Original Medicare/Medicare Supplement vs. Medicare Advantage Pros & Cons
Before I begin the comparison, a brief explanation between these two ways you can access your Medicare coverage, may be helpful. First, to be eligible for full Medicare benefits under either method, you must be enrolled in both Medicare Parts A & B. Most everyone is automatically enrolled in part A, but unless you are receiving Social Security benefits, you must sign-up for Part B. For instructions on how to sign-up for Part B, click here.
Once enrolled in Parts A & B, unless you decide otherwise, you are automatically enrolled in Original Medicare. It is called Original Medicare, because it is the same program that was created by congress and passed into law in 1965. Original Medicare is run by the Federal government. Your healthcare claims are processed and paid by Medicare. A Medicare Advantage plan is not run by the Federal government, but it is run by an insurance company. Medicare Advantage insurance companies receive money from Medicare and they then administer their plan.
¹ Medicare Advantage plans are also called Part C. In 1965 Medicare Parts A & B were established with Original Medicare. In 1997, Part C was established making it possible for insurance companies to offer Medicare plans;
² These are the 2018 monthly premiums in the Greater Sacramento Region;
³ Original Medicare has deductibles and copays when you receive care. Medicare Supplement “Plan F” will “Supplement” and pay for all Medicare deductibles and copays;
⁴ Medicare Advantage plans also have deductibles and copays. When the sum of all your deductibles and copays for the year, equal your maximum out-of-pocket claims risk, then you pay $0.00 for the remainder of the year;
⁵ Most Medicare Advantage plans may offer some type of Dental, Vision or Hearing coverage. These additional benefits are typically quite limited;
⁶ You will need to buy a separate Medicare Part D prescription drug plan (PDP)
Conclusion
I am sure that back in the 1990’s, insurance companies were thrilled that Medicare Part C was enacted and given the name Medicare “Advantage”. Free advertising! What is the true advantage? There is really only one… price. I would never advise anyone to enroll in Original Medicare unless they simultaneously purchased a Medicare Supplement plan. Original Medicare without having a supplement plan, could prove to be financially catastrophic. You’ll pay more for a Medicare Supplement plan than you do for a Medicare Advantage plan. Plus, you need to pay extra for a Prescription Drug plan. The typical monthly savings for a Medicare Advantage plan over Original Medicare is about $125/month. I understand that $125/month can be a lot for some people on Medicare, but you get a lot more for the extra $125:
Far more freedom you use the doctors and hospitals you want;
Less financial risk if you get sick;
Coverage anywhere in the US;
Foreign travel protection;
More custom designed Rx plan
Terpstra Benefits sells both types of plans. We represent most all of the top-rated plans. In fact, we make more money selling Medicare Advantage plans than we do Medicare Supplement plans. We are independent agents and help those on Medicare and those who will be enrolling in Medicare, with all of their Medicare needs. We’ll help guide you through this very important decision. There is never a charge for our help. Whether you buy direct our use our service, the cost to you is the same.