Medicare Advantage vs. Original Medicare: how to decide

Everyone on Medicare makes this choice, and it's worth making on purpose rather than by default. Neither option is better for everyone. It comes down to how you use care, where you live, and how much financial risk you're comfortable with.

Original Medicare

This is Part A (hospital) and Part B (medical), run by the federal government. You can see any doctor or hospital in the country that accepts Medicare, usually with no referrals.

The downside is that there's no yearly cap on what you pay. After the deductible you generally owe 20% of the cost of most Part B services, with no limit. That's why most people on Original Medicare add two things:

• a Medigap (Medicare Supplement) policy to cover most of that 20% and other gaps
• a stand-alone Part D plan for prescription drugs

Medicare Advantage (Part C)

These are private plans approved by Medicare that replace Parts A and B for you. Most include drug coverage, and many add dental, vision or hearing benefits. Many have a $0 plan premium, though you still pay your Part B premium.

The trade-offs:

• Networks. HMOs usually only cover in-network care except emergencies. PPOs cover out-of-network care at a higher cost.
• Prior authorization. Plans often require approval before some services, including nursing home rehab stays.
• A yearly limit. Every plan has an in-network out-of-pocket maximum. Once you hit it, the plan pays 100% of covered in-network care for the rest of the year. Medicare sets the highest limit a plan can use, and many plans set theirs lower.

The Medigap catch

This is the part people wish they'd known. You have a one-time six-month window to buy a Medigap policy without health questions, starting the month you're 65 or older and enrolled in Part B. After that, in most states, insurers can turn you down or charge more because of your health.

So if you pick Medicare Advantage now and want to switch back to Original Medicare with Medigap later, you might not be able to get Medigap. There are limited exceptions, like a "trial right" if you joined Medicare Advantage when you first got Medicare, and a few states have broader protections.

A rough way to think about it

• Lean toward Original Medicare + Medigap if you want any doctor anywhere, travel a lot, have serious health conditions, or want predictable costs and can afford the Medigap premium.
• Lean toward Medicare Advantage if your doctors and preferred hospital are in a plan's network, you want lower monthly costs, and you're comfortable with networks and prior approvals.

Whichever you choose, check that the hospitals, nursing homes and home health agencies you'd want are covered. You can look up their quality ratings here before you decide.