Original Medicare vs. Medicare Advantage [Guide]

PQMedicareSolutionsPosted in Medicare Advantage last updated on September 27, 2020

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What is Original Medicare

Original Medicare or traditional Medicare is low cost health insurance provided by the federal government which covers Part A and Part B benefits.

Original Medicare works on a fee-for-service basis which means that a beneficiary can go to any doctor or hospital, anywhere in the United States, that accepts Medicare and will get coverage for any Medicare-covered service being offered while being charged for it.

Medicare pays its share of an approved amount while you – the beneficiary pays the rest.

Original Medicare provides coverage to individuals who are eligible for Medicare and gives them access to doctors, hospitals, or other healthcare providers that accepts Medicare. Original Medicare provides many healthcare services and supplies, but it doesn’t cover all of a beneficiary’s medical expenses.

Social security automatically enrolls enrollees who sign up for Medicare Part A and Part B into Original Medicare. If an enrollee prefers to receive care from a private Medicare Advantage plan such as HMO or PPO, instead of the original program, he or she must pick a plan that’s available in their area.

If, however, an enrollee chooses to remain in the Original Medicare plan but wants additional coverage, then they can get Prescription drug coverage by subscribing to a private Part D drug plan for an additional Premium; as well as a private supplemental plan (Medicare Supplement) to cover some out-of-pocket costs in the original program.

Original Medicare Vs Medicare Advantage

The original Medicare may appear similar to the Medicare Advantage plan given that both plans give you basically the same set of Medicare part A and Part B benefits, there however have certain differences that will make an intending subscriber choose one over the other.

The original Medicare was established as a government health insurance program to incorporate:

Medicare Part A is hospital insurance and generally covers care at Skilled Nursing Facilities, Hospital Care (Inpatient), Limited Home Health Services, and Hospice Care.
Medicare Part B is medical insurance designed to cover preventive care, doctor visits, lab tests, durable medical equipment, and more.

Conversely, Medicare Advantage plans provide an additional way to get part A and B coverage. Private insurance companies approved by Medicare offer Medicare advantage plans which provide prescription drug coverage and other benefits such as routine vision and dental care.

The prescription drug coverage is more flexible under the Medicare advantage plan as it is incorporated in most of the plans, the Original Medicare, however, includes limited prescription drug coverage in certain situations. It doesn’t necessarily cover the prescriptions you take at home.

Also, extra benefits like routine vision or dental services, routine hearing services, membership in fitness programs, and more are covered in the Medicare advantage plans (though extra benefits may vary from one plan to another), while the original Medicare does not provide any of such benefits

For beneficiaries who decide to travel outside their plan’s service area, the Medicare advantage plan does not cover for them except in emergency situations, the Original Medicare, however, provides coverage for beneficiaries anywhere within the USA, so if you’re moving to a different location, you still get coverage from a Medicare provider in that area.

For the choice of Doctors who take Medicare assignment, beneficiaries under the Medicare advantage plans can afford to choose between doctors in the plan’s network, while the original Medicare provides beneficiaries with one particular doctor.

Out of pockets payment limits may apply under the Medicare advantage plan, though the amount may vary among plans and might change year to year. Whenever beneficiaries reach such a limit, the plan may cover medical expenses for the rest of the year. This, however, does not apply under the original Medicare.

Pros and Cons of Medicare Advantage Plans & Original Medicare

There are several health insurance options for the aging population, but the choicest ones depend, of course, on the benefits they offer. Original Medicare and Medicare Advantage plans offer at least the same level of coverage but there are certain benefits that may be present in one and absent in the other, and vice versa.

This all depends on your healthcare needs. However, working with an independent agent will expose enrollees to certain information that will help them make informed choices, this way, intending enrollees can be sure of getting the best policy to suit their healthcare needs.

PROS OF ORIGINAL MEDICARE

It gives beneficiaries the freedom to choose any doctor or hospital that accepts Medicare anywhere within the United States.
There are no network constraints imposed by the health service provider (as is typical in an HMO) or depending on your area.
Beneficiaries do not need referrals to see a specialist
Original Medicare isn’t subject to annual contracts that may be changed or discontinued.
In most cases, Original Medicare may be complemented with a separate Medicare Part D (Prescription Drug) plan with a separate premium. It could also be complemented with a Medicare Supplement plan (Medigap) to help beneficiaries guard against out-of-pocket expenses incurred while on Part A and Part B of Original Medicare. Paying for Medicare Supplement will help limit your out-of-pocket expenses, but it requires an additional premium.

PROS OF MEDICARE ADVANTAGE

Medicare Advantage covers all the services covered by Original Medicare and further provides additional benefits such as vision, dental and hearing services.
Most Medicare Advantage plans have revoked Medicare requirement of 3-day hospital admission to receive skilled nursing facility coverage.
Medicare Advantage plans have an annual out-of-pocket limit which protects you if your healthcare cost becomes too high. Once you reach that limit, the plan covers all your expenses for the remaining calendar year.
Most of the plans include Prescription Drug coverage in addition to Hospital and Medical benefits. These types of plans may also include medication therapy management. Such care coordination can be a very convenient and very valuable aid to a beneficiary’s health.
Beneficiaries with pre-existing health conditions are usually not denied enrollment or charged increased premiums. Acceptance into Medicare advantage follows a flexible process with usually no health questions asked (except for beneficiaries with ESRD).
Medicare advantage premium is typically lower in comparison with total premiums spent on Medicare supplement and prescription drug plans. It also offers premiums as low as $0.
Medicare Advantage plans to coordinate care among your health care providers.

CONS OF ORIGINAL MEDICARE

In terms of out-of-pocket payment, there are no limits to what you spend on healthcare under original Medicare. If you have a serious accident or illness, you’ll continue to be responsible for some part of the cost, regardless of how high it gets.
Original Medicare does not provide additional benefits, such as dental, vision, and hearing services. Without a Medicare supplement (Medigap) policy, out-of-pocket expenses can be very high.
The Medigap policy may also be difficult to purchase or quite expensive if done outside the Medicare Supplement Open Enrollment period or the Guaranteed Issue Rights Period.
3-day hospital admission is required to qualify for skilled nursing facility coverage. This may be a huge limitation for some terminally ill beneficiaries.

CONS OF MEDICARE ADVANTAGE

Medicare Advantage plans may limit your freedom of choice in healthcare providers due to restrictions in terms of provider networks. If you go out of network, your plan may not cover your cost or your costs may not apply to your out of pockets maximum. This may cause beneficiaries to spend much more.
Medicare Advantage plans are too restricted in terms of service areas. Beneficiaries must reside in the plan’s service area for at least 6 months to have access to the service. For people who are always on the move, this will be difficult to meet.
Medicare Advantage plans coverage for some services and procedures may require a doctor’s referral and plan authorization. As a way of avoiding misuse of healthcare by any means necessary, Medicare advantage plans require prior authorization and or referrals for hospital stays, home health care, medical equipment, and certain complicated procedures. This could prove costly in certain situations.
Medicare Advantage plans may change every year. Such changes may affect your premium, deductibles, copayments, coinsurance, and the scope for additional services.
Beneficiaries are always responsible for copayments and coinsurances, and sometimes even for deductibles. Thus, the cost may be quite high, exceeding out-of-pocket limits of $6,000 per year.

HOW TO SWITCH FROM ADVANTAGE PLAN TO ORIGINAL MEDICARE

One frequently asked question has been – can I switch from Medicare advantage to original Medicare. The answer is Yes you can.

You can leave your Medicare advantage plan and return to traditional Medicare Part A and Part at 2 particular intervals:

During Open Enrollment Period (October 15^th – December 17^th)
During the Medicare Advantage Disenrollment Period (January 1^st – February 14^th)

In the Medicare enrollment period, enrollees will have until Feb 14^th to pick up Part D plan for prescription drug coverage. During this period, you cannot move from Medicare advantage plan to Original Medicare and vice versa. Coverage usually starts on the 1^st day of the month after the month in which you switch coverage.

You can, however, leave your Medicare Advantage plan and return to Original Medicare Part A and Part B at any time. Just ensure you give your managed care plan a 30-day written notice and they will notify Medicare.

You’ll be required to pay a monthly premium for Part B once you’re enrolled back to Original Medicare. The charge for most people is $96.40 but if your income is over $82,000 ($164,000 for a couple) your monthly premium will be slightly higher.

Most people have their monthly premium deducted from their social security check. For those who do not collect social security, Medicare will bill them for the premium. There are, however, no premiums for Part A for most persons.

DOES ORIGINAL MEDICARE COVER AMBULANCE SERVICES

We do not pray for such occurrences that will require us to be carried in an ambulance but its best to prepare for any eventuality. Ambulance services are very crucial when there is a health emergency and you need to get to the hospital in the shortest possible time.

Luckily, Medicare Part B (Medical Insurance) covers the cost of ground Ambulance services for emergency and some non-emergency situations. Emergency transportation to a hospital, critical access hospital, or skilled nursing facility is available when you have a sudden medical emergency and other means of transportation aren’t safe.

However, Medicare only covers such costs when you’re taken to a nearby facility within your service area.

Medicare will only cover your emergency ambulance transportation when:

You’re in shock or bleeding profusely
You need skilled medical attention and treatment during transportation

Medicare may pay for ambulance transportation in an airplane or helicopter to a hospital if you need immediate and rapid ambulance transportation that ground transportation cannot provide.

There are cases where Medicare covers the cost for non-emergency ambulance transportation if you have a written order from your doctor stating that ambulance transportation is medically necessary.

ORIGINAL MEDICARE VISION COVERAGE

Original Medicare Part A and Part B offers limited vision coverage, and you may not get the necessary coverage for most routine eye care. It may cover some diagnostic and preventive vision screenings in certain cases, such as:

Glaucoma Screenings: Medicare Part B covers for glaucoma screenings once a year if you’re at high risk for glaucoma. You’re considered high risk for glaucoma if; you have Diabetes; have a family history of glaucoma; you’re an African American who is above 50; you’re Hispanic American who is 65 years or older
Diabetic Retinopathy Screening: while Medicare doesn’t cover routine eye exams, Part B covers an annual vision exam to check for diabetic retinopathy. You can only get cover for this exam if; you’re enrolled in Medicare Part B; you have diabetes; the exam is performed by an eye doctor who is legally authorized to do it in your area.
Macular Degeneration test and treatment: Age-related macular degeneration is the leading cause of vision loss among older individuals, according to the National Eye Institute. Medicare Part B covers vision tests to diagnose macular degeneration and provide medically necessary treatment, including outpatient prescription drugs. most persons with Medicare Part B and age-related Macular degeneration are covered. Eligible persons only need to pay 20% of the Medicare-approved fee for prescription drugs and outpatient services.
Eye prostheses: Medicare covers eye prostheses (artificial eye) for beneficiaries without an eye or who have eye shrinkage due to birth defects, vision trauma, or surgery. Medicare part B also provides coverage for the polishing and resurfacing of your artificial eye. Medicare will pay for its replacement once every 5 years.

ORIGINAL FEE-FOR-SERVICE MEDICARE

Fee-for-service is a system whereby a health service provider is paid separately for every particular service rendered. Original Medicare is a good example of fee-for-service coverage.

In this regard, Medicare pays its share of an approved amount up to certain limits while the Medicare beneficiary pays the rest. There’s usually a fee charged for each service.

There are also some Medicare Advantage plans that operate on a fee-for-service basis.