Medicare Advantage (Part C) vs. Original Medicare (Parts A and B)

There are two general paths you can choose from to get your Medicare hospital insurance and medical coverage: Original Medicare (Medicare Part A and Part B) or Medicare Advantage (Medicare Part C). 

In 2022, nearly half (48%) of all Medicare-eligible Americans had a Medicare Advantage plan.¹ So what’s the difference between Medicare vs. Medicare Advantage, and why might you choose one over the other?

Who Runs Medicare?

Original Medicare consists of Medicare Part A and Part B and makes up the public sector of Medicare. Original Medicare is provided and managed by the federal government. 

Medicare Advantage plans are sold and managed by private insurance companies. The benefits these companies can offer and how the plans are administered must follow certain federal guidelines and laws, but they are free to experiment with new or different additional benefits and ways of administrating health care.

What Does Medicare Cover, and What Doesn't It Cover?

Original Medicare covers both inpatient and outpatient care at hospitals, skilled nursing facilities, clinics, doctor’s offices and more. It also covers durable medical equipment (DME), which includes things like wheelchairs, diabetes supplies and other medically necessary health care items and equipment.

Original Medicare, however, does not typically cover any of the following:

• Routine dental care
• Common vision care or prescription eyeglasses or contacts
• Routine hearing care or hearing aids
• Prescription drugs

By law, Medicare Advantage plans are required to provide all of the same coverage that is found in Original Medicare. This means that all Medicare Advantage plans are required to cover the same hospital benefits and medical insurance services that you would get from Medicare Part A and Part B.

Medicare Advantage plans then have some freedom to include additional benefits that are not found in Original Medicare. Most Medicare Advantage plans provide some coverage for the four types of benefits noted above (hearing, vision, dental and prescription drugs), and many include coverage for things like free SilverSneakers fitness program membership, non-emergency transportation, home meal delivery, home health and safety modifications and more.

In fact, according to national 2022 figures from the Kaiser Family Foundation:²

• 98% of Medicare Advantage plans covered telehealth
• 98% offered fitness benefits
• 96% covered routine dental care
• 99% offered eye exam and glasses coverage
• 98% covered hearing aids
• 84% paid for over the counter (OTC) items
• 71% provided some type of healthy meal benefit
• 39% covered transportation

Will My Doctor Accept My Medicare Plan?

Original Medicare is accepted by nearly every doctor or provider in the country. More than nine out of 10 doctors accept Medicare, and practically no matter where you go in the United States you won’t be far from a health care provider who accepts Original Medicare coverage.³ 

Original Medicare also travels with you. An Original Medicare beneficiary who lives in Florida may use their Part A and Part B coverage in California, New York or wherever they may travel within the U.S. and U.S. territories. 

Medicare Advantage plans typically operate on a more local or regional basis, where plan members may be generally required to receive their care within a network of participating providers in the county or state in which the plan member resides. You can usually receive some level of care outside of your plan network, though you may pay higher out-of-pocket costs than you would if you visited an in-network provider or facility.

What Types of Medicare Plans Are There?

Original Medicare benefits are one-size-fits-all and are standardized for all beneficiaries. 

Medicare Advantage plans, however, come in several different forms such as HMO, PPO or Special Needs Plans, which are tailored to the health care needs of people with specific conditions. And Medicare Advantage plans offer plenty of variety in terms of the benefits each plan offers. 

How Much Do Medicare Plans Cost?

While higher income earners may pay higher Medicare Part B premiums, most other Original Medicare costs are standardized across the board. Most people do not pay a premium for Part A, and the standard monthly premium for Part B is $170.10 per month in 2022. There are also deductibles, copayments and coinsurance associated with Original Medicare.

Because Medicare Advantage is provided by private insurers, the costs are not standardized and may vary based on plan carrier, location, plan benefits and more. The average monthly premium for a Medicare Advantage plan that includes prescription drug coverage in 2022 is $62 per month, and many plans are available with a $0 premium. $0 premium plans aren't available in every location, however.

Each Medicare Advantage plan typically have deductibles, copayments and coinsurance unique to that specific plan. In addition to $0 premiums, there are also some plans that offer $0 deductibles.

It should be noted that in order to be eligible for a Medicare Advantage plan, you must be enrolled in Medicare Part B. And that means you must pay the Medicare Part B monthly premium in addition to any premium that may be required by the Medicare Advantage plan. 

One other important note as it relates to cost: Original Medicare has no out-of-pocket spending limit. That means you have no protection against potentially high costs and are responsible for an infinite amount of out-of-pocket spending over the course of the year. 

Medicare Advantage plans, however, are required to include an annual out-of-pocket limit. For 2022, the limit is $7,550, and many plans may feature a spending limit that is lower than that maximum. 

Who Is Eligible for Medicare?

In order to be eligible for Original Medicare, you must meet each of the following criteria:

• You are 65 years old or are younger but have a qualifying disability or condition
• You are eligible to receive retirement benefits from Social Security or the Railroad Retirement Board or have been receiving disability benefits for at least 24 months 
• You are a U.S. citizen or permanent legal resident who has lived in the U.S. for at least 5 years

In order to be eligible for Medicare Advantage, you must:

• Be enrolled in both Medicare Part A and Part B
• Live in the service area of the plan you wish to join

Can I Combine Medicare Plans?

Original Medicare and Medicare Advantage are not the only types of Medicare coverage. There is also Medicare Part D which provides coverage for prescription drugs, and Medicare Supplement Insurance or “Medigap,” which helps pay for Original Medicare out-of-pocket costs. 

With Original Medicare, there are several coverage combinations you may be able to choose from, depending on what types of plans are available where you live: 

• Part A only
• Part A and Part B
• Part A and Part D
• Part A, Part B and Part D
• Part A, Part B and a Medigap plan
• Part A, Part B, Part D and a Medigap plan

With Medicare Advantage, you could potentially have either of the following coverage options:

• A Medicare Advantage plan
• A Medicare Advantage plan and a Part D prescription drug plan (only if the Medicare Advantage plan does not already include prescription drug coverage

It’s important to note that Medicare Supplement Insurance and Medicare Advantage plans are not the same thing, and you cannot have both types of plans at the same time.

How Do I Sign Up for MedicarE?

The first time you can enroll in Original Medicare during your Initial Enrollment Period (IEP). This period begins three months before you turn 65, includes the month of your birthday and continues for another three months, for a total of 7 months. However, you may also delay your Medicare enrollment if you are still working and not ready to transition to Medicare at age 65.

If you don’t sign up for Medicare during your Initial Enrollment Period, you may be able to enroll during the Medicare General Enrollment Period, which last from January 1 to March 31 each year.

Depending on your unique situation, you may qualify for a Special Enrollment Period, which can take place at any time during the year depending on your circumstances.

You may enroll in a Medicare Advantage plan during your IEP or during the Annual Enrollment Period (AEP, also called the Fall Medicare Open Enrollment Period) which lasts from October 15 to December 7 each year.

Some beneficiaries may also have the opportunity to enroll in a Medicare Advantage plan during a Special Enrollment Period which may be granted at any time throughout the year for those who experience a qualifying life change.

Is Medicare Advantage Better Than Original Medicare?

There is not one universal right or wrong answer when it comes to choosing Original Medicare vs. Medicare Advantage. 

If you want the freedom to travel and seek health care from any doctor or provider who accepts Medicare, and if you want the opportunity for more predictable health care spending with the help of a Medigap plan, Original Medicare may be the right choice for you. 

If you want to enjoy extra benefits such as dental, vision and drug coverage under one easy plan that also covers your hospital and medical benefits, if you want added protection against potentially high surprise medical bills, or if you want a plan that can offer customized coverage for a specific health condition, then a Medicare Advantage plan may better suit your needs.