Medicare vs Medicare Advantage: The Basic Difference

These are two ways to receive Medicare benefits. Each has trade-offs.

Step by step

1. Learn the parts.
2. Compare networks.
3. Check drug coverage.
4. Compare costs.
5. Ask a counselor.

What to expect

Expect clear definitions, a side-by-side table and questions about doctors, drugs, costs and travel coverage.

Mistakes to avoid

Do not choose a plan only because of a low premium. Look at total yearly cost and whether your doctors and medicines are covered. Avoid sharing your Medicare number with callers.

A good next step

Meet with a free counselor from your State Health Insurance Assistance Program.

A worked example

A new enrollee reads an AI table, makes a list of doctors and medicines, and takes it to a free counselor to compare real plans.

The big difference in one picture

• Original Medicare is run by the federal government. It has Part A (hospital) and Part B (medical). You can generally see any doctor or hospital that accepts Medicare.
• Medicare Advantage (Part C) is offered by private insurers and replaces Original Medicare. It usually has a network of doctors, may bundle drug coverage and often includes extras.
• Many people who choose Original Medicare add a Part D drug plan and sometimes a Medigap policy.

Questions to ask yourself, step by step

1. List your doctors and hospitals. Check whether each one accepts the plans you are considering.
2. List your medications. Look up whether they are covered and at what cost.
3. Add up the costs. Compare monthly premiums, deductibles, copays and the yearly out-of-pocket limit.
4. Think about travel. Some plans cover less outside your area.
5. Ask about extras. Dental, vision and hearing coverage vary by plan.

Using AI without getting misled

• Ask an assistant to explain terms like premium, deductible and network in plain language.
• Ask it to turn a plan brochure into a table of costs. Check the numbers against the original.
• Use the official Medicare website to compare plans in your area, and a free local counseling program (SHIP) for one-to-one help.
• Be wary of callers and ads that claim you must switch plans right now.

Mistakes to avoid

• Choosing only on the lowest premium.
• Not checking the drug list each year.
• Missing your enrollment window, which can mean penalties or waiting.

Original Medicare in more detail

• Part A covers inpatient hospital stays, skilled nursing facility care after a qualifying hospital stay, hospice and some home health care. Many people pay no premium for Part A if they or a spouse paid Medicare taxes long enough.
• Part B covers doctor visits, outpatient care, preventive services and some medical equipment. It has a monthly premium, a yearly deductible and usually a 20 percent share of approved costs with no yearly cap on that share.
• Part D is optional drug coverage from a private plan. Each plan has its own list of covered drugs, called a formulary, and its own costs.
• Medigap is optional private insurance that helps pay some of the costs Original Medicare leaves, such as the 20 percent share. It cannot be used together with a Medicare Advantage plan.

Medicare Advantage in more detail

• The plan must cover what Original Medicare covers, though it may do so through a network of doctors and with different costs.
• Many plans use HMO or PPO rules. An HMO usually needs referrals and in-network doctors. A PPO allows out-of-network care at a higher price.
• Plans have a yearly limit on what you pay out of pocket for covered services, which Original Medicare alone does not have.
• Many plans include drug coverage and extras like dental, vision or hearing, but the extras vary widely and may have caps.
• Plans can change their networks, drug lists and costs every year, so reviewing your plan each fall matters.

Two people, two different choices

1. Maria, 66, healthy, takes two generic drugs. She likes low monthly cost and has no regular specialists. An Advantage plan with a $0 premium and her drugs on the list might suit her. She still checks that her primary doctor is in the network.
2. Frank, 72, sees three specialists in different cities and travels for months. He wants to see any doctor who takes Medicare. Original Medicare with a Part D plan and a Medigap policy might fit, though it costs more each month.
3. The lesson. There is no best choice for everyone. The right plan depends on your doctors, drugs, health, budget and travel.

Questions to bring to a counselor

• Are all my doctors and my hospital in this plan's network?
• Are all my medicines on the plan's drug list, and what tier are they?
• What is the most I could pay in a bad year?
• Does the plan require referrals or prior approval?
• What happens if I travel or spend part of the year in another state?
• If I choose Medigap, when can I buy it without health questions?

A prompt you can copy

Common questions

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