The Difference Between Medicare Advantage and Original Medicare | OpenMedicare
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The Difference Between Medicare Advantage and Original Medicare

Published April 5, 2023

When you reach 65 — the age to enroll in Medicare — your first decision is whether you want the federally run Original Medicare or Medicare Advantage provided by private insurance companies. Both cover your major medical needs, but differ in what they cover, how you receive the coverage, and how much you pay.

A shift in preferences is taking place, as Medicare Advantage has grown from 19% of enrollees in 2007 to 48% in 2022 — and will soon be the most popular way for older Americans to get their major medical coverage and care. The reason? Of those with Medicare Advantage plans, seven in 10 have integrated prescription drug coverage, and nearly all have access to some benefits that Original Medicare doesn’t offer.

So, is Medicare Advantage better than Medicare? Not necessarily so. Although Medicare Advantage and Medicare cover many of the same benefits, you should weigh your options and decide what works for your individual situation.

Key Differences

To understand the differences, you should understand how Medicare is structured. Medicare-related services are divided into parts:

  • Part A (Hospital Insurance) helps cover your inpatient care in hospitals, skilled nursing facilities, hospice facilities, and home health care.
  • Part B (Medical Insurance) helps cover services received from doctors and other providers, outpatient care, preventive services, home health care, and some equipment.
  • Part C (Medicare Advantage) is the private insurers’ alternative to Original Medicare’s Part A and Part B.
  • Part D (Prescription Drug Coverage) is optional private insurance that helps cover the cost of prescription medications.

So, what is the difference between Medicare and Medicare Advantage plans? Here are the key differences:

  • Original Medicare covers Part A and Part B. Medicare Advantage also covers Part A and Part B, but bundles various other health benefits — such as dental, vision, hearing, and fitness — under one umbrella plan.
  • Original Medicare is administered by the federal government, with government-set benefits and costs. Medicare Advantage is provided by private insurance companies that can change benefits, costs, and coverage each year.
  • Original Medicare doesn’t include prescription drug coverage, but it can be purchased separately as Part D. Medicare Advantage plans almost always include prescription drug coverage.
  • Original Medicare exposes you to open-ended out-of-pocket expenses, which you can minimize by purchasing an optional Supplement Insurance (Medigap) plan from private insurers. Medicare Advantage has a government-defined cap on out-of-pocket payments.
  • Original Medicare gives you access to virtually all doctors and providers nationwide without prior authorization. Medicare Advantage plans have networks that may require you to pay more to access out-of-network doctors, or not be covered at all. Some require referrals from your primary care physician.

Both programs will cover your major medical needs, but your choice will determine the costs and flexibility. You can opt for Original Medicare and add extra coverage and benefits with a Medigap and Part D plan, or you can opt for an all-in-one Medicare Advantage plan.

Let’s look closer at the differences between the two options.

Cost Differences between Medicare Advantage and Original Medicare

To understand the differences in costs, you must understand the various out-of-pocket expenses that Medicare coverage can entail. They include the following:

  • Premium: an amount you pay monthly for coverage, whether or not you use the services
  • Deductible: an amount you pay each year before Medicare starts to pay for covered services
  • Copayment or copay: a fixed amount you pay for a Medicare-covered service, such as $15 for a doctor's visit
  • Coinsurance: a percentage of the cost that you pay, such as 20% of all Part B Original Medicare services

With Original Medicare, the government sets the premiums, deductibles, and coinsurance amounts for Part A and Part B. These are the possible costs in 2023.

Part A: Original Medicare Costs

You will likely pay a $0 monthly premium because you or your spouse paid Medicare taxes on 10 years of work. If not, the premium could be $278 or $506 monthly. If hospitalized, you’ll pay a $1,600 Part A deductible for each inpatient hospital benefit period, counted from the day you’re admitted until 60 days after the last hospital care. After you pay your deductible, you’ll pay daily copayments of:

  • $0 for days 1 to 60
  • $400 for days 91 to 90
  • $800 for days 91 to 150
  • 100% after day 150

If you purchase an optional Medigap plan, it helps pay part or all of your uncovered costs.

Part B: Original Medicare Costs

You’ll pay a monthly Part B premium of $164.90 or higher, based on income. You’ll also pay:

  • A Part B deductible of $226 before Medicare starts paying 80% of each Medicare-covered service.
  • 20% of all Part B Medicare-approved amounts after meeting your $226 deductible. Your exposure is open-ended unless you purchase an optional Medigap plan which helps fill the “gaps” left by Part B.
  • Your Medigap plan, provided by private insurers, will also have a monthly premium.

Medicare Part D Costs

If you opt for a private Part D prescription drug plan, you’ll pay a premium that varies by chosen plan and income. The base beneficiary premium in 2023 is $32.74, but premiums can vary nationwide from $1.60 to $201.10 per month, plus a surcharge for higher income. Deductibles, copayments, and coinsurance will also vary by plan and by chosen pharmacy, but yearly deductibles can’t exceed $505, and out-of-pocket spending is limited to $7,400.

Medigap Costs

If you buy a Medigap plan, your monthly premium will depend on the plan you buy, where you live, and other factors like gender, marital status, and smoking behavior. It will help pay the copayments and coinsurance left after Part A and Part B pay their share, but not Part D. Only two types of Medigap plans (Plan C and Plan F) cover your Part B deductible.

Part C: Medicare Advantage Costs

You may pay a $0 Part C monthly premium, like nearly 70% of other Medicare Advantage beneficiaries, or somewhat more depending on your chosen plan. In 2022, average premiums nationwide ranged from $16 to $49. You still have to pay the government-set Part B premium of $160.90 each month. Deductibles, copayments, and coinsurance vary by plan and can change each year, which allows you to change plans yearly, too.

Instead of paying a 20% coinsurance like Part B, you’ll pay a fixed fee for each doctor visit, lab test, or other service. The out-of-pocket limit for Part A and Part B services also varies by plan, although it can’t exceed $8,300 if you stay within your network and $12,450 if you also go out-of-network. After reaching your plan’s maximum, it pays 100% of covered health services for the rest of the calendar year.

Differences Between Networks, Doctors & Hospitals

In a Medicare Advantage vs. Medicare comparison, a significant decision-making factor is how each one lets you access doctors and hospitals. This difference can be vital if you want to keep your doctors or preferred hospitals.

Original Medicare

With Original Medicare, you can go to virtually any primary care doctor or specialist nationwide, as long as they accept Medicare. The same holds for hospitals and testing facilities. That means you can most likely keep your doctors and hospitals when you join Medicare and are not at risk of losing access because they’re no longer part of an insurance company’s ever-changing network. You won’t need a Primary Care Physician (PCP) to provide referrals.

Medicare Advantage

Medicare Advantage has many of the features of the private health insurance plans you may have had before retiring, including services offered through Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs). These managed care plans have specific networks of contracted doctors and hospitals you can use, and you typically need a PCP acting as coordinator and gatekeeper for your care. You will have nationwide coverage in cases of emergency, but you’ll have to pay for more — if not all — of the cost of other services received outside your plan’s network or from a specialist without a referral if your plan requires it.

Coverage Differences Between Medicare Advantage and Original Medicare

Original Medicare and Medicare Advantage differ in the coverage they offer. Here’s how:

Original Medicare Coverage

Original Medicare prioritizes the most medically necessary services and supplies you’d receive as an inpatient in a hospital or skilled nursing facility, as well as outpatient services, doctor visits, testing, and specific preventive care. It doesn’t cover procedures such as cosmetic surgery unless deemed medically necessary. It also doesn’t cover prescription drugs, dental care, or routine eye and hearing exams.

However, those shortfalls can be remedied by buying standalone insurance plans. Prescription drug coverage can be resolved with an optional Part D private prescription drug plan. Other benefits — such as dental, vision, and hearing — can be purchased through private insurers on the open market.

Medicare Advantage Coverage

By law, Medicare Advantage plans must provide all the medically necessary services you would receive if you had chosen Original Medicare for your coverage. In addition, the vast majority of plans offer dental, vision, and hearing benefits — as well as prescription drug coverage — in an all-in-one umbrella plan. To increase the appeal of Medicare Advantage plans, the government has been expanding the services that Medicare Advantage plans can offer its beneficiaries. These include fitness memberships, transportation to medical appointments, home access and safety improvements, meal delivery, and an allowance for over-the-counter medications.

Differences in Simplicity

Another factor to consider when deciding between Original Medicare and Medicare Advantage is how easy the plan is to use.

Original Medicare

With Original Medicare, you can’t enroll in just one plan if you want full coverage. You’ll have Part A (Hospital Insurance) and Part B (Medical Insurance), but you’ll have to buy an optional Part D prescription drug plan from a private insurer if you want drug coverage. You’ll likely also want to buy a Medigap plan to help with the 20% of uncovered Part B costs which are an open-ended financial exposure.

You don’t have to file claims: doctors and hospitals file them for you. After Medicare pays its share of the expense, the balance is invoiced for you to review and pay. If you have Medigap, it intervenes and pays its share before the invoice reaches you, sometimes paying the entire balance due.

As a traveler, you’re assured access to doctors wherever you go within the United States, without needing a referral, as long as the doctor accepts Medicare.

Medicare Advantage

Simplicity with Medicare Advantage comes from bundling all your coverage under one plan: Part A and Part B, plus prescription drug coverage, dental, vision, hearing, and fitness benefits. However, you may have to look at a vast number of plan options to find the one that fits your budget and includes your preferred-doctor list and the prescription medications you currently take.

No Medigap plan is available for Medicare Advantage plans, so you’ll be responsible for paying all the deductibles, copayments, and coinsurance you incur. These plans have an out-of-pocket maximum, but you need to be sure you can cover it should you have extensive medical needs at any time.

If you travel outside the geographic boundaries of your plan, be sure to understand how your benefits work. For example:

  • If you have an HMO, you may only get emergency medical coverage, which could result in costly out-of-network medical bills. An exception is if you find a plan with a passport feature that allows snowbirds to split their time and coverage between multiple states.
  • If you have a PPO, your out-of-network costs may be much higher than your in-network costs.

Foreign Travel

When comparing Medicare vs. Medicare Advantage programs, they both focus on providing care in the U.S. and not abroad. Because they offer limited coverage outside the United States, you may want to buy a travel insurance policy if you travel abroad frequently.

Foreign Travel with Original Medicare

Original Medicare doesn’t usually cover you outside the U.S. with three exceptions:

  • You’re in the U.S. — whether you have an emergency or not — and a foreign hospital is closer than a U.S. hospital.
  • You’re in Canada traveling between Alaska and the United States, you have an emergency, and a Canadian hospital is closer than a U.S. hospital.
  • You’re on a ship that’s within six hours of a U.S. port.

You also have access to supplemental coverage through Medigap plans. Some Medigap plans pay 80% of the billed charges for medically necessary, Medicare-covered care after you pay the $250 annual deductible, as long as your emergency care starts during the first 60 days of travel. This coverage has a $50,000 lifetime limit.

Foreign Travel with Medicare Advantage

Medicare Advantage is legally required to provide the same coverage as Original Medicare, so the three exceptions mentioned above will apply when you travel abroad.

Some private insurers offering Medicare Advantage have specialized plans that include overseas coverage. If foreign travel is in your retirement plans, you will want to work with a licensed insurance agent. Contact OpenMedicare for help finding the right coverage and plan for your needs!

Original Medicare vs. Medicare Advantage Recap

You may be asking about the pros and cons of Medicare Advantage plans vs. Original Medicare. Both programs offer excellent health care coverage for people over 65 and those with long-term disabilities. However, the programs vary greatly. Finding the right one for you requires understanding the differences and possibly some assistance.

Original Medicare is best for you if:

  • You want the flexibility to see any doctor anywhere in the country without needing a referral.
  • You use health care frequently, you want a Medigap plan to help minimize costs, and you know the best time to buy one is when you are first eligible for Medicare.
  • Your budget can cover the various premiums — Part B, Part D, and Medigap — and you want to relieve your concern over long-term drug costs and Original Medicare’s open-ended out-of-pocket expenses.
  • You intend to frequently travel in retirement and want access to doctors wherever you go in the U.S. — and coverage abroad with a Medigap plan.
  • You want the peace of mind of knowing the cost of your health care coverage regardless of how your needs evolve as you age, which Medigap can provide, especially if you select a plan that covers 100% of what Medicare doesn’t.

Medicare Advantage is best for you if:

  • You want a single plan that covers your basic medical needs, prescription drugs, plus benefits such as dental, vision, hearing, and fitness.
  • You don't mind getting certain procedures authorized before you receive benefits.
  • Your area has an extensive network of providers, so working within network is not inconvenient.
  • You use health care infrequently now, but you want the flexibility to change plans each year to reflect your current needs.
  • A Medigap plan premium doesn’t fit in your budget, but a $0 premium Medicare Advantage plan does, and you feel you can cover the maximum out-of-pocket for deductibles, copays, and coinsurance.
  • You don't think you’ll need to see a doctor unless it is an emergency — or don't mind possibly paying more for your benefits if you travel out of network.

Your choice of Medicare coverage can influence a critical part of your retirement years: your health. More importantly, in some cases, your first decision can affect the rest of your years. If the decision isn’t as easy as you’d like, contact OpenMedicare at (844) 910-2061 to have a licensed insurance agent help you make the best decision.



Please note that we do not always offer every available plan in your area. As a result, any information we provide is limited to the plans we offer in your area. Please contact Medicare.gov or 1–800–MEDICARE for information on your options.

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