The Two Types of Medicare
Just to do a quick review of what we have learned so far, there are two types of Medicare. Much like with Thanksgiving Dinner when at the end of the meal you pick either pumpkin pie or pecan pie, with Medicare’s two types you pick either: Original Medicare with a Medigap Supplement (Usually Plan G) and a Standalone Prescription Drug Plan or Medicare Advantage which almost always includes your prescription drug coverage.
With the pie choice on Thanksgiving, you can have both pumpkin and pecan if you are so inclined, and many of us do request, “Cut me a slice of each.” With Medicare, though, you cannot have both Original and Medicare Advantage at the same time. You are not allowed to have a slice of pecan Medicare and a slice of pumpkin Medicare at the same time. You can, however, change from one type of Medicare to the other under certain rules and circumstances, such as during the yearly open enrollment period. This will be explained in the section on Plan Switches.
In a bullet-point summary, here is the reason why you might choose one or the other: Original Medicare, or Medicare Advantage.
Why You Would Pick: Medicare Advantage
- It’s usually the better value of the two choices. Medicare Advantage typically has no monthly premium, whereas a Medigap Supplement with Original Medicare will usually cost you over $100 each month.
- Prescription drug coverage is almost always included in your plan, whereas with Original Medicare, you will have to buy a stand-alone Prescription Drug Plan separately.
- Medicare Advantage includes lots of extras that you won’t get with Original Medicare. Most importantly, your plan usually includes some dental coverage, coverage for vision including an allowance for glasses, and usually hearing coverage as well. You will also likely get an allowance for Over-the-Counter-Products enabling you to get free over-the- counter drugs, vitamins, and even bandages and toothpaste. You also get free gym memberships with almost every plan.
- On the Tradeoff side: You will have some copays, such as for specialist visits and hospital stays. You will have a doctor network, which will eliminate you from using some doctors and specialty hospitals. With many plans, you’ll need a referral to see a specialist.
Why You Would Pick: Original Medicare (with a Medigap Supplement)
- You want more freedom and flexibility. You can see any doctor you want who takes Medicare (almost all do) and make appointments directly without a referral. Note: Some Medicare Advantage plans allow direct visits to specialists in-network as well.
- You do not have to worry about your doctor leaving the network.
- You can go to specialty hospitals and to doctors who take Medicare but are not in any Medicare Advantage plan networks. If you see several specialists it is often hard to find a Medicare Advantage plan that includes all your doctors. Original Medicare eliminates this problem.
- You can see doctors and go to hospitals anywhere in the USA on a routine basis, whereas with Medicare Advantage you can only go to Emergency Rooms (hospital visits when you’re in an emergency) or to Urgent Care Centers (if you have a less serious need).
- It’s easier to get second opinions because you can make appointments with specialists directly, without needing to get a referral.
- Your cost is capped at the amount of the monthly premium plus the annual deductible of $203 (for a Plan G), so you have cost certainty. With Medicare Advantage your copayments could be very small, as they are for most people, or if all went wrong they could go as high as the plan’s maximum out-of-pocket cost.
- On the Tradeoff side: You will pay for your Medigap plan (usually between $100 and $150 a month) which will also go up as a plan’s cost increases. You will have to buy a Prescription Drug Plan separately which is usually an included benefit with Medicare Advantage. You won’t get dental, vision, or hearing benefits, which you likely would with a Medicare Advantage plan.