Older adults have multiple options for health care coverage, including original Medicare, Medicare Advantage, Medigap plans, and prescription drug plans. It’s no wonder people are often confused when they first enroll in or decide to change their Medicare plan. The two main categories of this kind of health insurance are original Medicare and Medicare Advantage. Choosing between the two can be confusing and overwhelming. We will sort out the differences and similarities so you can compare original Medicare and Medicare Advantage and make the right choice for you.
What is original Medicare?
Original Medicare is a health insurance plan for older adults and those with certain disabilities. The federal government administers original Medicare, which includes Medicare Parts A (hospital insurance) and B (medical insurance). Parts A and B do not cover the full cost of health care, so most people purchase a Medigap (Medicare supplement) plan from a private insurance company to cover what Medicare doesn’t. Under original Medicare, you must also purchase Part D for prescription drug coverage.
What is Medicare Advantage?
Medicare Advantage (Medicare Part C) plans are health insurance plans offered by private insurance companies approved by Medicare. Medicare pays these companies to cover your care. Since many different companies offer Medicare Advantage plans, there are several types. Most people pay one premium to cover everything, though you still must pay your Part B premium. Most plans cover prescription drugs and other services not covered by original Medicare, such as vision and dental.
Similarities between original Medicare and Medicare Advantage
There are many similarities between original Medicare and Medicare Advantage plans.
Eligibility for Medicare and Medicare Advantage
Both original Medicare and Medicare Advantage plans are for people 65 and over. People under 65 with end-stage renal disease or receiving disability benefits for 24 months can also qualify.
Services covered by original Medicare and Medicare Advantage
Both original Medicare and Medicare Advantage plans cover:
- Inpatient hospital care.
- Skilled nursing care.
- Hospice and home health care.
- Medically necessary services.
- Preventative health care.
- Durable medical equipment.
- Ambulance services.
- Mental health services.
- Vaccines.
Services not covered by either Medicare or Medicare Advantage
Neither original Medicare nor Medicare Advantage (Medicare Part C) plans cover:
- Assisted living.
- Long-term care in a nursing home (as opposed to short-term rehabilitation in a skilled nursing facility, which may be covered under certain circumstances).
- Custodial care (personal care). Some Medicare Advantage plans cover limited custodial services such as cooking, shopping, bathing, dressing, transportation, and companionship if you meet specific criteria. In general, though, neither plan will cover custodial care.
- Travel health insurance. Both plans generally do not cover health care abroad. You may be able to purchase a Medigap plan that covers emergency services outside the U.S. Some Medicare Advantage plans offer supplemental coverage for overseas travel.
Enrollment periods
Original Medicare and Medicare Advantage have the same initial enrollment period, which spans from three months before to three months after your 65th birthday month. Both also have the same annual open enrollment period from October 15 to December 7, during which you can change your plan. Medicare Advantage enrollees also have an additional open enrollment period from January 1 to March 31.
When you first sign up for a Medicare Advantage plan, you have one year to decide whether to keep it or change to original Medicare with a Medigap plan. If you wait longer than one year and decide to change, you could go through underwriting for a Medigap plan and pay higher premiums or be denied coverage altogether.
Differences between original Medicare and Medicare Advantage plans
When comparing Medicare and Medicare Advantage, it’s critical to understand the differences because changing from Medicare Advantage back to original Medicare can be challenging.
Coverage
Here is how Medicare and Medicare Advantage differ in their coverage:
Original Medicare
Original Medicare covers hospital stays, medically necessary services and equipment, and preventative care.
Medicare Advantage (Medicare Part C)
Medicare Advantage plans are required to cover the same health services that original Medicare covers, but some Medicare Advantage plans also offer services not authorized through original Medicare. These might include:
- Dental.
- Vision.
- Hearing.
- Home-delivered meals under certain conditions.
- Home care.
- Home modifications.
Premiums
Medicare and Medicare Advantage also differ in the premiums that you may pay.
Original Medicare with Medigap and Part D plans
Medicare Part A, hospital insurance, is free for most older adults. Part B, which covers medical services and preventative care, is projected to have a monthly premium of $185.00 in 2025. If you opt for a Medigap and a Part D plan, you must also pay for them. Part D plans are generally affordable, averaging about $31.50 a month. Medigap plans, costs, and deductibles will vary widely depending on which plan you choose and what plans are available where you live. Medigap plan premiums tend to increase each year.
Between your Medigap and Part D plan, you could pay a couple of hundred up to several hundred dollars a month. Medicare has a site where you can enter your zip code to compare plans in your area.
Medicare Advantage (Medicare Part C)
Cost is an attractive characteristic of Medicare Advantage plans. Some plans have $0 premiums (other than Part B premiums). Remember, though, that there are still copays and deductibles to consider, which vary depending on the plan. While Medicare Advantage policyholders may enjoy $0 premiums, they may face larger copayments than those with original Medicare if certain health events occur.
Health care providers
Some people want the ability to remain with their current doctors or the freedom to see physicians in different states, especially if, for example, they live in one area of the country during the warm months and another in the cooler months. Medicare and Medicare Advantage plans have different rules about the networks of health care providers they work with. See how they differ here:
Original Medicare
Under original Medicare, you can go to any health care provider in the country that accepts Medicare. Under most circumstances, you won’t need a referral to see a specialist.
Medicare Advantage plans
Medicare Advantage plans may ask you to pay more for certain services or require you to take extra steps (pre-authorization or referrals) before they will pay for your care. Your health care coverage differs depending on whether you have an HMO, a PPO, or another type of plan, but in general, these are the defining characteristics of a Medicare Advantage plan:
- You must get your health care through a network of providers. Going outside the defined network will cost more or may not be covered at all.
- If you have an HMO, you may need a referral to see a specialist. You do not need a referral with a PPO, but if you go outside the PPO network of providers, you could pay more.
Other considerations for Medicare Advantage plans
There are a few other aspects of Medicare Advantage plans to remember when deciding between original Medicare or Medicare Advantage.
Oversight of Medicare Advantage
Medicare Advantage plans have been criticized for fraudulent billing practices. Medicare pays Medicare Advantage insurance companies a flat fee per enrollee, but they can overcharge Medicare by billing for a more expensive medical service or diagnosis code than the patient’s health condition warranted. Due to these and other fraudulent practices, Medicare Advantage plans will have changes for 2025. According to Forbes, “Reduced payments to Medicare Advantage sponsors are likely to cause changes in the plans in 2025, such as higher premiums, copayments, and deductibles as well as reduced coverage.”
Medicare vs. Medicare Advantage
There is no one right choice for everyone when deciding between original Medicare and a Medicare Advantage plan. Some people may become frustrated with understanding the differences, which can lead to rash decisions that may not be in their best interest. Take time to compare original Medicare and Medicare Advantage to make the right choice. With the correct information, you can select the plan that best meets your health care needs.
