Traditional Medicare
Medicare is a federal health insurance program primarily covering acute care services for individuals 65 and older. It also covers individuals younger than 65 with certain disabilities and those with end-stage renal disease. It's important to note that Medicare requires beneficiaries to share in the cost of their healthcare.
Usually this means Medicare covers 80% of the healthcare costs and the patient is responsible for 20%. Most of the time patients choose to have a secondary insurance that covers that 20%, whether that's through the VA, Medicaid, or another private insurer like Aetna or Humana.
Medicare Advantage Plans
Medicare Advantage (MA) plans are offered by private insurance companies approved by Medicare. These plans provide all the benefits of Original Medicare (Part A and Part B), and often include additional benefits like prescription drug coverage (Part D), vision, dental, and hearing services.
Key Differences
Here are some key differences between Medicare and Medicare Advantage:
- Plan Structure: Medicare is a government-run program, while Medicare Advantage plans are offered by private insurance companies. So when it comes to credentialing, even if you are already registered as a Medicare provider, you also need to be credentialed with the private insurance companies in your area that offer Medicare Advantage programs to be in-network with those clients.
- Costs: Original Medicare has premiums (paid monthly), deductibles (the amount you pay for the year before the insurance covers the costs), and co-insurance (the 20% of each healthcare bill that's owed). Medicare Advantage plans often have lower premiums but may have higher out-of-pocket costs for some services, deductibles and co-insurance.
- Provider Networks: With Original Medicare, you can generally see any doctor who accepts Medicare. Medicare Advantage plans usually have a group of doctors. You may need to see doctors in that group to get the full benefits and pay the least amount of money.
- Additional Benefits: Original Medicare covers primarily hospital and medical services, but in a consistent, predictable way. Medicare Advantage plans often include additional benefits like prescription drug coverage, vision, dental, and hearing, but those benefits often change yearly.
- Supplemental Benefits: Beginning in 2019, Medicare Advantage plans have been able to offer supplemental benefits that cover non-medical services, such as in-home modifications and adaptive equipment. This is still fairly rare and highly restricted. But it's worth checking to see if your client has any of these benefits and how to use them.
The Takeaway
When choosing between Original Medicare and a Medicare Advantage plan, it's essential to consider individual needs and healthcare preferences. Factors to consider include current health needs, budget, and preferred doctors. It's impossible to predict how much healthcare you'll use when you are enrolled in Medicare. However, talking to a Medicare expert who sells plans from all the different brands can help clients decide clearly what might be best for the next year.