Medicare Advantage vs. Original Medicare

Medicare-eligible individuals have the option to get their health coverage through either Original Medicare or Medicare Advantage. Original Medicare is the traditional, government-run program that includes Part A and Part B. Medicare Advantage is an alternative to traditional Medicare offered by private health insurance companies but mandated to offer at least the same coverage as Original Medicare.

Apart from who provides the coverage, the plans may be differentiated by the following:

• Coverage: While Medicare Advantage is required to provide the same coverage as Original Medicare, it may offer additional coverage that Original Medicare does not, such as dental, hearing, and vision services.
• Cost: Original Medicare mandates premiums in addition to deductibles, copayments, and coinsurance. Medicare Advantage plans may have lower out-of-pocket costs, but may also have higher costs for other services.
• Network: Original Medicare allows recipients to see any doctor within the Medicare system. Medicare Advantage usually requires that recipients see providers within a network in their local area.
• Referrals: Original Medicare does not require referrals to see a specialist, while Medicare Advantage often does.
• Prescriptions: Prescription drug coverage is not included in Original Medicare, while it is typically included in Medicare Advantage plans.

Medicare Health Coverage: Exploring Your Options

Medicare exists to help older adults and people with disabilities access the health services they need at an affordable price. As of November 2022, the program provides health coverage to approximately 65.3 million Americans.

Consumers can choose to receive their Medicare benefits through Original Medicare or a Medicare Advantage Plan. Because Original Medicare does not initially cover services outside of those provided in a hospital or ordered by a doctor, people who select Original Medicare can supplement their coverage with Medigap and/or Part D (prescription drug) plans. 

Medicare Options Defined

Understanding the differences between Original Medicare and Medicare Advantage is crucial for making an informed decision about your healthcare coverage. Read on to learn their differences and determine which is right for you.

What Is Original Medicare?

Original Medicare is the U.S. government’s health insurance program for people 65 and older. Some people younger than 65 get Medicare early due to a disability or health condition. Nationwide, more than 35.1 million people are enrolled in Original Medicare as of November 2022.

The program has two parts: Part A (Hospital Insurance) and Part B (Medical Insurance). Together, these parts cover a wide variety of services that prevent, diagnose, and treat health conditions. 

What Is Medicare Advantage? 

Medicare Advantage (Part C) is a different way for consumers to get their Medicare benefits. With more than 30.2 million enrollees, this alternative is nearly as popular as the traditional program.

Medicare Advantage Plans cover the same medically necessary services as Original Medicare but is offered by private insurers rather than the federal government. However, the costs for these services and the rules for accessing care vary from plan to plan. 

Side-by-Side Comparison: Original Medicare vs. Medicare Advantage

Understanding the differences between Original Medicare and Medicare Advantage is crucial for making an informed decision about your healthcare coverage. To help illustrate these differences, check out this chart comparing the key features of both programs.

	Original Medicare	Medicare Advantage
Part A	Yes	Yes
Part B	Yes	Yes
Part D (prescription drug coverage)	No; you can enroll in a stand-alone Part D plan	Sometimes; some plans include Part D benefits or you can enroll in a stand-alone Part D plan
Dental, vision, and hearing	No	Often; Yes
Additional benefits	No	Sometimes; some plans offer transportation, gym memberships, and meal delivery.
Premium	Part A: Usually $0, but some people pay $278 or $505 per month. Part B: Usually $174.70 per month in 2024.	Varies; some plans charge supplemental premiums in addition to Part A and/or B premiums
Deductible	Part A: $1,632 per benefit period. Part B: $240 per year	Varies; some plans have a $0 deductible
Copay and coinsurance	Yes; varies by service	Yes; varies by plan and service
Annual out-of-pocket maximum	None; you can enroll in Medigap to reduce out-of-pocket costs	Varies; out-of-pocket maximums can be as high as $8,850 for 2024
Medigap coverage	Compatible with Medigap supplemental insurance plans	Not compatible with Medigap plans
Initial Enrollment Period	Yes	Does not apply
Annual Enrollment Period	Oct. 15 to Dec. 7	Oct. 15 to Dec. 7
General Enrollment Period	Jan. 1 to Mar. 31	Jan. 1 to Mar. 31; in certain circumstances
Medicare Advantage Open Enrollment Period	Does not apply	Jan. 1 to Mar. 31
Special Enrollment Periods	Yes, in certain circumstances	Yes, in certain circumstances
Provider network	No network restrictions; can see any provider that accepts Medicare	Usually have provider networks; may require recipients to choose doctors within their local area
Referrals	No referrals required to see a specialist	May require referrals to see a specialist
Choice of plans	Original Medicare plus standalone Part D plan and/or Medigap policy	Various Medicare Advantage plans offered by private insurance companies

Original Medicare vs. Medicare Advantage Benefits 

One of the most significant areas in which Original Medicare and Medicare Advantage differ occurs in which services are included as part of standard coverage. While Medicare Advantage Plans are required to cover the same services as Original Medicare, some plans offer coverage for additional benefits, such as prescription drugs.

Keep in mind that Original Medicare offers a variety of supplemental plans created to supplement some of those gaps in coverage. However, that additional coverage does require additional payment.

Part A 

Part A, also referred to as Hospital Insurance, is the part of Medicare that covers inpatient medical services. These services are:

• Inpatient Hospital Care: Including room and board, nursing care, meals, and other hospital services and supplies
• Skilled Nursing Facility Care: Including room and board, nursing care, therapy services, and other skilled services and supplies for up to 100 days
• Hospice Care: including palliative care for people with a terminal illness and support for their families
• Home Health Care Services: Including skilled nursing care, physical therapy, speech therapy, occupational therapy, medical social services, and other services and supplies needed for home healthcare
• Blood Transfusions (after the first three pints)
• Limited Inpatient Care in a religious non-medical health care institution (such as a Christian Science facility)
• Limited Home Health Aide Services (such as help with personal care) as part of a plan of care established by a doctor or other health care provider.

Part A is half of what is considered Original Medicare and is included automatically in all Original Medicare plans.

Part B

Part B, also referred to as Medical Insurance, is the part of Medicare that covers outpatient medical services and equipment. Covered benefits include, but are not limited to:

• Doctor Services: Including office visits, outpatient visits, and telehealth visits
• Preventive Services: Including wellness visits, screenings, vaccines, and other services to help prevent illness or detect it early
• Outpatient Services: Including ambulance services, durable medical equipment (such as wheelchairs and oxygen), and mental health services
• Clinical Laboratory Services: Including blood tests, urine tests, and other diagnostic tests
• Diagnostic Imaging Services: Including X-rays, CT scans, and MRIs
• Physical therapy, occupational therapy, and speech therapy services
• Certain prescription drugs that are administered by a doctor or other health care provider (such as injections)
• Preventive services related to cardiovascular disease, including cardiovascular disease screenings, behavioral therapy, and aspirin use

Part D

Drug coverage (Part D) is an optional benefit for Medicare recipients. It helps beneficiaries pay for the prescription drugs they take at home that are not covered by Original Medicare, such as those used to treat high blood pressure or high cholesterol. Keep in mind that Part D plans are administered by Medicare but sold by private health insurers.

In contrast, this coverage is bundled into 89% of Medicare Advantage Plans. Individuals with a Medicare Advantage plan that does not have prescription drug coverage may be able to seek this coverage through Part D as well. You may add Part D to any type of Medicare plan that does not already include it as a stand-alone plan.

Additional Benefits

Medicare Advantage Plans frequently offer coverage for benefits not part of Original Medicare. These supplemental benefits are a critical difference between Original Medicare vs. Medicare Advantage. Common additional benefits frequently included as part of Medicare Advantage include:

• Vision care 
• Hearing care 
• Dental care 
• Over-the-counter items 
• Meal benefits 
• Transportation
• Acupuncture

Original Medicare vs. Medicare Advantage Costs

Original Medicare features standardized costs, while Medicare Advantage plans have cost that vary by provider. Keep in mind that regardless of which option you choose, they are subject to change on an annual basis.

Premium 

A health insurance premium is the amount of money you pay your health insurance provider to maintain your health insurance coverage. Original Medicare and Medicare Advantage premiums are determined by different factors than traditional health care plans. Original Medicare premiums are determined by your work history and how long you’ve paid into the program. In contrast, Medicare Advantage premiums are determined by the plan and insurer you select.

Premiums in Original Medicare

Many people with Original Medicare do not pay a premium for Part A, so long as they or their spouse worked and paid Medicare taxes for at least ten years. People who are not eligible for premium-free Part A pay either $278 or $505 per month in 2024, depending on their work history.

The standard monthly premium for Part B is $174.70 and is paid by all recipients, though some higher-income beneficiaries pay more. 

Premiums in Medicare Advantage

Some types of Medicare Advantage Plans charge monthly premiums, while others have a monthly premium of $0. In either case, beneficiaries remain responsible for their Part A and B premiums.

Deductible

A deductible in Medicare is the amount of money you must pay out of pocket for covered medical services before Medicare begins to pay its share. Once you have met your deductible for the year, Medicare will generally begin to pay its share of covered medical services, and you will be responsible for any remaining cost-sharing until you reach your out-of-pocket limit.

Deductibles in Original Medicare

In 2024, the Medicare deductibles are:

• $1,632 for Part A
• $240 for Part B

Deductibles in Medicare Advantage

Some plans have a $0 deductible. When plans charge a deductible, the amount generally ranges from around $200 to $1,300 per year.

Copay and Coinsurance

A copayment is a fixed amount you pay out of pocket for a covered medical service or supply. The copayment amount may vary depending on the service or supply, typically due at the time of service.

Coinsurance, on the other hand, is a percentage of the cost of a covered medical service or supply that you are responsible for paying. For example, if a covered medical service costs $100 and your coinsurance is 20%, you would pay $20, and Medicare would pay $80.

Copays/Coinsurance in Original Medicare

Part A copays vary depending on the service and the length of stay for inpatient care. Original Medicare plans may require costs on a different scale than traditional healthcare plans.

As of 2024, the average coinsurance and copays associated with Medicare Part A include the following:

• $408 per day coinsurance payment in 2023 for in-patient hospital stays for days 61 to 90
• 20% copay for Medicare-approved durable medical equipment (DME).
• $204 coinsurance payment in 2023 for days 21 to 100 for a skilled nursing facility stay.
• 20% copay for mental health services connected with a hospital stay.

As of 2024, the average coinsurance and copays associated with Medicare Part B include the following:

• A 20% copay after meeting the deductible for doctor services while hospitalized, DME, and outpatient therapy.
• A 20% copay for mental healthcare
• A 20% copay for outpatient services after the deductible

Copays/Coinsurance in Medicare Advantage

Copays/coinsurance for Medicare Advantage vary depending on the plan, covered service, and whether or not the care was provided in the plan’s network. Check each plan’s Summary of Benefits and Coverage for details.

Out-of-Pocket Maximums

An annual out-of-pocket maximum limits the amount of money plan members spend on covered services. If a consumer reaches their out-of-pocket maximum, their plan pays the total cost of covered services for the rest of the year.

Original Medicare does not have an out-of-pocket maximum. Medicare Advantage Plans are required to cap members’ out-of-pocket spending at no more than $8,850.

Original Medicare vs. Medicare Advantage Compatibility with Medigap 

Medicare Supplement Plans, commonly known as Medigap Plans, are only compatible with the traditional Medicare program. They help cover out-of-pocket expenses in Original Medicare, such as deductibles and coinsurance. Some plans add an out-of-pocket maximum to help shield beneficiaries from high healthcare costs. 

Medigap policies do not work with Medicare Advantage, so they do not cover plan members’ deductibles, copayments, or coinsurance. For these reasons, it’s generally not possible to buy Medigap when you’re enrolled in Medicare Advantage unless you’re switching back to Original Medicare.

Original Medicare vs. Medicare Advantage Enrollment Periods

An enrollment period is a window of time when people can sign up for health insurance or make changes to their existing coverage. There are several enrollment periods for Medicare.

• Initial Enrollment Period: The Initial Enrollment Period (IEP) is a Medicare-eligible person’s first opportunity to enroll in Part A and B, and if they choose, a Medicare Advantage Plan. It lasts seven months and starts three months before the eligible person turns 65. 
• Annual Enrollment Period: The Annual Enrollment Period, sometimes known as Fall Open Enrollment, runs from Oct. 15 to Dec. 7 each year. During this time, people with Medicare can change their coverage for the upcoming year. This includes switching from Original Medicare to Medicare Advantage or vice versa.
• General Enrollment Period: The General Enrollment Period runs from Jan. 1 to Mar. 31 each year. It gives people who missed their Initial Enrollment Period the opportunity to sign up for Part B and premium Part A. People who already had Part A can join a Medicare Advantage Plan after enrolling in Part B.
• Medicare Advantage Open Enrollment Period: The Medicare Advantage Open Enrollment Period from Jan. 1 to Mar. 31 allows people in Medicare Advantage Plans to change their coverage. Allowable changes include switching to another Medicare Advantage Plan or returning to Original Medicare. 
• Special Enrollment Periods: In certain situations, signing up for Medicare Part B and/or premium Part A is possible outside of the regular enrollment periods. For example, a person who works past 65 and has job-based health insurance becomes eligible for a Special Enrollment Period when they stop working.

Be Aware of Late Enrollment Penalties If You Skip Enrollment

Signing up for Medicare isn’t mandatory, and some eligible people choose to skip enrollment for various reasons. However, people who go without coverage may face late enrollment penalties if they decide to enroll in Medicare later:

• Part A penalty: A 10% higher premium (if you need to buy Part A). This penalty lasts twice the number of years you could have signed up but didn’t.
• Part B penalty: A 10% higher premium for each year you went without Part B coverage. This is a lifetime penalty. 
• Part D penalty: A 1% higher premium for each month you went without creditable drug coverage. This is a lifetime penalty.

Which Should You Choose: Original Medicare or Medicare Advantage? 

When comparing Medicare Advantage vs. Medicare, consider your needs and preferences, and weigh the advantages and disadvantages of each option. Remember that it is possible to switch between the plans. However, you may need to wait until specific periods of the year to do so.

Choose Original Medicare If… 

Enrolling in Original Medicare could be the right choice if you:

• Travel frequently and want coverage that works in all 50 states.
• Want the flexibility to choose your doctors without network restrictions
• Prefer not needing referrals to see specialists.
• Live in an area with few Medicare Advantage Plan options.
• Have chronic health conditions and expect to need regular care.

Choose Medicare Advantage If… 

Enrolling in Medicare Advantage could be the right choice if you:

• Need coverage for extra benefits, such as routine dental or hearing care.
• Prefer the convenience of getting your Medicare coverage through a single plan.
• Want the predictability of an annual limit on Medicare out-of-pocket spending.
• Do not need the flexibility to see any Medicare-accepting provider.
• Are in good health and seek health care infrequently.

Key Benefits Compared

Original Medicare 

As a federal government program, Original Medicare offers coverage throughout the U.S. with no network restrictions. That means beneficiaries have the flexibility to see any doctor or provider who accepts Medicare in any U.S. state or territory. 

With Original Medicare, beneficiaries typically do not need approval before receiving a covered health service and supply or seeing specialists. This makes it easier for beneficiaries to access the care they need. Original Medicare is also compatible with Medigap, helping beneficiaries cover costs such as deductibles and coinsurance. 

Medicare Advantage

Medicare Advantage Plans bundle Part A, Part B, and often Part D in addition to some supplemental coverage in one plan. This appeals to consumers who do not want to manage multiple plans with multiple premiums. 

These plans attract consumers with additional needs not covered by Original Medicare, such as routine dental or vision care. Further, Medicare Advantage Special Needs Plans to provide tailored benefits to enrollees with serious or complex conditions.

A key difference between Medicare Advantage vs. Medicare is the former is required to set an out-of-pocket maximum. This shields beneficiaries from high health costs and offers more predictable budgeting.

Disadvantages Compared

Original Medicare 

While there are many advantages of Original Medicare, there are also some disadvantages. One of them being that the program has no out-of-pocket maximum. People who experience serious injuries or illnesses may face high costs with Original Medicare unless they have supplemental coverage through Medigap.

Additionally, Original Medicare does not include coverage for some key health services, such as prescription drugs, routine dental care, and routine vision care. Beneficiaries who want this coverage can buy stand-alone plans, such as Part D, but this leaves them juggling multiple premiums.

Medicare Advantage 

While beneficiaries are drawn to Medicare Advantage Plans for their additional benefits, the costs may be higher. In addition to premium costs, plans may have higher cost-sharing requirements than Original Medicare.

Rules for accessing care are another drawback of Medicare Advantage. Many Medicare Advantages plans allow enrollees to access health services only from providers within their network. This means that their plan may not offer coverage away from home. Further, Members may need referrals to see specialists and approval from the plan to get tests or treatments covered. 

How to Do It: Enrolling in Original Medicare vs. Medicare Advantage

Once you’ve decided which Medicare coverage option best suits your needs, it’s time to enroll. The enrollment processes for Original Medicare and Medicare Advantage are straightforward.

How to Enroll in Original Medicare

People already receiving benefits from Social Security are automatically enrolled in Original Medicare when they become eligible. Others can enroll by contacting Social Security through one of the following methods:

• Call 1-800-772-1213 (TTY:1-800-325-0778).
• Visit a local Social Security office.
• Apply online at ssa.gov.

If you have Medicare Advantage and want to switch back to Original Medicare, contact your plan or call 1-800-MEDICARE.

How to Enroll in Medicare Advantage

Enrollment for Medicare Advantage Plans works a bit differently. Take these steps to join a plan:

• Enroll in both Medicare Part A and Part B, as described above.
• Provide your Medicare Number and coverage start dates. 

If you’re switching from Original Medicare, you may no longer need your Medigap policy or separate drug plan. Contact the insurer to disenroll.

How to Switch Plans After Enrollment 

After enrolling in Original Medicare or a Medicare Advantage Plan, some people are not satisfied with their coverage. Fortunately, there are opportunities throughout the year to make changes.

During the Annual Enrollment Period in the fall, it’s possible to switch from Original Medicare to Medicare Advantage or vice versa. People with Medicare Advantage Plans have the option to switch plans or return to Original Medicare during the Medicare Advantage Open Enrollment Period. 

What It All Means For You

Both Original Medicare and Medicare Advantage cover various medically necessary health services, but they work very differently. Original Medicare offers a nationwide network and the flexibility to see any Medicare-accepting provider, while Medicare Advantage offers less flexibility but often covers additional benefits. 

To choose between Medicare Advantage vs. Medicare, think about your needs and preferences. Carefully weigh the pros and cons of Medicare Advantage Plans vs. Original Medicare, including costs, covered benefits, and rules for accessing care. Rest assured that regardless of your choice, your Medicare benefits can help you pay for the health services you need.