The Difference Between Medicare and Medicare Advantage Plans

Medicare insurance is a federal program for people aged 65 and older, as well as those with certain disabilities or chronic conditions. There are two main types of Medicare plans: traditional Medicare and Medicare Advantage plans. There are significant differences between traditional Medicare and Medicare Advantage plans. Because of this, navigating the Medicare federal health insurance program and choosing a plan can be difficult.

The key differences between traditional Medicare and Medicare Advantage Plans are flexibility and cost. Taking a proactive approach and researching the benefits of both plans can help you prevent any disruptions or unexpected costs related to services.

What is Traditional Medicare?

Traditional Medicare is a fee-for-service plan managed by the federal government. It consists of Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance). Part A covers inpatient hospital care, hospice care, and skilled nursing care (i.e., physical therapy, occupational therapy, and speech therapy). Part B covers doctor visits, outpatient care, and preventive services.

Traditional Medicare does not cover prescription drugs or certain other services, such as dental and vision care.

What are Medicare Advantage Plans?

Medicare Advantage plans on the other hand – also known as Part C – are offered by private insurance companies that have been approved by Medicare. These plans provide all the benefits of traditional Medicare, but they may also offer additional benefits, such as vision, dental, and hearing coverage.

Medicare Advantage plans often have lower out-of-pocket costs than traditional Medicare, but you must use doctors and hospitals within the plan’s network.

What’s the Difference Between Traditional Medicare and Medicare Advantage Plans?

One key difference between traditional Medicare and Medicare Advantage is the cost. With traditional Medicare, beneficiaries typically pay a monthly premium for Part B coverage, as well as deductibles and coinsurance for services. With Medicare Advantage, beneficiaries may pay a lower monthly premium, or no premium at all, but they may also be responsible for copayments and other out-of-pocket costs.

While Medicare Advantage plans may offer advantages like added services and perceived cost savings, they might not always provide the same level of coverage for skilled nursing care when compared to traditional Medicare. For example, if a resident of a nursing home switches from traditional Medicare to a Medicare Advantage not in the facility’s insurance network, this can result in needing to transfer the resident to another skilled nursing facility in an approved network. If the individual doesn’t have a secondary insurance plan, they may be responsible for coinsurance for the length of covered services. 

If you are currently enrolled in a Medicare Advantage Plan, you should carefully review the services covered by the plan, keeping in mind your current and future medical needs.

Which Plan Should I Pick?

There is no doubt that insurance is certainly complicated.  Ultimately, the decision of which option to choose depends on your individual needs and preferences. It’s important for individuals to weigh the benefits of added services against potential limitations in coverage for crucial services like skilled nursing services.

If you have any questions about Medicare or need help choosing a plan, please reach out to a Medicare counselor or Medicare Advantage plan representative.

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