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Posted 01/31/2022 in Category 1

Is Medicare Advantage the Same as Medicare?

Is Medicare Advantage the Same as Medicare?

Is Medicare Advantage the Same as Medicare?

Understanding Medicare lingo is nearly as difficult as learning an entirely new language. Many terms get repeated with minor variations, and Medicare contains an entire alphabet soup of plans. But, then, there's a matter of how Medicare is structured - a whole separate web to untangle!

Original Medicare consists of two parts: A and B. Medicare Advantage takes those two parts, throws in some extra benefits, and wraps them all into one plan. This concept makes it hard to understand the differences between the two types of coverage.

We're going to unravel that today.

What Is Original Medicare?

As we mentioned, Original Medicare contains Parts A and B.

Part A is hospital insurance and helps pay for room and board costs associated with an inpatient hospital stay. Most Medicare beneficiaries receive premium-free Part A, but deductibles and coinsurance costs apply to your Part A coverage. The Part A deductible in 2022 is $1556 per benefit period. The Part A coinsurance costs will depend on how many days you've been in the hospital. The first 60 days are completely covered by Part A once you've met your deductible. After that, you'll have a coinsurance cost each day of your stay.

Part B is outpatient insurance and helps pay for doctor visits, diagnostic tests, surgeries, durable medical equipment, and preventive services. Everyone pays a monthly premium for Part B. The standard premium is currently $170.10. (Hgh income earners will pay more.) The Part B deductible is $233 and must be paid once per year. Once you've met your deductible, Part B has an 80/20 split, which means you'll pay 20% of the cost of covered services.

If you choose not to enroll in Medicare Advantage, you will likely want to supplement your Part A and B coverage. A Medicare supplement will provide coverage for the "gaps" in Original Medicare. It will help pay for the remaining costs once Parts A and B have paid their share.

An important thing to understand is that a Medicare supplement (also called a Medigap plan) will not pay for any service that is not also covered under Original Medicare. If the service isn't covered by Parts A or B, your supplement will not cover it. There are no extra benefits in these plans. However, the most popular Medigap plans will cover most of your out-of-pocket costs left by Parts A and B.

Another thing you'll want to consider is a Part D prescription drug plan; otherwise, you'll have no coverage for medications. Lastly, many individuals who want coverage for routine dental, vision, and hearing services choose to enroll in a DVH plan. If you're counting, we're up to four separate insurance plans now!

What is Medicare Advantage?

A Medicare Advantage Plan takes all those benefits we just mentioned and wraps them into one convenient package.

Private insurance companies offer Medicare Advantage (Part C) plans, so each plan can vary greatly. However, every MA plan must offer the same coverage found in Parts A and B. Aside from that, they can add in additional benefits like dental care, vision and hearing services, gym memberships, transportation services, and more. They can also include prescription drug coverage.

Part C plans offer benefits directly from a private insurance company, but you still have to pay the premium for Medicare Part B. Then, you'll pay an additional premium for your Part C plan, but they are often very affordable.

Medicare Advantage Plans are not offered everywhere and vary by geographic location. There are typically networks in which an MA plan member will need to receive care to have coverage. (Your plan will either belong to an HMO (Health Maintenance Organization) or a PPO (Preferred Provider Organization) network.) This is quite different from Original Medicare and Medicare supplement insurance, which can be used anywhere in the country.

There are many things to consider when choosing between Original Medicare and Medicare Advantage. You should consult with a licensed insurance agent before choosing which option is best for you.