Original Medicare, which includes Part A coverage and Part B coverage requires payments in the form of monthly premiums, annual deductibles, copays, and coinsurance.
Medicare Advantage plans, otherwise known as Medicare Part C, are offered through private insurers and typically bundle Parts A and B together along with Part D (prescription drug coverage).
There are differences in how you pay for Original Medicare versus Medicare Advantage. Medicare Advantage plans are offered through private insurers and have their own costs. However, because you must first enroll in Medicare Part A and Part B before you can enroll in Medicare Advantage, you still need to pay the costs associated with those two parts of Medicare. With Medicare Advantage, premiums can be as low as $0 and provide extra benefits that Original Medicare may not cover, such as some routine exams, vision, hearing, and dental services, depending on the plan you choose.
However, depending on the coverage included within your Medicare Advantage plan, you may have to pay higher out-of-pocket fees or meet a deductible before your plan begins to cover the rest of your medical or prescription drug coverage.
Finally, with Medicare Advantage, you may pay coinsurance, which is a percentage of costs of a covered health care service after meeting your deductible. Or you may pay copayments, a preset out-of-pocket amount you are obligated to pay for each medical service you receive, such as for a doctor’s visit or prescription medication.
In short, both of these plans are structured differently, and so are their costs. With Original Medicare, you may be subject to 20 percent coinsurance after meeting your deductible, copays, no limits to out-of-pocket expenses, and no added benefits (vision, hearing, dental services). Depending on what you are looking for, you may want to enroll in either a Medicare Advantage or Medigap plan to put a cap on out-of-pocket expenses, to include the added benefits, including drug coverage, which some may prefer. If you are enrolled in Original Medicare with a Medigap plan, you will still need to add Part D coverage separately.