Medicare and Medicare Advantage are both designed to provide medical care for elderly Americans. While these options do have some similar characteristics, there are a few differences between the coverages that they offer. Medicare is offered directly from the government while Medicare advantage is provided by private insurance companies.
Function
The purpose of both of these plans is to provide medical coverage to individuals over the age of 65 in the United States. When you turn 65, you can choose between the hospital and doctor coverage of the regular Medicare or you can choose a Medicare Advantage program. Both of these programs can help you get the majority of your covered health costs paid for, and both programs are partially subsidized by the government.
Basic Medicare
Under Medicare you will be contracting directly with the government for your health needs. Medicare Part A covers hospitals and nursing facilities. Coverage is automatic, though you must sign up for it, and there is no premium if you or your spouse qualify for Social Security benefits. Medicare Part B covers outpatient services like doctor visits, tests and some durable medical equipment. It is a fee-for-service plan for which you pay a premium, and the coverage is optional. Both Medicare Parts A and B are subject to a deductible and co-insurance.
Medicare Advantage Plans
Medicare advantage plans come in the form of health maintenance organizations (HMO), preferred provider organizations (PPO), private fee-for-service plans and special needs plans. Both HMOs and PPOs provide you with a network of medical facilities and doctors to choose from. With an HMO, you may have to go to specific facilities. With a PPO, you save money by going to the preferred providers, but you have the option to go elsewhere as well. In addition these plans may include coverages not included under traditional Medicare like vision care, dental care and even memberships for fitness clubs or gyms.
Prescription Drugs
Traditional Medicare recipients can choose to have prescription drug coverage under Medicare Part D, which requires a premium and co-insurance. They may find it less expensive to cover prescription medications through one of the private "medi-gap" plans that cover many of the costs not covered by traditional Medicare. If you need prescriptions on a regular basis, you will need to look at your options closely. Medicare Advantage plans may include prescription drug coverage.
Considerations
Traditional Medicare will not meet all medical expenses. Including deductibles and copays, individuals may end up paying thousands of dollars for hospitalization and major surgery. For this reason many individuals eligible for Medicare buy additional Medi-gap insurance coverage that is often available at relatively low cost.
Medicare Advantage plans may charge an additional premium on top of what you pay for traditional Medicare, however, they may cover additional services not covered by traditional Medicare. The providers may also be limited if you choose an HMO or PPO. Under the health care reform legislation passed in March 2010, the additional amount the government pays toward Medicare Advantage over traditional Medicare is set to be phased out over 10 years beginning in 2011. In that case, Medicare Advantage plans will most likely charge more or do away with some of the extra coverages they now offer, according to "The Christian Science Monitor."
Tags: Medicare Advantage, Medicare Advantage, Medicare Part, traditional Medicare, Advantage plans, Basic Medicare, covered traditional
