Medicare Advantage vs Original Medicare: Key Differences

Original Medicare and Medicare Advantage are the two main ways to get your Medicare health coverage, and you pick one or the other. With Original Medicare, you can see any doctor or hospital that takes Medicare, anywhere in the U.S. With a Medicare Advantage plan, a private company runs your coverage, and in many cases you can only use doctors in the plan's network. Neither is better for everyone. The right choice depends on your doctors, your health needs, your budget and where you live.

This guide walks through the differences in plain terms, explains where Medigap fits in, and shows when you can switch. For help with your own situation, free counseling is available (details near the end).

How each option works

Medicare.gov's overview of your coverage options describes the split this way.

Original Medicare includes Part A (Hospital Insurance) and Part B (Medical Insurance). You pay for services as you get them. Medicare pays part of the cost and you pay your share. You can add a separate Part D drug plan, plus supplemental coverage to help with your share of costs.

Medicare Advantage (Part C) is an alternative offered by private companies approved by Medicare. It includes Part A and Part B, and most plans also include Part D drug coverage. Many plans offer extra benefits that Original Medicare doesn't cover, like vision, hearing and dental. You must have both Part A and Part B to join one.

Side-by-side comparison

Question	Original Medicare	Medicare Advantage
Who runs it?	The federal government	A private company approved by Medicare
Choice of doctors	Any doctor or hospital that takes Medicare	Often limited to the plan's network
Drug coverage	Add a separate Part D plan if you want it	Most plans include it
Extra benefits	Not included (vision, hearing and dental are generally not covered)	Most plans offer some
Help with your share of costs	Optional Medigap, retiree coverage or Medicaid	Plan sets its own costs and a yearly limit on medical costs

Doctors, networks and travel

This is often the deciding factor. A network is the group of doctors, hospitals and other providers that a plan has agreed to work with. According to Medicare.gov, your plan may not cover your services, or your costs could be higher, if you go outside the plan's network for non-emergency or non-urgent care.

Before joining any Advantage plan, ask each of your doctors, specialists and pharmacies whether they are in that specific plan's network for the coming year. If you spend part of the year in another state, check whether the plan covers you there. Original Medicare doesn't have this problem, as long as the provider accepts Medicare.

What you pay

In Original Medicare, you generally pay your Part B premium, plus deductibles and your share of each service. A supplement can help with those shares.

In a Medicare Advantage plan, you pay your Part B premium and possibly a plan premium on top of it. Medicare.gov's page on health plan costs explains that the plan, not Medicare, decides how much you pay for covered services. Plans set their premiums, deductibles and copayments each year, and what you pay the plan can only change once a year, on January 1.

Look at the whole picture, not just the premium. Ask about:

• The monthly premium
• Deductibles and copayments for the visits and tests you use most
• The plan's yearly limit on out-of-pocket costs for medical services
• Whether your prescriptions are on the plan's drug list
• Whether the extra benefits, such as dental or hearing, are ones you will really use

Where Medigap fits in

Medicare Supplement Insurance, called Medigap, is extra insurance you can buy from a private company. According to Medicare.gov's Medigap basics, it helps pay your share of out-of-pocket costs in Original Medicare, like copayments, coinsurance and deductibles. You can only buy Medigap if you have Original Medicare.

Medigap policies are standardized. Policies with the same letter offer the same basic benefits no matter which company sells them, so price is the only difference between them. Medigap premiums vary widely by company, plan and where you live, so compare plans with the same letter. Premiums typically increase each year, and you also keep paying your Part B premium.

Medicare's overview notes that Medigap policies generally don't cover long-term care, vision, dental, hearing aids, private-duty nursing or prescription drugs. So if you choose Original Medicare plus Medigap and want drug coverage, you would add a separate Part D plan.

The Medigap timing trap

You get a 6 month Medigap Open Enrollment period, which starts the first month you have Part B and are 65 or older. During this time, the company can't deny you coverage because of health problems. After it ends, you may not be able to buy a policy, or it may cost more. This window is a one-time event and doesn't repeat every year.

This matters if you are thinking of trying Medicare Advantage first. Switching back to Original Medicare later may be easy, but getting a Medigap policy afterward may not be. Ask a counselor about the rules in your state before you decide.

When you can switch

You can only join, switch or drop a Medicare Advantage plan at certain times, according to Medicare.gov's page on joining a plan. We cover these in more detail in our guide to Medicare enrollment periods. The main ones:

• Open Enrollment Period, October 15-December 7. You can switch from Original Medicare to Medicare Advantage, or back again, and join, drop or switch drug plans. The plan must get your request by December 7, and new coverage starts January 1 of the next year.
• Medicare Advantage Open Enrollment, January 1-March 31. This is only if you're already in a Medicare Advantage plan. You can switch to another Advantage plan or return to Original Medicare and add a drug plan.
• Special Enrollment Periods. These apply in certain life events, like moving to a new address, losing or changing your current coverage, or getting Medicaid or Extra Help.
• First three months. If you joined an Advantage plan when you first became eligible, you can change plans or go back to Original Medicare within the first 3 months you have Parts A and B.

The fall window opens soon. Plan details for next year can change, so read the notice your current plan sends before you decide whether to stay.

Get free, unbiased help

A State Health Insurance Assistance Program (SHIP) offers free one-on-one counseling. SHIPs aren't connected to any insurance company or health plan, which makes them a good place to check your thinking. You can also call 1-800-MEDICARE (1-800-633-4227), or TTY users can call 1-877-486-2048.

If you are comparing costs, our guide on cutting prescription drug costs on Medicare can help with the drug side.

A practical checklist

1. Write down your doctors, specialists, hospitals and pharmacies.
2. List every prescription you take, with dose.
3. Use Medicare.gov/plan-compare to enter your drugs and see each plan's estimated yearly cost.
4. Call each doctor's office and ask whether they are in the plan's network for next year.
5. Check the plan's yearly out-of-pocket limit and what you'd pay for services you use often.
6. If you're considering Original Medicare with Medigap, compare same-letter plans from several companies.
7. Book a free SHIP appointment before you enroll.