Traditional Medicare versus Medicare Advantage - dummies

Traditional Medicare versus Medicare Advantage

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You do need to do some homework to make an informed decision about getting your health care from traditional Medicare or a private Medicare Advantage plan — and, if you choose the latter, about the kind of plan you prefer. The more thoroughly you understand the differences among all these choices, the more likely you’ll be content with the one you pick.

Whichever way you choose to go, one thing is certain: You’re still under the big umbrella of Medicare. As a whole, about 50 million people are enrolled in the program. Of these, just under three-fourths (73 percent) are in traditional Medicare, and just over a quarter (27 percent) are in a Medicare Advantage plan, according to the Kaiser Family Foundation, a leading health care research organization.

The figure shows at a glance the main differences between traditional Medicare and the two types of MA plans that are chosen by 93 percent of people enrolled in the Medicare Advantage program: HMOs and PPOs.

Comparing MA HMOs/PPOs and traditional Medicare.
Comparing MA HMOs/PPOs and traditional Medicare.

Traditional Medicare is the program you’re in unless you opt for one of the private plans.

  • Eligibility: You must have Part A or Part B (or both). To receive services, you can live anywhere in the United States or its territories.

  • Choice of doctors and hospitals: You can go to any doctor, hospital, or other provider that accepts Medicare patients (and is accepting new ones) anywhere in the country. You don’t need a referral from a primary care doctor to see a specialist.

  • Extra benefits: Traditional Medicare covers many kinds of health care, but by no means does it cover all the services you’re likely to need. For example, it doesn’t cover routine hearing, vision, and dental care. Medigap supplemental insurance may provide a few extra benefits, such as emergency care abroad, depending on the policy you buy.

  • Prescription drugs: Traditional Medicare covers only drugs administered in hospitals, doctors’ offices, and clinics. You need to enroll in a private stand-alone Part D plan and pay an additional premium to get coverage for outpatient drugs you use at home.