| Wed, Oct 09, 2013 @ 09:00 AM

Two Paths to Medicare: Medicare Open Enrollment Boot Camp

Posted by Medicare Made Clear

medicare advantage plansThe third in a series of eight articles to help you make informed Medicare coverage decisions. Be sure to view our previous entry on preparing for open enrollment if you haven’t already.

Most people know that Medicare is a government program that provides health insurance to older and disabled Americans. But many don’t know that there is more than one way to get Medicare benefits. This article explains your choices.

You have two ways to get your Medicare benefits:

  • Original Medicare is administered by the government. It is sometimes referred to as “traditional Medicare.” It includes Medicare Part A and Medicare Part B.
  • Medicare Advantage is a Medicare program that allows private insurance companies to offer Medicare health plans. The companies that offer the plans must be approved by Medicare. Medicare Advantage is also known as Medicare Part C.

The option to receive Medicare benefits through private health plans has existed since the 1970s. The program was once called “Medicare+Choice.” The “Part C” term still used today came from “Choice.” The Medicare Modernization Act of 2003 renamed the program “Medicare Advantage.”

What Are the Differences Between Original Medicare and Medicare Advantage?

It is a little like comparing apples-to-oranges when looking at the two ways to get Medicare. The best approach may be to learn about the main features and benefits of each.

So, here goes. Read over the information in the two tables below.

 

Original Medicare

Features

Benefits

Includes Part A (hospital) and Part B (medical) coverage

You can have one or the other or both parts. You may not need both if you have employer or retiree coverage, for example.
Provides nationwide coverage You can use any provider or hospital in the country that accepts Medicare. This may be handy if you spend part of the year away from your primary residence, for example.
Does not include prescription drug coverage You may buy a standalone prescription drug plan (Part D), if you choose, or go without this coverage. Part D plans are offered by private insurance companies approved by Medicare.
Allows option for buying coverage for expenses not covered by Parts A and B You may buy a Medicare supplement insurance plan (Medigap) to help pay out-of-pocket expenses such as premiums, deductibles and coinsurance. Plans are sold by private insurance companies approved by Medicare.

 

Medicare Advantage

Features

Benefits

Companies create different plans to meet the various needs of people in the communities they serve You will likely have many plans to choose from, depending on where you live. This may allow you to find coverage that fits your specific health and budget needs.
Every plan must provide all the coverage of Part A and Part B You are assured of getting all the benefits of Original Medicare, no matter what Medicare Advantage plan you choose.
Most plans include prescription drug coverage and additional benefits like dental and vision care You may find it convenient to get all your health care coverage through one plan.

Plans must put a cap on out-of-pocket spending

You know upfront the maximum amount you would have to pay in a year out of your own pocket for your health care. The plan pays for 100% of your care expenses for that year after you reach the cap.

These are just the main differences between Original Medicare and Medicare Advantage. There are many things to consider as you look more closely at each option.

Which Fits Your Needs Best?

This is the big question, right? Each person must find his or her own answer.

Your answer may be very obvious to you based on the features and benefits above. Or you may need to dig deeper.

Many people who choose Original Medicare also choose to buy a standalone prescription drug plan (Part D) and Medicare supplement insurance plan (Medigap). Each of these plans may charge a premium. Most Medicare Advantage plans include this coverage plus additional benefits like dental and vision care—all in one plan. Some Medicare Advantage plans charge no additional premium beyond the Part B premium paid to Medicare.

Comparing costs may be helpful. This is true whether you’re comparing the costs of a Medicare Advantage plan to Original Medicare plus a Part D plan and a Medigap plan, or you’re comparing the cost of one Medicare Advantage plan to another.

Your costs may include premiums, deductibles, copayments and coinsurance. One cost-comparison exercise is to choose one of your health care experiences from the past and figure out what you would pay for the same services under the plans or plan combinations you are considering.

For more help, you can view four Medicare coverage examples and learn how each individual arrived at his or her decision.

Stay With Us!

Read the next post in our weekly Boot Camp series that explores finding Medicare coverage that best fits your needs.  Be prepared to make an informed decision about your Medicare coverage for 2014.

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.

Resources

Medicare & You: Learn about Original Medicare coverage and costs in this annual publication.

Show Me Guide: Use this guide to help you understand your Medicare choices and find the plan that might be right for you.

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