 per year. Recall that Original Medicare has no maximum limit.

Should I Get Medicare Advantage?

Medicare Advantage plans are convenient, and most include Medicare Part D. Also, many include extra benefits like vision and dental coverage and fitness programs.

If you are healthy, rarely go to a doctor or travel, you may find Medicare Advantage to be a great fit. Generally, they have lower premiums and out-of-pocket costs.

If Social Security is your sole source of income, Medicare Advantage may be more affordable than Original Medicare with a supplement.

Most importantly, if you choose Medicare Advantage, pick one that includes your doctors. If not, you may have to find new providers.

When Can I Change Medicare Plans?

If you would rather have Original Medicare or a different Medicare Advantage plan, you can switch during the Annual Enrollment Period from October 15 to December 15.

Which is Better: Original Medicare or Medicare Advantage?

What works for your friend is not necessarily appropriate for you.

Both Original Medicare and Medicare Advantage provide comprehensive medical insurance with out-of-pocket costs like deductibles and copays.

Medicare Advantage’s out-of-pocket maximum is $6,700, and some prefer the security knowing how much they will have to pay. Original Medicare has no maximum, so you pay 20% coinsurance forever.

Since Original Medicare has no networks, it is usually better for people who travel around the US, because they can see any provider. Medicare Advantage has minimal coverage outside your residential area.

However, Medicare Advantage is much simpler and easy-to-use than Original Medicare. You have one monthly premium for everything. With Original Medicare, you must pay separate premiums for Part B, Part D, and whichever Medicare supplement you have.

Where Can I Get Help with Choosing a Medicare Plan?

AARDY is the nation's fastest Medicare insurance marketplace. You can compare Medicare supplements and Medicare Advantage plans to find the one that best fits your needs.


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