Every fall, Medicare gives subscribers the option of switching from Original Medicare to Medicare Advantage. The open enrollment period typically starts on mid-October and runs until early December. It’s the only time all year when you can make this specific switch, so it can feel like a lot of pressure.
Should you switch? Shouldn’t you?
As is so often the case with health coverage selection, it depends on your circumstances and what types of plans you can afford.
As you may know, original Medicare has three parts and you enroll in each separately. Part A primarily includes hospital care, Part B covers outpatient services, and Part D covers prescription medication.
Medicare Supplement, also known as Medigap, covers some of what Original Medicare doesn’t. Medigap policies are sold by private insurance companies, and you have to have Medicare Parts A and B to sign up for Medigap. Medigap policies sold after 2006 don’t include prescription drug coverage and no Medigap insurance covers long-term care, vision care or hearing aids, dental care, or private-duty nursing.
Unlike Medigap, which works with an Original Medicare plan, Medicare Advantage takes the place of Original Medicare. Medicare Advantage plans include all standard Part A and Part B coverage. Most also include prescription drug coverage, which means you wouldn’t need Part D. Some have additional coverage such as dental, vision, and hearing care. Most Medicare Advantage plans fall into one of four basic categories:
Health Maintenance Organization (HMO) plans cover care from in-network providers, with particular exceptions including emergency services
Preferred Provider Organization (PPO) plans allow you to see any provider, but in-network providers tend to cost significantly less.
Private Fee-for-Service (PFFS) plans let you see any provider that accepts the terms of the plan. Some plans have networks that include providers who fit into this category.
Special Needs Plans (SNPs) require you to use in-network providers. They typically have specialists with particular expertise in the condition(s) that affect you.
Since insurance companies can design their own plans, provided that they cover at least what Original Medicare covers, the cost of Medicare Advantage varies significantly from one plan to the next. Contributing factors include each plan’s:
Premium, deductible, and copayment/coinsurance
Annual out-of-pocket maximum
Additional benefits available and whether they cost extra
Costs also depend on whether you qualify for state assistance. For instance, if you qualify for Medicaid, it will usually cover most of your health care costs.
Deciding whether to keep Original Medicare or switch to Medicare Advantage is a very personal decision. There’s a lot to consider, including your own care needs and budget. Here are some arguments on both sides, to help you get started with your decision.
Many Medicare Advantage plans include vision, hearing, and dental care. Original Medicare does not.
If you choose a policy with prescription drug coverage, you don’t need to sign up for Part D.
Original Medicare has no annual spending caps – you pay everything that Medicare doesn’t cover. Medicare Advantage plans are required to have these out-of-pocket caps, which protect you from the potentially high costs of serious illness or injury.
Medicare Advantage plans have different options for premiums, which is the amount you pay every month for coverage, and for deductibles, which tells you how much you’ll pay out-of-pocket before your insurance starts to pay. Some people prefer a higher premium and a lower deductible; others prefer the opposite. Original Medicare doesn’t let you choose.
As of 2019, some Medicare Advantage plans let you sign up for coverage for things like home meal delivery, appointment transportation, and even home safety protections like wheelchair ramps and shower grab bars.
Medicare Advantage now covers some care from home health aides who assist with activities of daily living.
You can switch Medicare Advantage plans without incurring a penalty if you switch within three months of signing up.
Medicare Advantage may charge you a premium beyond the standard Part B premium amount.
If you want to keep your current doctor, you may pay more out-of-pocket if the doctor is out of your plan’s network.
Original Medicare can make it easier for you to get coverage when you travel within the country. Medicare Advantage plans tend to have more local networks.
You can’t get Medigap coverage if you have Medicare Advantage.
Additionally, you usually can’t qualify for Medicare Advantage if you have End-Stage Renal Disease, with the following exceptions:
You receive an ESRD diagnosis when you already have Medicare Advantage
You already receive benefits from an insurer that offers Medicare Advantage
You no longer have ESRD but still qualify for Medicare Advantage
There is a Medicare Special Needs Plan (SNP) in your area that covers people with ESRD.
You are in a Medicare Advantage plan and have ESRD, but your plan stops offering coverage in your area.
If this last condition applies to you, you may select another Medicare Advantage plan. You can make this choice immediately or switch to Original Medicare and then switch back to Advantage later.
Choosing between Original Medicare and Medicare Advantage is a very personal decision. Some subscribers will pay more with Advantage; others do better with Medicare and Medigap. The best way to see what’s available to you is to compare plans that are available in your area. Do a cost comparison based on your current medical needs.
Remember that if you choose not to switch, you'll have another chance in a year. Even in Medicare, nothing is forever.