Choosing Between Original Medicare and Medicare Advantage

How to Weigh the Pros and Cons of Your Medicare Options

Balancing Health Care Costs Original Medicare Medicare Advantage
How do you weigh the benefits of Original Medicare vs. a Medicare Advantage plan?. Chimney Red/Photodisc/Getty Images

You have a choice when you sign up for Medicare. You can sign up for Original Medicare (Part A and Part B) or you could choose a Medicare Advantage plan. Everyone's needs will be different so you must think carefully about what will work best for you. The best way to make a choice is to compare these Medicare options head on.

Original Medicare

Access: You have broad nationwide access to Medicare providers in all specialties. This may be especially important to consider if you live in an area where there is a doctor shortage. In that case, you would likely want access to as many doctors as possible.

Convenience: Your premiums can be withdrawn directly from your Social Security check each month once you start collecting benefits. You will not need to worry about missing payments or losing your coverage for lack of payment.

Coverage: Original Medicare is the same for everyone. There is no picking or choosing your coverage. If you want prescription drug coverage, you will have to enroll in a Part D plan

Monthly Premiums: Original Medicare is generally less expensive than a Medicare Advantage plan. You pay monthly premiums for Part B every month. Most Americans get Part A premiums for free unless they have not worked more than 40 quarters (10 years) of Medicare-taxed employment.  

Out of Pocket Limits: There is no limit to how much you could pay for Original Medicare out of pocket. This could quickly get expensive if you require a lot of healthcare services.

Savings: If you have limited income and assets, you may be eligible to participate in one of the Medicare Savings Plans to keep costs down. Specifically, you can save on coinsurance, copayments, deductibles and premiums for Part A, Part B, and Part D.

Supplemental Insurance: If you do not have a low income, you can still find ways to keep costs in check. You can add a supplemental MediGap plan to help pay for costs that Original Medicare leaves on the table, costs like coinsurance, copayments, and deductibles for Part A and Part B.

Medicare Advantage

Access: You have a narrow network of providers to choose from in the Medicare Advantage network. If you are in an area where there is a doctor shortage, this could potentially limit your access to health care.

Convenience: You can choose a Medicare Advantage plan which includes Part D drug coverage, an MA-PD plan. In this case, all your health coverage will be encompassed in a single plan.

Coverage: With Medicare Advantage, you can pick and choose your coverage. Original Medicare does not cover everything. Some Medicare Advantage plans may offer additional health services that you may need.

Monthly Premiums: You still pay Part B premiums to the government but you will also pay a monthly premium for the benefit of a Medicare Advantage plan. This is where Medicare Advantage can become more expensive. Some Medicare Advantage plans, however, may be premium free.

Out of Pocket Limits: The federal government sets a limit on how much you can spend on out of pocket costs for Medicare Advantage plans each year but only for services that are covered by Part A and Part B. The maximum limit in 2015 was $6,700 but the average limit set by private insurers was $3,000 - $4,000.

Savings Plan: You are not eligible for a Medicare Savings Plan if you are on Medicare Advantage.

Supplemental Insurance: You are not eligible for a Medigap plan if you are on Medicare Advantage.

Changing Plans

You are not trapped in your decision. You can even change between Original Medicare and Medicare Advantage plans during designated enrollment periods.

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