People eligible for Medicare can choose between two main ways to receive their health coverage: Original Medicare and Medicare Advantage. The Centers for Medicare and Medicaid Services explains that these options operate under distinct rules regarding networks, costs and benefits. Both options cover most medically necessary services.
Doctor and hospital choice
Under Original Medicare, patients can visit any doctor or hospital that takes Medicare anywhere in the United States. In most situations, individuals do not need a referral to see a specialist. Patients may pay more if a doctor does not accept assignment.
Medicare Advantage plans operate differently. Patients need to use doctors and facilities within the plan’s network and service area for non-emergency care, according to the Centers for Medicare and Medicaid Services. Some plans offer out-of-network coverage for non-emergencies, but it may cost more, and patients may also need to get a referral before seeing a specialist.
How costs compare
Individuals with Original Medicare typically pay 20% of the Medicare-approved amount for Part B-covered services after meeting a deductible, and they pay a monthly premium for Part B. There is no yearly limit on out-of-pocket costs under Original Medicare unless a person has supplemental coverage like Medigap, Medicaid, or employer, retiree or union coverage. Individuals can purchase supplemental coverage or use existing coverage to help limit their out-of-pocket costs.
Medicare Advantage patients pay the monthly Part B premium and may also pay an additional premium for the plan itself. Some Medicare Advantage plans feature a $0 premium and may help pay part of the Part B premium. These plans include a yearly limit on out-of-pocket costs, meaning patients pay nothing for covered services for the remainder of the year once that limit is reached. Patients enrolled in Medicare Advantage cannot buy Medigap policies.
Coverage and extra benefits
Both options cover most medically necessary services in hospitals, clinics and doctors’ offices. Original Medicare does not cover certain services, including routine physical exams, eye exams and most dental care. Individuals with Original Medicare can join a separate plan to receive prescription drug coverage.
Medicare Advantage plans must cover all emergency care and almost all medically necessary services included in Original Medicare. These plans bundle the coverage and generally include prescription drug coverage, meaning patients do not need a separate drug plan. Medicare Advantage plans may also offer extra benefits for vision, hearing and dental services, though they may require prior authorization before covering certain supplies or procedures.
Care outside the United States
Original Medicare generally does not cover medical care outside the United States. Individuals with Original Medicare may be able to buy a Medigap policy to cover emergency care abroad. Medicare Advantage plans also generally exclude international medical care, though some plans provide extra benefits for emergency services during international travel.