Medicare vs. Medicare Advantage
There are many costs involved when choosing healthcare. Recently, we heard about Medicare Advantage and wondered what’s the difference between Medicare and Medicare Advantage? Let’s take a look and find out.
With Medicare, you get your benefits directly from the federal government. Medicare includes two parts, Part A and Part B, that provide your hospital and medical insurance. If you have a qualifying work history, your Part A benefits are premium-free. If you’re a high earner (less than 5% of people), you pay an income-related adjustment in addition to the Part B premium.
Since Medicare is managed by Uncle Sam, the benefits are exactly the same for everyone who enrolls with no waiting periods or limitations on pre-existing conditions.
Part A covers inpatient care when you are admitted to a hospital or skilled nursing home. It also covers hospice care and certain kinds of home health care. Part B pays for outpatient expenses like behavioral health visits to psychologists and counseling, lab tests and doctor visits. It also covers medical equipment like home oxygen supplies and walkers.
You can use any healthcare provider within the nearly 1 million physicians who accepts Medicare. However, you have to enroll in a separate prescription plan (Part D). Moreover, there is no limit to out of pocket expenses which could get quite costly.
Medicare Advantage is most like the health insurance that you had during your working years. They have networks and you pay for healthcare services as you need them. Technically, it’s part of Medicare as Part C, but private insurance companies administer and sell the plans so it’s not managed or sold by Uncle Sam. How does this affect you personally? Well Medicare Advantage plans have different copays, different networks and varied drug formulas to determine reimbursement. Since 2003, there are now 22 million people enrolled in Medicare Advantage compared to more than 60 million enrolled in Medicare.
There are two common types of Medicare Advantage Plans—HMO’s and PPO’s. They have to offer equal benefits under Medicare but often offer additional coverage like dental care or routine vision checks or gym memberships.
It’s difficult to determine your costs with a Medicare Advantage plan because each one is different. Each PPO or HMO can choose what to charge for deductibles, premiums, and copayment amounts. However, Medicare Advantage plans have a maximum out-of-pocket limit or MOOP. Once you hit your MOOP, you pay nothing for covered healthcare for the rest of that calendar year unlike Medicare where your costs can go on and on.
Strangely, if you have end-stage renal disease, you’re not eligible for Medicare Advantage.
Still not sure which health plan to sign up for? The best option is to talk to a reputable Medicare insurance broker and ask a lot of questions. Know your medications and illnesses. If you make the wrong decision, you can always switch back!
Photo credits by Boomer Benefits and earth.com
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