Medicare Advantage Vs. Medicare

You’re probably already familiar with Original Medicare, especially if you’re nearing the age of 65 and getting ready to enroll. You may not be aware, though, that there are some gaps in Original Medicare’s coverage, which lead many people to either add a Medicare Supplement Plan or choose a Medicare Advantage Plan. Medicare Advantage Plans, also known as Medicare Part C, are very similar to Original Medicare. However, there is a slight difference between the two, mainly that Medicare Advantage Plans offer more coverage than Original Medicare.

caucasian hand over an older caucasian hand bringing it towards blocks
Medicare Part B covers physical therapy, doctor visits, and more. 

Original Medicare Overview

Medicare is a government health insurance program consisting of:

  • Part A– Hospital insurance that covers hospital stays, skilled nursing care facilities, hospice care, and limited home healthcare services.
  • Part B– Medical insurance that covers preventive services, doctors’ office visits, flu shots, physical therapy, durable medical equipment, diabetes screening and supplies, and mental health care.

In most cases, you will not pay a monthly premium for Medicare Part A; the Medicare taxes that you paid while you were working are what pay for Part A. However, Part A does have a deductible, coinsurance, and co-payments. 

Part B, on the other hand, does have a monthly premium: the Medicare Part B premium for 2020 is $144.60, but could be higher depending on your income. Like Part A, Part B also has a deductible, coinsurance, and co-payments for most services. Medicare Part B covers 80% of your costs, meaning you will need to pay the remaining 20% of any bills. 

Medicare Advantage Overview

Medicare Advantage is an “all-in-one” alternative to Original Medicare. Private insurance companies approved by Medicare can offer Medicare Advantage Plans. Unlike Original Medicare, most Medicare Advantage Plans include prescription drug coverage, and some plans offer more benefits, like routine dental or hearing care. In order to be eligible for Medicare Advantage, you have to be enrolled in Medicare Part A and Part B. You must also live in the plan’s service area, and you cannot have end-stage renal tag with the words low price on itMedicare Advantage Plan premiums differ from plan to plan. Many Medicare Advantage Plans have low-cost, or even $0, premiums. The average Medicare Advantage premium is only $30 a month. Remember, you will still have to pay your monthly Medicare Part B premiums in addition to any Medicare Advantage premium.

The Similarities

All Medicare Advantage Plans have to offer at least the same benefits as Medicare Parts A and B do. This means that if Original Medicare covers hospital care at a certain level, then so will a Medicare Advantage Plan.

The Differences

The benefit of Medicare Advantage Plans is that they offer more coverage than Original Medicare. The following chart breaks down the differences between the two:

Mutual of Omaha Plans To Sell Medicare Advantage Plans in 2019

In 2019, Mutual of Omaha, an Omaha-based insurer will begin selling Medicare Advantage plans with prescription drug coverage. They have partnered up with Lumeris, a St. Louis company that will handle the health provider networks, and healthcare solutions.

The Kaiser Family Foundation recorded that one in three Medicare recipients are enrolled in a Medicare Advantage plan. They project the number to rise to nearly 41 percent by the year 2027.

Omaha is introducing Medicare Advantage Plans in 2019.
Omaha is introducing Medicare Advantage Plans in 2019 to provide options for seniors.

The Plan

James Blackledge, the Mutual Chairman and CEO said “Our entrance into the Medicare Advantage market represents a significant step forward for Mutual of Omaha as we strive to respond to customer needs and offer a meaningful suite of senior health solutions. We’re confident that our collaboration with Lumeris will lead to better health outcomes for our Medicare Advantage customers.”

Mutual started in 1909, and has been one of the first providers of Medicare Supplement plans. But recently Medicare Supplement plan sales have been declining, while Advantage sales have increased.

Lumeris has over 10 years of experience with Medicare Advantage plans, even starting their own called Essence Healthcare, which has about 65,000 members in the St. Louis area. They have built a value-based model to provide seniors with better health for a lower cost while providing a better patient and physician experience. The company functions to help other medical providers deliver better care and financial outcomes by its value-based care model.

The idea is to create more plans so that Medicare beneficiaries can save money, and receive better care.
The idea is to create more plans so that Medicare beneficiaries can save money, and receive better care.

“Our new initiative with Mutual of Omaha is exciting because it enables both of our companies to build on our successes while remaining laser-focused on what matters most—delivering the highest quality care to seniors,” said Lumeris Chairman and CEO Mike Long. “This new partnership also leverages each company’s unique strengths to benefit the larger healthcare ecosystem. Together, we will make a deeper, more meaningful difference in the lives of patients and providers.”

Hopeful Future

The alliance between the companies will allow Mutual of Omaha to continue to lead in the senior health market. Mutual will provide Medicare Advantage plans, while Lumeris will evaluate markets, and establish networks.

A Mutual executive vice president, Brad Beuchler said that the plans will have narrow networks. The networks will be limited as to how many physicians, hospitals and care providers to choose from. This way there will be reduced costs while improving efficiency and medical outcomes.

The multiyear agreement is expected to be ready by Medicare open enrollment October 15, and the plans taking effect January 1, 2019. This will hopefully provide better healthcare quality with lower costs for seniors.

Medicare Advantage Plans Have A $0 Premium For Most

When it is time to consider Medicare, usually around the time you turn 65 years old, it would be wise to take a look at different Medicare Advantage plans. Medicare Advantage plans, also known as Medicare Part C, usually offer more benefits than Original Medicare for a lower cost. About one-third of Medicare beneficiaries have chosen to go with a Medicare Advantage plan, and it is projected to be almost 34% more in the upcoming years. The reason for this estimated rise and popularity is due to how many benefits you get at such a low cost, in fact, many plans have a $0 premium.

prescription drug bottles
Medicare Advantage Plans will cover things that Original Medicare does not, such as prescription drug coverage. 

How Medicare Advantage Works

Medicare Advantage plans are offered by private insurance companies that are approved by Medicare. MA plans include both Medicare Part A and Part B. When you enroll, you continue to pay your Part B premiums, and you have a separate monthly premium for having the Medicare Advantage plan (Part C plan). The Part C plan offers the same benefits offered by Original Medicare along with medically necessary procedures, prescription drug coverage and other benefits like vision and dental.

You must have Medicare Parts A and B to join an MA plan. You must also live in the plan’s service area, and you must not have End-Stage Renal Disease (ESRD).

Different Medicare Advantage plans:

  • Health Maintenance Organization (HMO)
  • Preferred Provider Organization (PPO)
  • Private Fee-for-Service (PFFS)
  • Special Needs Plans (SNPs)
  • HMO Point-Of-Service (HMOPOS)
  • Medical Savings Account (MSA)

How Cheap Medicare Advantage Costs

hundred dollar bills inside a glass jar.
Medicare Advantage Plans will help you save money, especially since most plans have a $0 premium.

If you worked for at least 10 years and paid Medicare taxes, then your Part A premiums are free, if not you will pay a monthly premium. The standard Part B monthly premiums for 2018 is $134, but may be higher depending on your income. For a Medicare Advantage plan (Part C), you pay very little. Around 81% of Medicare enrollees have the option of a $0 premium plan. If you do end up paying $0, you may be responsible for paying higher cost sharing such as copays, coinsurance, or deductibles (which is determinant on the plan you choose).

The average Medicare Advantage plan premium in 2018 will be around $30, and can range anywhere from $0 to $200 a month. An example of how affordable these plans are, are the estimated monthly premiums of different Advantage plans in 2017. HMO monthly rate was around $28, the Regional PPO plan was $41, and the Local PPO was around $55.

All Medicare Advantage plans include a yearly Maximum Out-of-Pocket amount. This amount is the maximum you will pay out of pocket for covered services within a year. When this limit is met, your plan will cover 100% of the costs for the rest of the year.

Need Help?

Medicare’s Open Enrollment is October 15-December 7 every year, which is when you can enroll into a Medicare Advantage plan. EZ.Insure will answer any questions you might have regarding the different plans, and guide you through the process. Start saving on Medicare costs with a low costing, or $0 premium Medicare Advantage plan! Our agents are trained and knowledgeable on the plans in your area. To start saving, contact an agent by entering your zip code in the bar above, email, and call 855-220-1144. What’s even better, is you get all this help from our agents free of charge. Our goal is to help you save and provide you with the best customer service possible.