Original Medicare and Medicare Advantage – A Cost ComparisonPosted by Medicare Made Clear
An important part of staying within a budget can include keeping your Medicare costs low. Two of the most common competitors for your Medicare dollar are Original Medicare (Parts A and B) and Medicare Advantage plans. It’s important to understand the costs of each plan—all the costs—so you know which type of coverage might best fit your budget.
Original Medicare has two parts: Part A and Part B. Part A, also called “hospital insurance,” helps pay for hospital stays and some home health care. Part B helps pay for doctor and medical expenses. This includes doctor visits, preventive care and some tests and screenings. It’s generally best for people who need basic coverage without a lot of extras.
Original Medicare helps pay for a lot of things, but it won’t cover everything. Here are two options you may need to look at in addition to Original Medicare. They may add expenses to your budget, so it’s good to take a look at them when considering costs.
Medicare Part D prescription drug coverage: Remember that Original Medicare doesn’t include prescription drug coverage. If you want your drugs covered—and don’t have other coverage—you will likely need to buy a Part D prescription drug plan.
Medicare supplement insurance: Medicare supplement insurance, a.k.a., “Medigap,” helps pay some of the expenses Original Medicare won’t pay. Costs vary by plan, and not all plans are available in all areas.
Medicare Advantage Plans
Medicare Advantage, also called “Medicare Part C,” has all the benefits of Original Medicare Parts A and B. Plus, it offers extra benefits like vision & hearing coverage, a fitness benefit or even prescription drug coverage. If you like the convenience of one plan for all your coverage, this might be a plan worth considering.
Costs and Cost-Sharing
Both types of coverage require you to help with costs. The one that’s best for you depends on your specific budget. Here are the main things to look for:
Premium: The amount you pay each month to participate in a plan.
Deductible: The amount you have to pay out of your own pocket before your plan will help pay some of your health care costs.
In Original Medicare, premiums and deductibles are set amounts that are usually the same for everyone. Medicare Advantage (Part C) plan premiums and deductibles can vary widely depending on the specific plan.
Copay: The amount you pay each time you use a service.
Coinsurance: The percentage you pay for your health care costs and what the plan pays. For example, you might pay 20% of your costs and the plan will pay the remaining 80%
Part A copays only kick in after a certain number of days in the hospital. Part B copay and coinsurance amounts are set by Medicare, so they’ll usually be the same for everyone. Some Medicare Advantage plans don’t have a copay and some have a high copay. Similarly, some plans will use coinsurance and some won’t. Find out more about Medicare Part A costs, Medicare Part B costs and Medicare Advantage costs from Medicare Made Clear.
Value = Getting the Most for Your Money
When deciding which type of coverage best fits your budget, don’t forget to consider value. What are the benefits that will make your Medicare coverage valuable to you? Some Medicare Advantage plans provide some nice extra benefits. But are they necessary for you? For example, you might appreciate the value of a mail-order pharmacy option, but do you need a paid gym membership, too? Value means getting the most for your money, so be sure you choose the coverage that provides you the best value.
Find and Compare
It’s easy to compare each type of coverage before you choose one. Some sites will let you compare costs based on “usual usage.” This just means you can estimate your future Medicare costs based on the services you already use and how often you use them. For a general comparison of your Medicare options, take a look at the Medicare Made Clear plan type comparison chart. For a more in-depth look at the plans available in your area, check out the Medicare.gov plan finder tool. You can enter your ZIP code or specific health care information—like the prescriptions you take—to get a list of the plans available in your area. You can compare them side-by-side. You can also visit insurance company websites to see the plans they offer. This can help you avoid extra costs and get the plan that’s right for your budget.
For more information, contact the Medicare helpline 24 hours a day, seven days a week at 1-800-MEDICARE (1-800-633-4227), TTY 1-877-486-2048. If you have questions about Medicare Made Clear call 1-877-619-5582, TTY 711, 8 a.m. – 8 p.m. local time, seven days a week.
MedicareMadeClear: Medicare Cost-Sharing Basics
MedicareMadeClear: Medicare Advantage plan costs
Medicare.gov: Plan finder tool
Y0066_120418_093617 File & Use 04282012