Original Medicare and Part D VS Medicare Advantage

When enrolled in Medicare, there are 2 options to choose from for enhanced coverage:

  • Parts A & B (Original Medicare), Part D and potentially Medigap, or

  • Part C (Medicare Advantage Plan)

When comparing coverage, it is important to look at the two core options first: Original Medicare and Medicare Advantage. Note that Medicare Advantage plans come in many types (the most common are HMO and PPO) and must cover the same benefits as Parts A & B.

It’s also important to consider the potential to add a Medigap policy to Original Medicare to help cover some of the costs of Parts A & B. It is not possible to have both a Medigap policy and a Medicare Advantage plan.

Costs and coverage will differ between plans. Compare options holistically, taking into account desired coverage, premiums and routine out-of-pocket costs. Here are how the 4 major plan packages stack up in some key areas.

Original Medicare & Medicare Advantage Plans At-a Glance

When making the decision about which plan type to choose, there are other questions that can be investigated, below are a few key areas to compare:

Which option is more stable from year to year?

Each year, Part C (Medicare Advantage) plans choose if they want to stay in Medicare or not. They can also change costs and benefits each calendar year. In addition, the Affordable Care Act changed the way MA plans are paid, which may have an impact on the costs that beneficiaries pay. Original Medicare will always be there, but its deductibles increase slightly each year.

How can I measure quality for all of the various plans?

Medicare uses a 5-star rating system to assess the quality of Medicare Advantage and Part D plans, with 5 stars being excellent, 4 being above average and 3 being average. These ratings are based on a variety of factors, including how well the plans help members manage chronic diseases, member satisfaction and how often members get screening exams and vaccines, among others. The ratings are posted on the Medicare plan finder website.

What are the cost differences?

If enrolled in Parts A & B (Original Medicare), out-of-pocket costs include Part B premium and deductible and Part D premium if enrolled in Part D. Coinsurance is required by Medicare, which is generally 20% of the cost for a service. Many beneficiaries purchase supplemental Medigap insurance to cover some of their out-of-pocket costs.

If enrolled in a Part C (Medicare Advantage) plan, out-of-pocket costs include Medicare B premium, MA premium, copays and deductibles. There is a wide variation in the costs of these plans and in the benefits they offer. MA plans may have lower out-of-pocket costs than Original Medicare because they have a legal maximum limit on annual out-of-pocket costs. Still, limits vary by plan and can be fairly high. The maximum out-of-pocket limit is $6,700 in 2020.

If you want help comparing plans and pricing, see if you qualify to connect with a licensed Benefits Advisor.

Related Content

Original Medicare (Part A & Part B) Explained
Original Medicare, or Medicare Part A & Part B is sometimes called “Traditional Medicare” or “fee for service” Medicare.
A Guide to Enrolling in Medicare Part D
Enrolling in Original Medicare (Parts A and B) is mandatory, while prescription drug coverage (Part D) is optional. First, decide is Part D is this right fit.
What is Medicare Advantage/Part C Coverage?
Medicare Advantage (MA) also referred to as Part C plans are private health plans that have contracts with Medicare.

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