A clear understanding of the pros and cons of Medicare vs. Medicare Advantage is key to making the right decision.
Exploring the world of health insurance can be confusing in and of itself. When you add in all the differences between Medicare vs. Medicare Advantage, it’s easy to be a little baffled.
At Health Associates of Tampa, we help patients who are at this crossroads and offer advice to help them find the best healthcare plan for them.
In this post, we dive into the differences, explain the four parts of Medicare, compare Medicare vs. Medicare Advantage coverage, outline the enrollment process, and do a cost comparison. This valuable information can help guide you in your decision and help you choose the right plan.
The Pros and Cons of Medicare vs. Medicare Advantage: An Overview
Medicare is a federal health insurance program for people 65 and over, as well as for some younger individuals with disabilities. It has been a safety net for America’s elderly and at-risk younger population for decades.
On July 30, 1965, President Lyndon Johnson traveled to the Truman Library in Independence, Missouri, to sign Medicare into law. This drew attention to the 20 years it had taken Congress to enact government health insurance for senior citizens after Harry Truman had proposed it in 1945. In fact, Medicare’s history dates back even further. Congress held its first hearings on government health insurance in 1916.
Today, Original Medicare is made up of several parts: Part A (Hospital Insurance, Part B (Medical Insurance), and Part D (prescription drug coverage). Medicare Advantage, also known as Part C, is an alternative to Original Medicare, offered by private insurance companies approved by Medicare.
At Health Associates of Tampa, we are finding that Medicare Advantage plans are becoming increasingly popular among our patients. Why? Because when they weigh the pros and cons of Medicare vs. Medicare Advantage plans offered by companies like CarePlus Devoted, Humana Gold, United Healthcare, and Wellcare, Medicare Advantage often offers lower premiums and more benefits. In addition, these plans allow patients to gain greater access to more provider networks and services and give them more options than traditional Medicare does.
Understanding the ABCs of Medicare vs. Medicare Advantage
Whether you opt for all or one, it’s important to know what each part of Medicare covers.
Medicare Part A covers hospital stays, care in a skilled nursing facility, hospice care, and some home health care. Most patients don’t pay a premium for Part A if they or their spouse paid Medicare taxes while working.
Medicare Part B covers certain doctors’ services, outpatient care, medical supplies, and preventive services. Unlike Part A, Park B comes with a monthly premium that varies based on income.
Medicare Part C, also known as Medicare Advantage, includes all benefits and services covered under Part A and Part B, with added benefits such as vision, hearing, dental, and health/wellness programs, depending upon which insurer you choose.
Medicare Part D is a voluntary outpatient prescription drug benefit. Enrollees can choose to participate in either a stand-alone prescription drug plan (PDP) to supplement traditional Medicare or a Medicare Advantage plan, mainly HMOs and PPOs, that provides all Medicare-covered benefits, including prescription drugs (MA-PD).
In 2023, more than 50 million of the 65 million people covered by Medicare are enrolled in Part D plans. Even if you don’t need prescription drugs today, consider enrolling in Part D or choosing a plan that includes it because you can pay higher premiums for joining later on.
The Pros and Cons of Medicare Advantage Plans vs. Traditional Medicare.
Original, or traditional Medicare offers nationwide coverage and does not require referrals for specialists, making it a flexible option for those who like to travel or for our Florida snowbirds living in multiple states.
However, it doesn’t cover everything. Patients still have out-of-pocket costs, including deductibles and coinsurance. There’s no out-of-pocket maximum, meaning in a year with serious health issues, costs could pile up.
When You Look at the Pros and Cons of Medicare vs. Medicare Advantage, the Pros for Medicare Advantage Far Outweigh the Cons
Medicare Advantage plans offer extra benefits, which is a significant advantage (thus the name) over traditional Medicare.
These types of plans also have an out-of-pocket maximum, which can provide financial protection and relief should you face a serious illness or disease. With that said, they often have network restrictions that require you to choose healthcare providers that participate in the plan’s network. They often require a referral to see a specialist, which is common on private insurers as well.
Subsequently, it’s also important to note that with Medicare Part D, there is an important factor to keep in mind. If your plan doesn’t cover prescription drugs, you should strongly consider purchasing a Medicare Part D policy. Even if you don’t need prescription drugs today, enrolling in Part D is important because you can be penalized for joining later on.
It Pays to Compare Medicare vs. Medicare Advantage for the Coverage Each Offers.
In terms of coverage, Medicare Advantage plans must cover all the services that Original Medicare covers except hospice care, which Original Medicare covers while you’re in a Medicare Advantage Plan.
The main difference is the additional services offered by Medicare vs. Medicare Advantage plans, such as dental and vision care, which are not covered by traditional Medicare.
What is the Enrollment Process Like for Medicare vs. Medicare Advantage?
Enrolling in Medicare vs. Medicare Advantage can be quite involved. Initial enrollment for Medicare coincides with your 65th birthday, including a 7-month period beginning 3 months before the month you turn 65.
For Medicare Advantage, you can enroll during the Annual Election Period (AEP) from October 15 to December 7 each year. There’s also the Medicare Advantage Open Enrollment Period from January 1 to March 31 if you already have a Medicare Advantage plan and want to switch to another.
Cost is an Important Factor to Consider When Choosing Between Traditional Medicare vs. Medicare Advantage.
With traditional Medicare vs. Medicare Advantage, there’s a Part A deductible and a monthly premium for Part B. Without supplemental coverage, there’s also no limit to what you’ll pay out-of-pocket. If you face a serious medical situation, it could jeopardize your retirement nest egg.
Medicare Advantage plans usually have a monthly premium in addition to the Part B premium, but the trade-off is the out-of-pocket spending cap. Some plans even offer $0 premiums.
It’s important to review the copays and coinsurance costs, as these can vary widely from plan to plan. But again, when you compare the pros and cons of Medicare vs. Medicare Advantage, the pros for Medicare Advantage win most of the time depending upon the carrier.
Medicare vs. Medicare Advantage: How Do You Know Which is Right for You?
Selecting the right plan demands careful consideration of your personal healthcare needs, financial situation, and preferences. If you are comfortable with the lack of an out-of-pocket cap, traditional Medicare with the addition of a Medicare supplement insurance policy (Medigap) and Part D for drug coverage might be the way to go. Medigap is extra insurance you can buy from a private health insurance company to help pay your share of out-of-pocket costs in Original Medicare.
But if you want a more predictable cost structure with extra benefits, Medicare Advantage is the clear choice. It’s essential to thoroughly review the plan’s network to ensure your preferred healthcare providers and hospitals are included in your plan.
There is No One-Size-Fits-All Answer in the Medicare vs. Medicare Advantage Debate
We encourage every patient to weigh the pros and cons of Medicare vs. Medicare Advantage. Take into account your own personal circumstances, and choose the plan that aligns best with your health and what you can afford.
At Health Associates of Tampa, we’re happy to answer any questions you may have and offer our advice based upon years of Medicare claims filing experience. We can play a part in guiding you toward the decision that will ensure peace of mind and quality healthcare coverage. After all, your well-being is most important to us.
Please remember that Medicare vs. Medicare Advantage is not just about the immediate benefits, but also about offering healthcare security in the long-term. Whichever plan you choose, be sure to review your plan annually, as needs and offerings may change.
Our advice? Stay informed, stay covered, and make sure good health is your number-one priority like we do. Contact us if you want to schedule a free health consultation.