Choosing between the two main types of Medicare is perhaps the biggest decision that Medicare recipients face.
Deciding to go with Original Medicare or Medicare Advantage is not a one-time decision, either. Recipients must make it when they first enroll in Medicare, and they have an opportunity to switch from one type of Medicare to the other during open enrollment periods.
For those struggling with this decision during the current Medicare open enrollment period — which started Oct. 15 and runs until Dec. 7 — a recent Insurance.com survey might provide some insight.
The survey found that folks with Original Medicare are most likely to give their satisfaction with their coverage the highest possible rating.
By that measure, Original Medicare beat out not only the other main type of Medicare, Medicare Advantage plans, but also other types of health insurance coverage, such as employer-based plans.
For the survey, about 1,000 people were asked to rate their satisfaction with their health insurance coverage on a scale from 1 to 5, with 5 being the best possible rating.
Among survey respondents with Original Medicare:
- 43% rated their satisfaction with their coverage a 5 out of 5.
- 39% rated it a 4 out of 5.
- 0% rated it a 1 out of 5.
Among respondents with a Medicare Advantage plan:
- 37% rated their satisfaction with their coverage a 5 out of 5.
- 35% rated it a 4 out of 5.
- 7% rated it a 1 out of 5.
By comparison, 39% of those with employer-based plans and 14% of those with individual or Affordable Care Act plans, for example, rated their satisfaction a 5 out of 5.
Insurance.com notes that non-subsidized individual plans tend to be more expensive than Medicare and employer-based coverage, which likely contributed to the low ratings of individual and Affordable Care Act plans.
Medicare is a federal health insurance program that primarily serves seniors. Like Social Security, it’s subsidized in part by federal payroll taxes. And employer-based insurance is effectively subsidized in part by employers.
Original Medicare versus Medicare Advantage
Original Medicare, as its name implies, is the traditional Medicare program. It’s offered directly by the federal government. Medicare Advantage plans are an alternative to the traditional program. They are offered by private insurance companies.
Medicare Advantage plans must cover all the health care services and products that Original Medicare covers, but Medicare Advantage plans are allowed to offer additional benefits.
For example, while Original Medicare does not come with prescription drug coverage, 90% of Medicare Advantage plans for 2020 offer it, according to a recent Kaiser Family Foundation analysis.
Medicare Advantage plans often are considered to be not just more inclusive but also more affordable than Original Medicare. One way Medicare Advantage plans reduce their costs, however, is by being more restrictive.
For example, they may limit you to one particular network of doctors and only cover care from in-network doctors.
Medicare Advantage plans also require prior authorization more often than Original Medicare does, according to a 2018 analysis. As we explain in “8 Services Medicare Advantage Won’t Cover Without Preapproval“:
“Prior authorization requires enrollees to get approval from the plan before accessing a particular health care service. If the plan does not approve the service beforehand, the plan might not pay for the service — leaving the patient on the hook for the cost.”
Should you switch?
Deciding whether to switch from Original Medicare to a Medicare Advantage plan, or vice versa, should not be done lightly. Switching can carry risk.
Say you switch to Medicare Advantage. You might not be able to continue seeing the same doctor and still have the visits covered.
If you have Original Medicare with a supplemental policy, also known as a Medigap policy, and you switch to Medicare Advantage, you could risk losing your supplemental coverage if you later decide to switch back to Original Medicare.
When you switch back, you won’t necessarily be able to get the same Medigap policy back — or get a new Medigap policy at all — for reasons we detail in “4 Dangers for First-Time Medicare Enrollees.”
In short, be sure to do your research before switching up your Medicare coverage.
If you haven’t already done your homework for the current Medicare open enrollment period, start by rounding up these resources:
- Medicare.gov — particularly the Medicare Plan Finder feature
- 2020 “Medicare & You” handbook
- Evidence of Coverage document
- Plan Annual Notice of Change document
Then, remember that free help is available. As we detail in “6 Things That Are ‘Free’ With Medicare“:
“People who are eligible for Medicare as well as their families and caregivers have access to free in-depth, one-on-one insurance counseling and assistance from State Health Insurance Assistance Programs (SHIPs).”