When enrolling in Medicare, patients have two options for medical, hospital, and prescription drug coverage:
Option 1: Original Medicare + PDP (with Medigap option)
Medicare beneficiaries can choose to receive medical and hospital coverage through "Original Medicare" (Parts A and B) and enroll in a stand-alone Medicare Part D plan (PDP). If patients decide to enroll in a stand-alone PDP with Original Medicare, they also have the option to sign up for a supplemental plan, aka "Medigap", to help cover certain expenses such as deductibles and coinsurance.
Option 2: Medicare Advantage (NO Medigap option)
The other option is to enroll in a Medicare Advantage plan, also known as "Part C," which is a combination of medical, hospital, and drug coverage all in one plan. Advantage plans are run by private companies that contract with Medicare. The patient would still have Parts A and B covered through Medicare (so they still pay their regular Medicare Part B premium), but they receive all of their medical, hospital, and drug benefits directly through this private company.
- Patients enrolled in Medicare Advantage are NOT eligible to enroll in a Medigap plan.
- Patients with a Medigap plan who, during Open Enrollment, decide to enroll in a Medicare Advantage plan will automatically be dropped from their Medigap plan and lose that additional coverage.
Pros and cons:
Pros of Original Medicare with a stand alone Part D plan (PDP):
- The patient can see any doctor or go to any hospital that is contracted to accept assignment with Medicare. This option allows the broadest possible choices in doctors and other providers.
- Patients don't need prior approval or a referral to see a specialist or have a procedure.
Additional pros if the patient enrolls in a Medigap plan:
- Patients can mix and match with Medigap and Part D coverage as they so desire.
- Often low copays or no copays for medical care.
Cons of Original Medicare with a stand-alone Part D plan:
- Expensive medical care if a Medigap plan isn't purchased. Original Medicare (Parts A and B) has deductibles, a 20% coinsurance for medical and hospital coverage, and no out-of-pocket cost limit.
- Original Medicare does not cover vision, dental, or hearing. The patient would need to sign up for a separate supplement.
Additional con if the patient enrolls in a Medigap plan:
- Medigap plans require an additional (usually high cost) monthly premium
Pros of Medicare Advantage plans:
- Advantage plans usually have set, low copays for doctor visits, hospitalization, and other medical services.
- They have out-of-pocket cost limits for hospital and medical coverage.
- Many (but not all) Advantage plans offer dental, hearing and/or vision coverage.
Cons of Medicare Advantage plans:
- Advantage plans have limited doctor and hospital networks.
- Advantage plans usually require a referral to see a specialist and prior approval by the plan for medical procedures.
Generally, Medicare Advantage plans offer lower copays and monthly premiums, but much less flexibility when it comes to receiving specialized care. If you don’t have any medical conditions, a Medicare Advantage plan is likely the best option for you. Original Medicare with a Medigap policy offers much more flexibility for specialized care. If you see several doctors and have chronic medical conditions, you will likely receive better overall coverage through Original Medicare with a Medigap policy, but will have to pay a more costly monthly premium.
Looking to compare Medicare Advantage plans? Here is a step by step guide.