Medicare Advantage vs. Medicare: What’s the Difference?

Quick Answer

There are some major differences between Medicare and Medicare Advantage. Out-of-pocket costs, provider networks, coverage limitations and prescription drug coverage are among the factors to consider when making a decision.

Shot of a senior couple reviewing Medicare plans with a doctor at home

Getting older has its perks. Three months before the month you turn 65, you can sign up for Medicare, a government health insurance program for people aged 65 and up. One big decision to make when joining Medicare is whether to sign up for original Medicare or Medicare Advantage. There are several key differences between Medicare Advantage and Medicare, such as varying out-of-pocket costs and maximums, what services are covered, whether you're limited to a provider network and whether prescription drug coverage is included. Here's what you should know to make the right decision for you.

How Does Medicare Work?

Original Medicare includes Part A (hospital coverage) and Part B (medical coverage).

Part A covers care in hospitals and skilled nursing homes, as well as hospice care and some home health care services.

Part B covers medically necessary doctors' visits, outpatient care, medical supplies, ambulance services and durable medical equipment. It also pays for mental health services and preventive care, such as vaccinations and annual wellness checks.

To cover prescription medications, you can buy a Medicare drug plan (Part D).

Medicare doesn't cover 100% of your medical expenses; you'll still have out-of-pocket costs, like copays and coinsurance. However, you can buy a Medicare supplement Insurance plan, called Medigap, to help cover these.

How Does Medicare Advantage Work?

Medicare Advantage plans (Part C) meet all of Medicare's requirements. Instead of being administered by the federal government, however, they are sold by private insurance companies. Medicare Advantage bundles Part A, Part B and (in most cases) Part D into one plan. The most common types of Medicare Advantage plans are Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs).

Most Medicare Advantage plans pay for services that original Medicare doesn't cover. More than 98% of Medicare Advantage plans offer eye exams and glasses, hearing exams and hearing aids, telehealth visits and fitness benefits; 96% offer dental services, according to the Kaiser Family Foundation.

Medicare Advantage is growing in popularity. Nearly half (46%) of people on Medicare chose Medicare Advantage as of 2022, according to the Commonwealth Fund, up from 27% 10 years prior.

Medicare vs. Medicare Advantage

Here's a closer look at the differences between Medicare and Medicare Advantage.


Medicare and Medicare Advantage Coverage Options
Original Medicare Medicare Advantage
Basic coverage Medically necessary healthcare services, supplies and equipment from hospitals, doctors and other health care providers. Some health care services, such as vision exams and dental care, are not covered. All the same services, supplies and equipment as original Medicare are covered. Medicare Advantage typically also covers vision, hearing and dental services.
Prescription drug coverage Prescription drug coverage is not included, but you can purchase a Medicare drug plan, Part D, to get it. Most plans include prescription drug coverage.
Prior approval requirements Healthcare services and supplies are typically covered without the need to get prior approval. Many plans require prior approval before they will pay for healthcare services or supplies.


Provider Options

Medicare and Medicare Advantage Provider Options
Original Medicare Medicare Advantage
Provider choice You can get healthcare from any hospital or healthcare provider that accepts Medicare, anywhere in the country. Except for emergency care, you typically have to use hospitals and providers in your plan network to be covered.
Specialist access You can usually visit a specialist without a referral. You might need a referral to visit a specialist.



Medicare and Medicare Advantage Costs
Original Medicare Medicare Advantage
Out-of-pocket costs After meeting your deductible, you'll typically pay coinsurance of 20% of the cost of care. Your out-of-pocket costs can vary depending on the type of health care service.
Monthly premiums You'll pay a monthly premium for Part B, and a separate premium for Part D if you choose to buy it. Costs can vary. You'll pay a monthly premium for Part B and may also pay a plan premium; on the other hand, some plans charge no premium and pay some or all of your Part B premium. Drug coverage (Part D) is typically included in the plan, so there's no separate premium for it.
Out-of-pocket maximums The amount you can pay out-of-pocket for health care is unlimited. You can buy Medigap to help pay these costs for Part A and Part B. There is an annual cap on out-of-pocket costs for medical services. After you reach the cap, Medicare Advantage pays 100% of your covered services for the rest of the year. Different plans may have different limits; however, the government sets an annual cap. For 2023, annual out-of-pocket costs can't be more than $8,300 for in-network services and $12,450 for both in- and out-of-network services.


Should I Choose Medicare or Medicare Advantage?

In general, people report being equally satisfied with Medicare and Medicare Advantage, according to the Kaiser Family Foundation. How can you choose the right one for you? Here are some factors to consider.

When to Choose Original Medicare

  • You don't want to be limited to doctors or hospitals in your network.
  • You don't want to get a referral to visit a specialist.
  • You prefer a simpler approach vs. comparing different private Medicare Advantage plans.
  • You travel around the country and don't want to worry about finding an in-network provider if you need healthcare away from home.
  • You have another health insurance plan (such as retiree health insurance or coverage through a partner's job) that reduces your out-of-pocket costs and/or includes dental and vision coverage. You may lose this coverage if you choose Medicare Advantage; check with your plan to find out.

When to Choose Medicare Advantage

  • You prefer getting the same coverage that original Medicare Part A, Part B and Part D offers in a one-stop bundle.
  • You want an annual ceiling on your out-of-pocket healthcare costs.
  • You want coverage for services such as dental care, vision exams and glasses, hearing exams and aids, telehealth consultations and fitness benefits that original Medicare doesn't pay for.

Making Healthy Choices

You can switch from one Medicare Advantage plan to another or switch back to original Medicare if you choose. However, if you opt for Medicare Advantage when you're first eligible for Medicare and switch to original Medicare later, you may have to pay higher premiums for Part D and Medigap for the rest of your lifetime. Get free advice on which Medicare plan makes sense for you from your State Health Insurance Assistance Program (SHIP), by calling 1-800-MEDICARE or by using Medicare's live chat tool.

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