The Pros and Cons of Original Medicare, Medicare Advantage, Medicare Supplement Insurance and Medicare Part D

Over 59.6 million Americans are enrolled in Medicare as of April 2019.1

Such a large number of beneficiaries rely on some type of Medicare health coverage, but what are some of the benefits and drawbacks Medicare beneficiaries may face?

This guide takes an in-depth look at both the advantages and disadvantages of Medicare. We look at the potential benefits and disadvantages of:

  • Original Medicare (Part A and Part B)
  • Medicare Advantage plans (Part C)
  • Medicare Supplement Insurance (Medigap) plans

New to Medicare? Find Medicare Advantage plans in your area

Compare Plans

Or call TTY Users: 711 24/7 to speak with a licensed insurance agent.

A smiling couple embraces while sitting outside on a sunny day

What are the advantages of Medicare?

Some of the potential advantages of Original Medicare coverage include:

Low monthly premiums

Most people receive Medicare Part A (hospital insurance) without having to pay a premium.

Medicare Part B (medical insurance) is optional. The standard Part B premium is $135.50 per month in 2019.

By comparison, the average cost of a Silver plan under the Affordable Care Act (Obamacare) marketplace for a 64-year-old was $1,123 per month in 2015.2

Broad eligibility

To be eligible for Medicare Part A and Part B, you typically must be:

  • At least 65 years old
  • A U.S. citizen or a legal permanent resident for at least five years
  • Under age 65 but have a qualifying disability or condition, such as Lou Gehrig’s Disease (ALS) or End-Stage Renal Disease (ESRD)

Broad acceptance

Medicare is accepted by more than 90 percent of physicians.3

Medicare may be used in all 50 states and the District of Columbia. Medicare Part A and Part B overage can also be used in:

  • Puerto Rico
  • S. Virgin Islands
  • Guam
  • American Samoa
  • Northern Mariana Islands

What are the disadvantages of Medicare?

Original Medicare can include a few disadvantages, which can include some of the following.

No vision, dental, hearing or retail prescription drug coverage

Medicare Part A and Part B cover a wide range hospital and medical benefits, but they still leave many things not covered.

Original Medicare doesn’t typically cover items or services such as:

  • Prescription drugs
  • Routine dental care or dentures
  • Routine vision care or eyeglasses
  • Routine hearing care or hearing aids
  • Fitness club or gym memberships

In order to get coverage for some of the benefits listed above, Medicare beneficiaries can consider enrolling in a Medicare Advantage plan that includes some or all of these benefits.

Out-of-pocket costs

Medicare Part A and Part B include out-of-pocket costs that beneficiaries should consider.

  • In 2019, you must meet your Part A deductible of $1,364 per benefit period before your Part A coverage kicks in. You could potentially pay additional coinsurance costs of up to $682 per day in 2019 for inpatient hospital stays of over 90 days.

    Though this is a rare situation, it’s worth considering.

  • Medicare Part B includes a deductible of $185 per year in 2019. After you meet your Part B deductible, you are typically responsible for paying 20 percent of the Medicare-approved cost for your covered services or items.

  • There is no cap on this 20 percent coinsurance or copayment, which means you could potentially face high out-of-pocket costs for your Part B medical care services.

Medicare beneficiaries can consider enrolling in a Medicare Supplement Insurance plan that can help cover some of their out-of-pocket Medicare costs, such as certain deductibles and copayments.

No out-of-pocket limit

Original Medicare does not have an out-of-pocket limit. This means that Medicare beneficiaries have no limit to the amount of money they may be required to pay out of their own pocket for covered health care services in a single year.

All Medicare Advantage plans include an out-of-pocket spending limit.

Certain Medicare Supplement Insurance plans also include an out-of-pocket spending cap.

It is better to have Medicare Advantage or Medigap?

Medicare Advantage plans and Medicare Supplement Insurance (Medigap) are not the same thing. You cannot have a Medicare Advantage plan and a Medigap plan at the same time.

Medicare Advantage plans are an alternative to Medicare Part A and Part B. Medicare Advantage plans must cover at least the same benefits as Original Medicare.

One advantage of joining a Medicare Advantage plan is that some plans also cover things like prescription drugs and routine vision and dental care.

You can also choose from different types of Medicare Advantage plans, such as health maintenance organization (HMO) plans and preferred provider organization (PPO) plans, depending on where you live.

Some Medicare Advantage plans also offer $0 monthly premiums, and all Medicare Advantage plans include an annual out-of-pocket spending limit.

Find $0 premium Medicare Advantage plans in your area

Compare Plans

Or call TTY Users: 711 24/7 to speak with a licensed insurance agent.

What are the pros and cons of Medicare Supplement Insurance?

Medicare Supplement Insurance plans can help cover certain Medicare deductibles, coinsurance, copayments and other out-of-pocket expenses faced by Medicare beneficiaries.

One advantage of Medigap plans is that all 10 standardized Medigap plans that are sold in most states cover Medicare Part B coinsurance or copayments, at least partially.

Depending on the types of Part B services you receive and how often you need them in a year, this could help save you money.

Another advantage of Medigap plans is that they are accepted by every doctor and health care provider who accepts Medicare.

One disadvantage of Medicare Supplement insurance is that insurance companies aren’t required to sell Medigap policies to people younger than 65.

Some states do require insurance companies to sell Medigap to people under 65, but even in those cases, you could pay higher premiums if you are younger than 65. Check with your state’s department of insurance to learn more about Medigap rules where you live.

How do I sign up for a Medicare Advantage plan?

A licensed insurance agent can help you compare Medicare Advantage plans that are available in your area.

You can review information such as plan costs, prescription drugs that might be covered by the plan and whether your doctor is part of the plan’s provider network.

 

Find Medicare Advantage plans in your area

Compare Plans

Or call TTY Users: 711 24/7 to speak with a licensed insurance agent.

Copyright © 2019 TZ Insurance Solutions LLC. All rights reserved.

Centers for Medicare and Medicaid Services. Medicare Enrollment Dashboard. Retrieved May 14, 2019, from www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Dashboard/Medicare-Enrollment/Enrollment%20Dashboard.html.

Wu, Jonathan. How Age Affects health Insurance Costs. (Feb. 10, 2015). ValuePenguin. Retrieved from www.valuepenguin.com/how-age-affects-health-insurance-costs#nogo.

Boccuti, Cristina; Fields, Christa; Casillas, Giselle; Hamel, Liz. Primary Care Physicians Accepting Medicare: A Snapshot. Kaiser Foundation (Oct. 30, 2015). Retrieved from www.kff.org/medicare/issue-brief/primary-care-physicians-accepting-medicare-a-snapshot.

MedicareAdvantage.com is a website owned and operated by TZ Insurance Solutions LLC. TZ Insurance Solutions LLC and TruBridge, Inc. represent Medicare Advantage Organizations and Prescription Drug Plans having Medicare contracts; enrollment in any plan depends upon contract renewal.

Plan availability varies by region and state. For a complete list of available plans, please contact 1-800-MEDICARE (TTY users should call 1-877-486-2048), 24 hours a day/7 days a week or consult www.medicare.gov.

Medicare has neither reviewed nor endorsed this information.