Is Original Medicare and Medicare Advantage the Same?

The short answer is no. Original Medicare is a government-run entity that consists of two parts – hospital insurance, Part A, and medical insurance, Part B. All the rest of Medicare – Part C, (Medicare Advantage Plans), Part D (prescription drug plans), and Medicare Supplement or Medigap policies – are offered by private insurance carriers.

What Are the Differences?

The chief difference is that Medicare Advantage Plans, being offered by private companies, have more flexibility than Original Medicare. Each year, they bid a set amount per beneficiary, which is related to the average cost of caring for a Medicare recipient. If they can operate below the bid cost, they can use the difference to offer additional benefits, such as vision, hearing, and dental services, full or partial refunds of the Part B premium. Some plans do well enough from Federal money that they do not need to charge a premium.

What About Providers?

With Original Medicare, you can use any doctor or hospital that accepts Medicare, but this is not always the case with a Medicare Advantage (Part C) Plan. Most Medicare Advantage Plans are organized around networks of hospitals and doctors that they have contracted with to provide services to their beneficiaries. Some of these are organized on the Health Maintenance Organization (HMO) model – you can only see providers on their network – and some are organized as Preferred Provider Organizations (PPOs) – you can see any provider but have to pay an additional amount to use a provider that is not “preferred.” If choice is important to you, it is important that you know which model each plan you are considering follows.

What About Benefits?

By law, Medicare Advantage Part C Plans have to provide all the benefits and services that Original Medicare provides, plus the additional benefits they have specified in their plans. If they do not have providers on their network that can provide the needed services, they must find a provider for you.

Do keep in mind that benefits may change from year to year.

To learn more about how Medicare Advantage Part C Plans compare with Original Medicare, reach out to Dale Frank Financial today!

*Disclosure: Do keep in mind that Dale Frank Financial offers insurance products, but is not affiliated with Medicare or the U.S. government.