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 | 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.
Georgene Collins, RICP®, RN, PhD, MBA is a registered nurse turned Financial Advisor at Airey Financial Group. Georgene helps other nurses take control of their finances and prepare for retirement. Georgene began her career with Airey Financial Group in 2017 after retiring from 30 years in healthcare.
Georgene holds the Retirement Income Certified Professional (RICP®) designation from The American College of Financial Services. She holds health and life insurance licenses and a long-term care certificate in Indiana and Illinois. Georgene is a Registered Representative and Investment Advisor Representative and has earned the FINRA Series 63 and 65 registrations.