The health insurance landscape, including coverage plans provided by the government, can be complicated to navigate. Medicare vs. Medicare Advantage, for example, have similar names but several distinct differences in terms of care coverage and benefits for patients.
“One of the more common questions I get from my patients about their coverage are the differences between Medicare Advantage vs. just Medicare,” he says.
Medicare vs. Medicare Advantage
Medicare is the federal health insurance program that covers people 65 years of age or older, certain younger people with disabilities and patients with end-stage renal disease. The coverage is broken down into four distinct parts: A, B, C, and D.
Part A is hospital insurance, which covers in-hospital stays, care in a nursing facility and certain home health care services.
Part B is medical insurance, which covers certain doctor services, outpatient care, preventive care and medical supplies.
Part C, otherwise known as Medicare Advantage, is a plan in which a private company contracts with Medicare to provide Part A and Part B benefits. These plans include health maintenance organizations (HMO), preferred provider organizations (PPO), private fee-for-service plans, special needs plans, and Medicare Medical Savings Account Plans.The majority of Medicare Advantage plans offer Part D coverage, which includes prescription drugs.
Patients need to carefully review the details of both plans and weigh them against their own health circumstances to ensure they’re making the best choice for themselves.
Costs. Regular Medicare patients have to pay Medicare premiums, deductibles and coinsurances. The coinsurance rate for regular Medicare is fixed at 20% of the cost of the service. Medicare Advantage charges Medicare premiums as well as the other plan’s premium, if applicable. The other plan has its own set of rules for co-pays and deductibles.
Supplemental insurance. Regular Medicare patients need to have supplemental insurance to make up the difference for what Medicare won’t cover, while Medicare Advantage patients don’t need to do this.
“When a patient has regular Medicare insurance they have to have a secondary insurance that they’ll buy separately because Medicare only pays for 80% of the cost, while the secondary insurance will pay 20% of the remaining cost,” explains Dr. Patel. “With the Medicare Advantage insurance, the patient only pays a single free on a monthly basis and does not need a secondary insurance.”
Extra services. Medicare only covers medically-necessary inpatients and outpatient services and does not cover extra services like routine vision checks, hearing or dental care.
Freedom to see providers nationwide. Patients with regular Medicare can visit any health provider that accepts Medicare. Patients with Medicare Advantage, however, must check with their HMO and PPO networks to see which providers are covered under those plans.
Referrals for specialists. Patients with Medicare don’t need to get a referral in order to see a specialist, while patients covered under Medicare Advantage typically have to procure a referral from their primary care provider to see a specialist.
“The major difference between Medicare Advantage and Medicare is you do need to pick a particular doctor as your primary care doctor,” Dr. Patel says. “You do not have to do this with regular Medicare.”
Prescription coverage. Patients with Medicare who need prescription drug coverage can buy a separate Part D plan. Most Medicare Advantage plans include Part D coverage.
Out-of-pocket limit. Regular Medicare has no out-of-pocket maximum and there’s no limit to what patients can spend on healthcare. Medicare Advantage plans have an annual out-of-pocket limit, which can be expensive but helps to protect patients who require expensive care. The plan covers all expenses once the limit is reached.