Medicare is made up of 4 coverage parts but there are two paths you can take to get access to the coverage. The two paths to choose between are Original Medicare or Medicare Advantage. In this post we will compare the pros and cons of each path.
The 4 parts are A, B, C & D. Part A is coverage for hospitals, skilled nursing, hospice, and some health. Part B is coverage for doctor’s services, lab test, medical equipment, and preventative services. Part C is Medicare Advantage and Part D is drug coverage.
If you choose Original Medicare, then you get Parts A & B through Medicare. You can then add a stand-alone Part D Plan for prescription drugs. Additionally, you can purchase a Medicare Supplement policy to help cover deductibles and co-pays.
If you choose Medicare Advantage, then you still have to pay your part B premium, but you get all of your insurance through the Medicare Advantage plan. Part C (aka Medicare Advantage) includes Parts A and B and usually Part D.
If you join a Medicare Advantage Plan, then you’re not eligible to purchase a Medicare Supplement policy.
|Original Medicare||Medicare Advantage|
|Insurance through Medicare||Insurance through private companies|
|No network. Valid anywhere in country that accepts Medicare.||Network of Doctor’s and Hospitals|
|Standardized coverage.||Each company can offer different benefits|
|If you add on Part D and Medicare Supplement, then you have an additional premium vs. the Medicare Advantage that has low or no premium.||Lower up-front cost|
|Less out of pocket.||More out of pocket.|
|No add on benefits.||Some plans have extra benefits for things like dental and vision after open enrollment.|
Switching from one path to the other is possible but you’ll want to carefully consider these key factors before selecting your path.
- There are only certain periods during the year when you can switch.
- If you choose Original Medicare, then you can add a Medicare Supplement policy at any time.
- Although you can add a Medicare Supplement policy at any time, you could be subject to health underwriting once you pass your initial open enrollment period.
Why is this important? Say you started with a Medicare Advantage plan while you were healthy but developed some health issues causing your out of pocket expenses under your Medicare Advantage Plan to add up. You now want to switch to a Medicare Supplement policy. Unfortunately, you could be denied coverage under a Medicare Supplement plan due to health underwriting.
Medicare Advantage does offer a 12-month period when you first sign up during which you can switch back to Original Medicare with a Medicare Supplement if you are not satisfied with no health underwriting. But this is only a one time 2-month maximum trial period.
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