Original Medicare vs. Medicare Advantage: What’s the Difference?
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When it comes to health care coverage, most people have heard of Medicare. But what many don’t realize is that there are two different paths you can take: Original Medicare and Medicare Advantage.
While both offer valuable coverage, they differ in cost, provider choice, and benefits. Understanding these differences is key to choosing the option that best fits your health care needs.
Doctor and Hospital Choice
One of the biggest differences lies in provider access:
- Original Medicare: You can see any doctor or hospital in the U.S. that accepts Medicare—no network restrictions. Referrals to specialists are generally not required.
- Medicare Advantage: You must use providers within your plan’s network, and referrals for specialists may be required.
If provider flexibility is important to you, Original Medicare may offer more freedom.
Cost Comparison
Costs also vary depending on which option you choose:
Original Medicare
- Pays 80% of approved costs for Part B services (after deductible). You’re responsible for the remaining 20%.
- Requires a monthly Part B premium, plus an additional Part D premium if you want prescription drug coverage.
- Has no annual out-of-pocket limit unless you purchase supplemental coverage (such as Medigap).
- Medigap or employer coverage can help cover coinsurance and other costs.
Medicare Advantage
- Out-of-pocket costs depend on the specific plan and services received.
- Requires both the Part B premium and the plan’s own premium (though some plans cover part or all of the Part B premium).
- Usually includes Part D prescription coverage.
- Offers an annual out-of-pocket maximum, after which all Part A and B services are covered for the rest of the year.
- Medigap is not available or necessary.
Coverage Differences
While both options cover essential health services, there are some key differences:
- Original Medicare covers medically necessary services (Part A and Part B) but does not include extras like vision or dental.
- Medicare Advantage must cover everything Original Medicare does, but many plans also offer additional benefits, such as eye exams, dental services, and wellness programs.
- Prescription drug coverage (Part D) is usually bundled into Medicare Advantage, while those on Original Medicare must purchase a separate Part D plan.
- Prior approval is rarely required with Original Medicare, but Medicare Advantage often requires pre-authorization for services or supplies.
- Foreign travel: Neither option typically covers care outside the U.S., but certain Medigap policies or Advantage plans may include emergency foreign travel coverage.
Key Takeaway
The choice between Original Medicare and Medicare Advantage depends on your personal needs and priorities:
- Do you want freedom to see any doctor, or are you comfortable staying within a network?
- Would you prefer lower upfront costs, or peace of mind with an annual out-of-pocket cap?
- Are added benefits like dental and vision coverage important to you?
Both options have advantages—it’s about finding the right balance of cost, coverage, and flexibility for your situation.
Next Steps
If you’re weighing your options, don’t go it alone. Talk with HR or connect with an insurance professional who can help walk you through the details and make the best choice for your health and budget.
Price & Ramey is committed to helping you, your family, and your business. For additional risk management guidance, contact us today.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Employers should consult with legal counsel or safety professionals for specific compliance recommendations.