Now that you’re nearing age 65, you’re starting to think about your long-term care over the next few decades of your life. You want to ensure that as you get older and may need more medical help, you have affordable, comprehensive coverage that will ensure you stay healthy for as long as possible. At the same time, you don’t want to pay tons of out-of-pocket expenses since you’re also retiring soon.
The things that concern you are surgeries, procedures, and prescription drugs you may need, the costs associated with going to the hospital, into a nursing home, or receiving at-home care, and what will happen if you have an emergency. You also know you’ll need extra help when it comes to dental and eye care. You’ve heard from others that unfortunately, medical, dental and eye care bills become higher as you grow older, and you want to be able to afford it all and not have to skip appointments due to a lack of funds.
You’re looking into Medicare Advantage and Original Medicare, but you don’t know which one is the best for your situation, and what will continue to be the best in the future. Let’s take a look at what the two are, along with the differences between them as we examine Medicare Advantage vs. Medicare.
What is Medicare?
When looking at Medicare Advantage vs. Medicare, you first have to know what each one is. Medicare, also called Original Medicare or Medicare Part A and B, is a federal program run by Centers for Medicare & Medicaid Services, which is under the umbrella of the U.S. Department of Health and Human Services. Medicare is funded by payroll taxes that workers and employers pay, as well as monthly premiums paid by the beneficiaries that could be deducted from their Social Security benefits. Most people 65 and older choose Original Medicare when it comes to healthcare coverage.
It offers eligible recipients – those 65 or older or those who are under 65 and have end-stage renal disease or have been eligible for Social Security disability benefits for a minimum of 24 months – healthcare coverage. Recipients are automatically enrolled when they turn 65, but it is possible for them to opt out. Individuals can go to doctors, hospitals and other providers who accept Medicare coverage. Typically, individuals will pay a fee, like with other healthcare coverage, and Medicare will take care of the rest.
Original Medicare comes in Parts A and B. Part A will cover a certain amount of hospital expenses, care in skilled nursing facilities, hospice care, and some types of home health care. Part B will pay for doctor bills and various medical expenses like preventive screenings, medical supplies, and lab tests.
Usually, if individuals or their spouses paid Medicare taxes while they were employed, they will not have to pay a monthly premium for Medicare Part A coverage. But when it comes to Medicare Part B, most people are going to be paying a standard monthly premium. Some individuals pay a higher Medicare Part B premium that is based on their income.
Healthcare services are paid through something called an assignment. This is a process where a healthcare provider, medical product supplier, or doctor will take the Medicare-approved amount as full payment for their services provided. As long as individuals go to doctors, suppliers, or providers that accept assignment, they will only be charged the Medicare deductible or coinsurance amount, and they will wait to receive the rest of the payment from Medicare.
Now that you know the ins and outs of Medicare, let’s look at what Medicare Advantage is, and how it plays into Medicare Advantage vs. Medicare.
What Is Medicare Advantage?
The common Medicare Advantage plan types include Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), and Private Fee-For-Service (PFFS). There are less common ones, including Special Needs Plans (SNPs), Provider Sponsored Organizations (PSOs), and Medical Savings Accounts (MSAs).
When individuals enroll in a Medicare Advantage plan, they assign their Original Medicare benefits to their private insurance carrier, and will usually play the Medicare Advantage and Part B premium (along with the Part A premium if they have one, which is unusual).
Medicare Advantage Plans might have different coverage rules, premiums, provider networks, and cost-sharing for covered services than Original Medicare. Individuals are allowed to enroll in Medicare Advantage plans if they have Medicare Parts A and B already, if they live a plan’s service area, and if they don’t have end-stage renal disease (except for rare circumstances). For example, individuals have end-stage renal disease, they can enroll in a Medicare Advantage special needs plan that accepts people with the disease.
Medical Advantage plans are required to include limits on individuals’ out-of-pocket expenses for their Part A and Part B costs. The limits are typically high; for Medicare Advantage HMO plans, it’s $6,700. Medicare Advantage plans cannot make the individuals pay higher coinsurances or copayments than they would with Original Medicare for specific services like dialysis and chemotherapy. Most Medicare Advantages plans will provide prescription drug coverage.
Unions or employers will sometimes enroll workers in Medicare Advantage plans that they choose to sponsor. Individuals can stay with the plans, switch to other ones, or simply use Original Medicare instead. But, individuals should be aware that if they choose to switch coverage, the employer or union might reduce or eliminate their healthcare benefits as well as those of dependents. Individuals need to talk to their employers or unions before making the change.
The 4 Biggest Differences Between Medicare Advantage and Medicare
When determining whether to enroll in only Original Medicare or Original Medicare and a Medicare Advantage plan, you have to look at the biggest differences between both. Here are the four biggest differences you’ll find examining Medicare Advantage vs. Medicare:
- Original Medicare does not cover prescription drugs. If you take prescription drugs for any reason, you may decide, when looking at Medicare Advantage vs. Medicare, that the former is best. Approximately 82% of Medicare Advantage plans, like HMOs and PPOs, will come with prescription drug coverage. Each plan has its own benefits and limitations, so if you rely heavily on prescription drugs, make sure you find one that will cover most, if not all, of your medications. Be aware that you can also enroll in Original Medicare and a stand alone Prescription Drug Plan as an alternative to enrolling in a Medicare Advantage plan altogether.
- Original Medicare does not cover dental and vision services. When it comes to Medicare Advantage vs. Medicare for eye and dental services, Medicare Advantage might be a better choice. If you need extra dental care outside of your six month cleanings or go to the eye doctor more than a few times a year, consider getting a Medicare Advantage plan. Some of them will cover these services.
- If you’re a traveler, when looking into Medicare Advantage vs. Medicare, you’re going to want to go with Medicare Advantage. Original Medicare will not cover care outside of the United States and its territories, even if it’s an emergency. Some Medicare Advantage plans will, however. Many people use their retirement to see the world, so don’t let your healthcare coverage back from exploring different places during your golden years.
- You want out-of-pocket protection. Once aspect that helps Medicare Advantage win the Medicare Advantage vs. Medicare argument is the fact that Original Medicare has no out-of-pocket maximum, while Medicare Advantage does. By law, Medicare Advantage plans have out-of-pocket maximums of no more than $6,700 per year. Some plans have an even lower out-of-pocket maximum. When you’re looking into Medicare Advantage vs. Medicare, keep these out-of-pocket maximums in mind.
Finding A Medicare Advantage or Original Medicare Plan
You now know what’s involved when it comes to Medicare Advantage vs. Medicare. If you’re ready to look into plans and find the one that is best for your evolving healthcare needs, then log onto Ensurem’s website and use Ensurem’s Medicare Supplement Quote tool.
All you need to do is your information like your gender, birthday, zip code, and tobacco use. Then, you choose your search options, which are the plans and their costs. You will be able to see all your options for enrolling.
What are you waiting for? Sign up today to receive the care you need for now and in the future.BLOG2019_004