It’s no secret that understanding Medicare, and Medicare Advantage plans in particular, is not an easy task for most people, especially if you are new to Medicare.
There is a steep learning curve related to Medicare in general, but when you include Medicare Advantage, Part D and Medigap insurance things start to get confusing.
When we learn about anything that is unfamiliar to us it helps to use the proper terms to define concepts. Not doing so only results in a faulty understanding of the subject covered.
The intent of this article is to set the record straight so you understand the difference between original Medicare and a Medicare Advantage plan.
Your Medicare coverage is not replaced with a Medicare Advantage plan
When you enroll in a Medicare Advantage plan you are still enrolled in Medicare. You continue to have all the rights and protections afforded to people eligible for Medicare. The federal government will remind you monthly that you are still enrolled in the Medicare program by deducting your Part B premium from your Social Security check!
Medicare Advantage plans are administered by private insurance companies that are contracted with the Centers for Medicare and Medicaid Services (CMS). Plans must adhere to the strict guidelines provided by CMS.
As a member of a Medicare Advantage plan, you have chosen to receive your Medicare benefits from that plan. All the services you are entitled to as a Medicare beneficiary will be provided by your plan.
You are still enrolled in Medicare, and are merely receiving your benefits in a different way.
The problem of referring to a Medicare Advantage plan as a Medicare replacement plans becomes evident when people mistakenly believe that they have left the Medicare program. Once you become eligible for Medicare, you remain eligible for Medicare, as evidenced by the fact that you can choose to receive your benefits from original Medicare by not renewing your Advantage plan for the following calendar year.
Differences between Medicare Advantage and original Medicare
Disinformation can be found online that indicates that if you are enrolled in a Medicare Advantage plan you will not receive all benefits provided by original Medicare. This is false and may contribute to people not choosing a plan that may be more suitable for them.
Medicare Advantage plans are required to provide all services which are covered by original Medicare. The difference comes in how you pay for your share of those services.
With original Medicare you will share in the costs for receiving covered services. These include:
- Part A Deductible and Coinsurance
- Part B Coinsurance (the dreaded 20%)
- Part B Deductible
There is no out-of-pocket maximum and you will need to enroll in a Part D plan if you want drug coverage (highly recommended!).
With a Medicare Advantage plan you may be subject to deductibles, copayments and coinsurance. Amounts can (and do) differ between different plans.
You may find that you are required to pay a small copayment for a doctor’s visit, whereas receiving your benefits from original Medicare would require a 20% coinsurance payment once your annual Part B deductible is met.
Conversely, receiving some benefits outside of the plan’s provider network may require an amount greater than the 20% required by original Medicare.
These are just two examples the differences in how paying your share can vary from a Medicare Advantage plan to original Medicare.
Advantage plans also often include Part D coverage as well as additional benefits not included in original Medicare, such as; dental, vision, gym memberships, etc. .
Comparing plans is important due to the differences between plans.
Either way is acceptable to get your Medicare benefits, just don’t think of a Medicare Advantage plan as a Medicare replacement plan.