Choosing between a Medicare Advantage plan or original Medicare often comes down to money
The goal of a Medicare health plan is generally to get the most comprehensive coverage for the money. Making a choice between a Medicare Advantage plan and original Medicare should be no different.
A Medicare Advantage plan is another way to receive your Medicare benefits. Benefits are provided by a private insurance company which has been approved and contracted with CMS to do so.
Characteristics of Medicare Advantage
- Often a network-based plan like a PPO, HMO or HMO-POS
- Out-of-pocket expenses are often fixed copays, coinsurance or deductibles
- Part D coverage is often included
- Monthly premiums began at $0
- Availability of plans is determined by your County of residence
- Plans often include additional benefits that are not part of original Medicare
- Fee-for-service model does not require network participation
- Requires payment of Part A and B deductibles and coinsurance
- Part D is not included
- Residence does not determine plan benefits
- Only benefits included in original Medicare are covered
Whether you are enrolled in a Medicare Advantage plan or stay with original Medicare you will be required to pay the Part B deductible. But that’s where the similarities in cost sharing end.
Many people who choose an Advantage plan do so to avoid the 20% coinsurance required for outpatient services required by original Medicare. Another feature is that Medicare Advantage plans limit your maximum out-of-pocket costs. The most you will pay beyond premiums for 2012 Medicare Advantage plans is $4700.
Is a Medicare Advantage plan or original Medicare your only choice?
The choice between a Medicare Advantage plan or original Medicare is often not a choice at all if you are interested in purchasing a Medigap policy. To buy a Medigap policy, also known as a Medicare supplement, you cannot enroll in a Medicare Advantage plan.
A Medigap policy will generally pay your portion of Medicare covered expenses. Taking this route to your Medicare coverage will to a large degree limit your cost sharing but will generally require that you pay a larger premium than you would with a Medicare Advantage plan.
Also purchasing a Medigap policy will also mean you will need to buy a stand-alone Part D plan as Part D is no longer included in any Medigap policies. You will also not be afforded any of the extra benefits such as; dental, vision and hearing that are commonly included in Medicare Advantage plans.
Joining a Medicare Advantage plan or buying a Medicare supplement are both ways to control your out-of-pocket costs. And given the fact that you may have $0 monthly premium Advantage plans available there is not really a good reason to stick with original Medicare.