Many of you are familiar with Medicare and that once you turn 65 you can get certain healthcare benefits from the federal government, known as Original Medicare. But you might be less familiar with Medicare Advantage (MA) plans or Medicare Supplement (MedSupp, Medigap) insurance plans, options used to replace or supplement Original Medicare.
To make the most of Medicare, you need to understand your options and how they work. We’d like to provide some information to help explain how Medicare works and all the things it can do for you. We will define each option and compare the key differences between them to help you make important choices about your healthcare.
What is Original Medicare and what are its advantages and disadvantages?
Original Medicare (Parts A and B) is from the federal government, and it’s the most basic form of Medicare. Part A covers hospital costs. Part B covers outpatient medical services, including doctor visits.
Advantages of Original Medicare include:
- You can go to any doctor or facility that accepts Medicare
- You do not need a referral to see a specialist
Disadvantages of Original Medicare include:
- You pay 20 percent of the cost, or 20 percent coinsurance, for common health services such office visits or outpatient surgery
- Covers medical and hospital costs only, and not supplemental benefits such as dental, vision and hearing.
- Does not cover prescription drug costs, so you must sign up for a standalone prescription drug plan (Part D)
- No out-of-pocket limit
- Does not cover emergency care abroad
- Must meet 3-day hospital stay before entering a skilled nurturing facility (SNF)
What are Medicare Supplement (MedSupp, Medigap) insurance plans and what are their advantages and disadvantages?
MedSupp insurance plans work alongside your Original Medicare coverage. This means that you are still enrolled in Original Medicare as your primary insurance, and your MedSupp plan acts as your secondary insurance. These plans are provided by private companies and cover some or all of what Original Medicare doesn’t pay. Medigap policies are labeled Plans A, B, C, D, F, G, K, L, M and N and their coverage is standardized, but their costs are not.
Advantages of MedSupp plans include:
- You can go to any doctor or facility that accepts Medicare
- No referrals needed to see a specialist
- Coverage of remaining Medicare costs such as coinsurance, copayments, deductibles
- May cover the cost of emergency care abroad with a lifetime limit
Disadvantages of MedSupp plans include:
- Does not include prescription drug coverage, so you must sign up for a standalone prescription drug plan (Part D)
- You must pay your annual Part B premium (set by Medicare) plus an additional premium for your MedSupp plan
- Higher premiums than Medicare Advantage plans in many cases
- Premiums increase annually as you age
What are Medicare Advantage plans and what are their advantages and disadvantages?
Medicare Advantage plans are offered by private, Medicare-approved insurance companies. They must include all of your Medicare Part A and Part B benefits, and they can offer additional benefits not included in Original Medicare including dental, vision and hearing along with other extras such as acupuncture, fitness programs, OTC allowance and transportation. To enroll in an MA plan, you must sign up for Medicare Part A and Part B to be eligible, and you cannot enroll in both an MA and a MedSupp plan at the same time.
Advantages of MA plans include:
- Most MA plans use copays instead of coinsurance for common health services such office visits or outpatient surgery, meaning you pay a fixed, lower out-of-pocket cost
- Part D prescription coverage is included with most plans
- Covers supplemental benefits such as dental, vision and hearing in additional to medical and hospital costs (Note coverage varies by plan)
- Annual out-of-pocket maximum meaning your plan pays the full cost of your care after you reach that limit each year (Note this amount varies by plan)
- Provider networks offer the benefit of coordinated care
- Some MA plans (including Aspire Health Plan) cover emergency care and urgent care across the U.S. or its territories
Disadvantages of MA plans include:
- A fixed networks of doctors and hospitals meaning you will have rules about whether or not you can get care outside your network, and you’ll pay more for out-of-network care
- Some plans require a referral to see a specialist
- You must pay your annual Part B premium (set by Medicare) plus an additional premium for the MA plan
Comparing the differences between Original Medicare, Medicare Supplement and Medicare Advantage
Here’s a handy chart to let you compare the key differences between Original Medicare, Medicare Supplement, and Medicare Advantage plans.
|Original Medicare||Medicare Supplement||Medicare Advantage|
|Primary coverage||Covers up to 80% of eligible hospital and medical expenses.||Covers up to 20% of covered Original Medicare expenses (giving consumer 100% coverage on those eligible expenses).||Covers everything Original Medicare does, plus much more. Often includes prescription drug coverage.|
|Out-of-pocket limit||There’s no limit on the amount you may have to spend.||Some plans have limits on your out-of-pocket costs.||All plans have limits on your out-of-pocket costs.|
|Choice of doctors and hospitals||Any doctor or hospital that accepts Medicare.||Any doctor or hospital that accepts Medicare.||For HMO plans, you must see a provider within the plan network. Some HMO plans (called POS plans) allow you to go out of network.|
|Part D prescription drug coverage||NOT included.||NOT included.||INCLUDED with most plans.|
|Number of cards you carry for your insurance||TWO |
Medicare card and Part D Prescription Drug card.
Medicare card, Medicare Supplement card, and Part D Prescription Drug card.
Medicare Advantage card.
|Optional enhancements like dental, vision and hearing||NOT included.||AVAILABLE with some plans.||AVAILABLE with some plans.|
Aspire Health Plan offers Monterey County’s only Medicare Advantage plan. We offer three plan options – all with prescription drug coverage – with a plan network of over 700 doctors, many other healthcare providers, and all four Monterey County hospitals. If you have any questions or would like more questions, call (866) 798-1530, TTY users call 711, to speak with a Health Plan Advisor.
Turning 65 soon? Get all of the information you need when you request a Welcome to Medicare kit.