April 3, 2020

Choosing Between Original Medicare & Medicare Advantage

One question many people have when they  first get Medicare is whether to choose Original Medicare or a Medicare Advantage Plan. Before making this decision it is important to understand the basics of Original Medicare and Medicare Advantage plans. Here are some key points to consider.

  • Original Medicare, also known as traditional Medicare, is the standard fee-for-services program provided directly by the federal government.  Unless you choose otherwise, this is what you will automatically be enrolled in when your Medicare starts.  Under Original Medicare, the government pays directly for your healthcare services, and you can use any doctor or hospital that accepts Medicare.
    • You may go directly to the doctor or hospital when you need care. No prior authorization or referral is needed.
    • You must pay your Part B monthly premium.
    • You generally pay a coinsurance, or 20% of Medicare’s approved payment amount, for the services you receive.
    • There are limits on the amounts doctors and hospitals can charge you for care.
    • For prescription drug coverage, you will in most cases need to sign up for a stand-alone Medicare Part D plan.
    • You may choose to purchase additional supplemental coverage, or a “Medigap plan,” to cover the 20% of your healthcare charges that Medicare does not cover. Medigap plans and pricing can be found at Medicare.gov.
  • Medicare Advantage Plans, sometimes referred to as Part C, are offered through private companies who have a contract with the federal government and are paid a fixed amount per person to provide Medicare benefits. While your Medicare is provided through a private company, you do still have to pay the monthly Medicare Part B premium.  These companies often also charge an additional monthly premium for their plan.  Medicare Advantage plans are required to cover all the same basic services as Original Medicare, and they usually also include prescription drug coverage. It’s like having your Medicare, supplemental policy, and drug plan all rolled into one.
    • You usually have to see healthcare providers who are in your plan’s network and service area in order to pay the lowest cost for services.
    • You often are required to get prior authorization or a referral from your primary care provider to see specialists, have procedures, and purchase durable medical equipment.
    • You often must pay a fixed co-payment for every service or item you receive. The amount of these co-payments vary from plan to plan.
    • You have an annual limit for Part A and B expenses. For example, the maximum out-of-pocket costs for many plans in 2020 is $6,700.
    • A Medicare Advantage plan may offer some benefits that Original Medicare does not cover, such as dental, vision, and hearing.
    • You cannot purchase a Medigap plan in addition to your Medicare Advantage plan.
  • Here are a few questions to ask yourself when deciding between Original Medicare and Medicare Advantage:
    1. Costs: What premiums and out-of-pocket expenses will I be responsible for?
    2. Supplemental insurance: Will I be able to purchase an affordable Medigap policy to go with Original Medicare? If I have retiree coverage, how will it work with my Medicare?
    3. Provider access: Will my current doctors accept this plan? Do I need to stay within a certain network of doctors and hospitals? Will I need to get referrals to see specialists? Are the providers I can see conveniently located?
    4. Drug coverage: Is prescription drug coverage included in the Medicare Advantage plan, or will I need to purchase a separate Part D policy to cover my medications?
    5. Additional supplemental benefits: Are additional services such as dental, vision, and hearing included?
    6. Out-of-pocket limit: Is there a yearly limit on out-of-pocket costs? Can I purchase supplemental coverage that will limit my out-of-pocket costs?

Contact your State Health Insurance Assistance Program (SHIP) for help evaluating your Medicare coverage: 1-800-224-6330 (Arkansas SHIP).

Call 1-800-MEDICARE if you would like to change your current coverage.

If you believe that you have experienced Medicare fraud, abuse, or errors, contact the Arkansas Senior Medicare Patrol: 1-866-726-2916.

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