Comparing Cost & Coverage of Medicare vs Medicare Advantage

Choosing between Medicare vs Medicare Advantage is often confusing.  While both cover medical expenses in retirement, the coverage and costs differ greatly.    In this article, we’ll explore Medicare vs Medicare Advantage to help you make an informed decision for your healthcare coverage in retirement.  But before we dig into Medicare vs Medicare Advantage, let’s review each one.

 

Medicare

Medicare is a federal program aimed at covering healthcare costs for anyone over 65 and some disabled people.   Medicare has 4 main parts, A, B, C, and D.  Medicare Part A covers hospital and some long-term care.  Medicare Part B is medical insurance.  It covers doctor and outpatient care, durable medical equipment, and preventive care, like wellness checks.  Medicare Part C is Medicare Advantage.  We’ll review Part C below.  Finally, Medicare Part D is bought separately to cover prescription drugs.

 

Medicare Advantage

Medicare Advantage plans are managed by private health insurance companies approved by Medicare.  And Medicare pays the insurance company for the care.  Medicare Advantage plans are an alternative to Medicare.  But the covered services are often different.  Let’s explore Medicare vs Medicare Advantage plans deeper.

 

           Comparison Chart of Medicare vs                             Medicare Advantage

	Medicare	Medicare Advantage
Hospital & Medical Coverage	Hospital and medical plans are separate	Combines hospital and medical into one insurance plan
Doctors and Networks	Any that accept Medicare	Restricted to plan; you may need referrals for specialist
Eligibility	Open to U.S. citizens and Legal Residents 65 and older and some disabled persons	Open to U.S. citizens and Legal Residents 65 and older and some disabled persons
*Enrollment	3 months before, the month of, and 3 months after you turn 65	When you become eligible for Medicare; special enrollment period (SEP); open enrollment period (OEP)-1/1/24 to 3/31/24; and annual enrollment period (AEP)-10/15 to 12/7.
*Switch Medicare vs Medicare Advantage and back	Annual enrollment period (10/15 to 12/7)-coverage starts 1/1 of following year	Annual enrollment period (10/15 to 12/7)-coverage starts 1/1 of following year
*Change Medicare Advantage Plans	Part A is typically free; premium may apply if worked less than 30 quarters.  Part B monthly premium is $164.90 in 2023	Vary by plan.  Some have low to no monthly premium
Out-of-Pocket Costs	Unlimited	Capped per plan
Coinsurance	Part A: $400 for days 61 to 90	Typically, 20% as approved by Medicare
Deductibles	Part B deductible $226 in 2023    Part A deductible $1600 in 2023 per inpatient episode	Varies by plan
Extra Benefits	None	May include dental, vision, hearing, and other benefits
Chronic Conditions and Special Needs Plans	None	Varies by plan

*Medicare.gov, January 2023 (Retrieved October 25, 2023).

Patient Satisfaction

Both Medicare and Medicare Advantage plans have similar levels of patient satisfaction with care, wait times, and finding a doctor (September 20, 2022).  But one concern where Medicare vs Medicare Advantage plans differ is where care is received.  A 2022 review of 62 studies, showed Medicare beneficiaries received care in the Highest-Rated hospitals compared to Medicare Advantage members.  And while Medicare Advantage plans manage prevention well, they may be problematic for those with complicated medical problems.

Conclusion

In conclusion, the decision between Medicare vs Medicare Advantage depends on your individual needs and preferences.  Consider your healthcare needs, budget, and preferred doctors and hospitals.  Medicare Advantage plans may have lower monthly premiums but could result in higher out-of-pocket costs in some cases.  And while Medicare has more predictable costs, you may need to buy additional coverage for prescription drugs and other services.  Consider speaking with a Financial Advisor who focuses on retirement planning for nurses to help you decide which coverage is best for you.

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Disclosure:

These concepts were derived under current laws and regulations. Changes in the law or regulations may affect the information provided.