Your Basic Coverage Options: Original Medicare vs. Medicare Advantage vs. Medicare Supplement

Original Medicare includes the two parts of Medicare offered by the federal government: Part A (hospital insurance) and Part B (medical insurance). You can see any doctor in the country who accepts Medicare, you don’t need referrals, and Medicare is your primary insurer.

With Original Medicare, you are responsible for paying your Part A and Part B deductibles, as well as 20% of your medical costs. 

If you want Part D (prescription drug coverage), you must enroll in a separate prescription drug plan.

Medicare Advantage plans are offered by private health insurance companies, and include Part A, Part B, and usually Part D. Your primary insurer is the plan, and you may have a choice between plan types (for example, HMO or PPO). Typically, you must see doctors within the plan’s network.

Medicare Advantage plans often offer coverage for items and services that Original Medicare does not cover. These vary by plan, but they may include benefits such as vision, dental, hearing aids, gym memberships, message therapy, and more.

This option adds supplemental insurance (offered by private health insurance companies) on top of Original Medicare. Medicare continues to be your primary insurer, you can see any doctor in the country who accepts Medicare, and you don’t need. Your supplemental insurance will cover additional services that Original Medicare does not. 

Generally, Medicare Supplement plans have higher monthly premiums than Medicare Advantage plans, but fewer services require a copay. (What is a copayment?)

Medicare Supplement plans do not include Part D coverage, so you must enroll in a separate prescription drug plan if you want drug coverage. 

Timeline note: If you don’t enroll in a Medicare Supplement plan within 6 months of when you first get Part A and Part B, you may not be able to enroll in a plan later, or you may pay more for it. Generally, you need to enroll in Part A and Part B before you can enroll in a Medicare Supplement plan.

When determining which plan is right for you, it helps to weigh several factors:

• Your health – Original Medicare may not provide enough coverage for your health needs. (What does Original Medicare cover and not cover?) Both Medicare Advantage and Medicare Supplement plans provide coverage for items and services that Original Medicare does not.
• Your budget – How often do you visit a doctor, specialist, or hospital?
  • Original Medicare covers only 80% of your medical expenses after your deductible is met—meaning the remaining 20% is your responsibility. Additionally, there are no limits on your out-of-pocket spending, and both Parts A and B have a deductible. (What do these terms mean?)
  • Medicare Advantage plans cover everything Original Medicare covers, plus offer additional benefits. These plans often limit your out-of-pocket spending, and may be available with $0 deductibles and monthly premiums as low as $0.
  • Medicare Supplement plans typically have higher monthly premiums than Medicare Advantage plans, but fewer services require a copayment. If you have a larger budget, or if you see your doctor more frequently, it may be worth it to pay more each month in exchange for lower doctor visit copays.
• Prescription drug coverage: All-in-one vs. shopping around – Do you want a plan that includes Parts A, B, and D in the same plan (Medicare Advantage), or would you prefer to shop for your Part D plan separately? Neither Original Medicare nor Medicare Supplement plans include Part D coverage.
• Seeing your doctor – With Original Medicare and a Medicare Supplement plan, you can see any doctor that accepts Original Medicare, and you don’t need a referral to see a specialist. But there are different types of Medicare Advantage plans (for example, HMO and PPO), and this changes how you see your doctor. With an HMO plan, you have a primary care provider (PCP) who oversees your care, and you typically need a referral to see a specialist. With a PPO plan, you do not have a PCP, and you do not need a referral to see a specialist. You may receive services in- or out-of-network, but services received out-of-network may be more costly.