Medicare or Medicare Advantage: Do You Know the Difference?

It’s Medicare Open Enrollment time again: October 15 through December 7, all seniors who have a Medicare health or prescription drug plan can make changes to those plans. Even if you’re happy with your current coverage, it’s worth taking a look at alternatives. You just might find something that’s a better fit for your budget or your healthcare needs.

While there are a host of factors to consider, one of the most important questions you can ask yourself is this: Will my needs be better met with Original Medicare or with a Medicare Advantage Plan?

It’s easy to confuse the two programs, but they differ in critical ways. Here are some points to consider.

1. Original Medicare is provided directly through Medicare and includes Part A (hospital insurance) and Part B (medical insurance). Most people pay nothing for Part A; there is usually a monthly premium for Part B.
2. Medicare Advantage Plans (also called Part C) include both Part A and Part B coverage, but that coverage is provided through private insurance companies approved by Medicare. You still have to pay your Part B premium to Medicare, and the insurance company may charge an additional monthly premium, too. In addition, the plans generally charge co-payments and co-insurance fees for services. If your coverage is provided by Humana, SummaCare, Aetna or any other insurance company, you do NOT have original Medicare; you have a Medicare Advantage Plan.
3. Original Medicare allows you to get medical services through any doctor, hospital or other provider that accepts Medicare. Your coverage extends throughout the United States, regardless of where you lived when you originally signed up.
4. Most Medicare Advantage Plans act like HMOs. They restrict your choice and require you to use doctors, hospitals or other providers that are in your plan’s network. If you decide to go outside the network, you may have to pay more ― or even the entire cost ― of service.
5. While many Medicare Advantage Plans “sweeten the pot” by including prescription drug coverage and extra benefits like gym memberships and free taxi rides to doctors’ appointments, it’s important to consider this: Federal officials “have repeatedly criticized, and in many cases penalized, these types of plans for serious deficiencies, including the improper rejection of claims for medical services and unjustified limits on coverage of prescription drugs” (S. Finds Many Failures in Medicare Health Plans, The New York Times, October 12, 2014). In that same article, former Medicare official and insurance company consultant John K. Gorman is quoted as saying, “It’s unforgivable that so many Medicare Advantage plans are still struggling with basic compliance issues.”
6. Because original Medicare (Parts A and B) pays only about 80 percent of covered costs, many enrollees find it helpful to buy “Medigap,” or a Medicare Supplemental policy, through a private insurer to cover the remaining 20 percent. There is a monthly premium for this coverage, in addition to the Part B premium. Like original Medicare, this supplemental policy provides coverage throughout the U.S. from any provider who accepts Medicare. Part D coverage, for prescription costs, can also be purchased separately.

So how do you decide? Each person’s answer is different. But remember this:

If you currently have a Medicare Advantage Plan, and your favorite doctors, hospitals or care providers are NOT part of it, Open Enrollment is your chance to switch.

No matter what type of coverage you have, it can pay to shop around. A new plan may save you money, cover your drugs and let you go to the doctor, pharmacy or hospital you prefer. Now through December 7, you can use Medicare’s plan finder to see what other plans are offered in your area.

For more information, you can call 1-800-MEDICARE (1-800-633-4227), and say “Agent.” TTY users should call 1-877-486-2048. Help is available 24 hours a day, including weekends. You can also visit a local State Health Insurance Assistance Program (SHIP) counselor. SHIP counselors provide free, one-on-one, non-biased Medicare assistance. Get free personalized health insurance counseling by calling your SHIP offices. To get the phone number, visit Medicare.gov/contacts, or call 1-800-MEDICARE.