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Medicare Advantage Plans vs Original Medicare


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With the Medicare Modernization Act of 2003 Medicare Advantage plans were officially authorized. Since then, the plans have grown in popularity, with approximately a third of all Medicare enrollees choosing Medicare Advantage plans in 2018, according to the Centers for Medicare and Medicaid Services.

If you’re considering your Medicare options, here’s what you should know about how Medicare Advantage plans compare to Original Medicare (Part A and Part B).

Medicare Advantage Plans vs Original Medicare: Coverage

Medicare Advantage plans are an alternative way to get your Medicare benefits from a private insurance company. By law, they must cover, at a minimum, everything that’s covered by Part A and Part B, with the exception of hospice care, which is still covered by Part A.

In addition, most, though not all, Medicare Advantage plans include Part D coverage for prescription drugs, so that all your Medicare benefits are rolled into one plan. Original Medicare generally doesn’t cover most prescription drugs. If you want Medicare Part D Prescription Drug Coverage with Original Medicare, you generally need to enroll in a stand-alone Medicare Part D Prescription Drug Plan.

Medicare Advantage Plans vs Original Medicare: Extra Benefits

Medicare Advantage plans are offered by private insurance companies, which means that, once the minimum benefits required by law are met, each individual company can set its own benefits package, premiums, and cost-sharing structure. This is why Medicare Advantage plan benefits differ so much from company to company—and even plan to plan.

For example, many Medicare Advantage plans include benefits for services excluded by Original Medicare (Part A and Part B), such as routine dental care. Your Medicare Advantage plan may pay for annual cleanings and dental exams, and cover part of the costs for treatments such as extractions, fillings, and root canals.

You may also find Medicare Advantage plans that cover routine vision exams, including some or all of the costs of contact lenses or prescription eyewear. Some Medicare Advantage plans also pay for hearing exams and certain costs associated with hearing aids.

The Silver Sneakers program is another attractive benefit available with some Medicare Advantage plans. Silver Sneakers is a fitness program for seniors that lets you take exercise classes and use participating gym facilities free of charge.

If your Medicare Advantage plan includes Part D prescription drug coverage, you may also get discounts on certain over-the-counter medications and devices to help offset your out-of-pocket costs.

Some Medicare Advantage plans also offer a nurse hotline or similar phone advice service. When you call in, you can speak to a medical professional for advice about your symptoms and help deciding whether or not you need to seek medical care.

Medicare Advantage Plans vs Original Medicare: Costs

Each Medicare Advantage plan has different premiums, cost-sharing structures, and extra benefits options, and your out-of-pocket costs depend on how much medical care you use in a particular year. That said, typical costs with Medicare Advantage plans include:

  • Monthly premiums. You must continue to pay your Part B premium when you’re enrolled in a Medicare Advantage plan, and some plans have an additional monthly premium you pay to your insurance company. You may be able to buy a “zero premium” plan, which means you pay nothing each month in addition to your Part B premium.
  • Deductibles. Some, though not all, Medicare Advantage plans have an annual deductible before benefits kick in. However, there is usually just one deductible as opposed to separate deductibles for Part A and Part B with Original Medicare.
  • Cost-sharing. Medicare Advantage plans may use copayments instead of coinsurance amounts in their cost-sharing structure. For example, you may pay a flat $10 for primary care visits, $25 for specialist care, and $50 for emergency room visits compared to a 20% coinsurance amount for most covered services with Original Medicare.

There is one significant advantage of Medicare Advantage plans over Original Medicare when it comes to out-of-pocket costs, however: All Medicare Advantage plans have an annual maximum out-of-pocket limit, which means that you pay nothing for your covered medical services once you reach that cap. There is no such cap on expenses with Original Medicare so one significant health episode can leave you with thousands of dollars in out-of-pocket costs.

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