A Medicare beneficiary has two main options available to them when they sign up for Medicare. They can either choose to be covered by original Medicare or go with Medicare Advantage. What’s the difference between them? Is it possible to switch plans if the one you choose doesn’t work for you? Read on for a comparison of these two plans and find one that works for you.
What is Original Medicare?
Original Medicare is often referred to by names like “Traditional Medicare” or “fee-for-service” Medicare. It encompasses Medicare Part A and Part B. Part A covers care inside of the hospital while Part B covers outside of the hospital care for the most part.
Since Part A is known as hospital insurance because it mostly covers services you receive in the hospital or related to your hospital stay. It includes care you would receive in a skilled nursing facility and home health care, where nurses, physical therapists, and aides come to offer skilled care at your home if needed. Part A also pays for hospice care for terminally ill people. Part B Medicare is the part that covers preventive services. This includes things like doctor’s visits, screenings, and lab tests. Vaccines are also covered under Part B as well as outpatient hospital services.
Traditional Medicare allows beneficiaries to go to any hospital they want and to see any doctor or go to any skilled nursing facility or outpatient clinic that takes Medicare. It can be combined with Medigap insurance, a supplemental plan, to reduce your out-of pocket-costs and Medicare Part D plans can be added to help cover the cost of medications. While traditional Medicare can be used everywhere in the US, it has no limit on out-of-pocket costs.
Annual enrollment periods each year allow beneficiaries to choose between traditional Medicare and Medicare Advantage plans so you aren’t stuck with coverage that doesn’t work for you.
What is Medicare Advantage( Medicare Part C)?
Medicare Advantage is similar to private insurance because the plans are offered by private companies. It is known as Medicare Part C. These companies contract with the Federal Government and are paid a fixed amount to provide services. The most common plan types are HMO, PPO, and fee-for-service. Under Medicare Advantage, you are still enrolled in Medicare but you will most likely pay premiums each month for Medicare Part A and Part B. Rules and benefits do vary depending on the type of plan you have and your plan may be limited to the area you live in.
The advantage to Medicare Advantage is that its plans must have a limit to out-of-pocket costs. For 2020 that limit is $6,700. Additionally, plans can have benefits like vision and dental or caregiver training and counseling and in-home care which are not covered by traditional Medicare. These benefits do vary depending on the plan. You can also still enroll in Medicare Part D for prescription drug coverage. However, you may be limited in the doctors you can see. They typically must be within a plan’s network of providers.
People who receive health coverage through an employer or a union may be automatically enrolled in a Medicare Advantage plan sponsored by them. While you do have the option to stay in the plan, choose another, or go to Original Medicare, you could lose coverage or see it reduced.
What if I Don’t Like the Medicare Plan I’ve Chosen?
You can always change it during open enrollment. Each year between October 15 and December 7, Medicare beneficiaries are encouraged to look at their current insurance plans. During this period, they can switch to a new Medicare Advantage plan, change over to original Medicare, or stay with the same plan.
If you have Medicare Advantage or sign up for it during the open enrollment period, you can change plans if the chosen plan doesn’t meet your needs. The Medicare Advantage Open Enrollment period opens January 1 and goes through March 31st. It allows you to switch to a new plan or go back to original Medicare if you want to.
What if I Don’t Know What Plan to Pick?
It can be challenging to know what Medicare option will work best for you because of the many options. Whether you’re still working and were enrolled in Medicare automatically or are looking for an option that will fit your healthcare goals, talk with MedicareWise. Our staff of Medicare experts can help walk you through available options to find the best plan for you.
