The Difference Between Medicare and Medicare Advantage

Decoding Medicare health insurance plan options can be daunting for beneficiaries. What is Medicare? Medicare is health insurance available for people ages 65 or older, younger people with disabilities and people with either Lou Gehrig’s disease (also called amyotrophic lateral sclerosis, or ALS) or end-stage renal disease (permanent kidney failure requiring dialysis or transplant).

Original Medicare comes in two parts: Part A and Part B. Part A covers a portion of hospitalization expenses, and Part B applies to doctor bills and other medical expenses, such as lab tests and some preventive screenings.

You might have wondered, “Is Medicare Part C the same as Medicare Advantage?” It is.

These plans are run by private insurance companies regulated by the government, and they must offer coverage comparable to original Medicare parts A and B. Most Medicare Advantage plans also include prescription drug coverage, Medicare Part D, available to beneficiaries who choose to enroll in original Medicare because original Medicare does not include prescription drug coverage. With original Medicare, patients are able to see any provider in the country that accepts Medicare with no restrictions.

[Read: Medicare Fall Open Enrollment: What You Need to Know.]

Medicare Advantage Plans

Some Medicare Advantage plans have a $0 monthly premium, while others come with a higher premium. Medicare Advantage plans are similar to individual health insurance policies you may have received through your employer or signed up for on your own through the individual insurance market in that they have different monthly premiums, provider networks, copays, coinsurance and out-of-pocket limits. The trade-off for a lower plan premium (or $0 premium) could include higher copays or coinsurance, smaller provider networks, more restrictions on the use of services, higher out-of-pocket limits or less generous coverage of prescription drugs. You must still continue to pay your Part B premium, which is $164.90 per month for most beneficiaries in 2023.

Whether or not a Medicare Advantage plan costs more, it could be more or less beneficial for you than original Medicare. Consumers have to carefully review the details of each plan and make a clear-eyed appraisal of their circumstances, including their health, budget and tolerance for financial risk.

[READ: What Is a Health Savings Account?]

The Pros and Cons of Medicare Advantage Plans vs. Original Medicare

Prescription Drugs

As stated, original Medicare doesn’t cover prescriptions unless you enroll in a stand-alone prescription drug plan (Part D). (The monthly cost of Part D is projected to range from $6 to $111 — an average of $31.50 — per month, based on annual income, in 2023.)

About 86% of Medicare Advantage plans include prescription drug coverage, according to the Kaiser Family Foundation, a nonprofit, nonpartisan research institute. In some cases, your monthly premium will exceed the amount you’d pay for Medicare Part D. However, you can’t choose a separate drug plan to go with your Medicare Advantage plan. If you take multiple prescription drugs, you may shop around to find a Part D plan that covers all of your drugs at your preferred pharmacy with original Medicare. However, with a Medicare Advantage plan, your drug coverage includes whatever that plan offers.

The federal government and licensed insurance brokers like have online tools that allow you to estimate how much you’ll pay for the medications you need. (U.S. News has a revenue-generating agreement with eHealthInsurance, which owns

Cap on Your Out-of-Pocket Health Spending

Original Medicare has no out-of-pocket maximum, so you keep paying a portion of the cost of services as you use them. Many people with original Medicare opt to purchase a Medigap policy to help minimize out-of-pocket liability.

On the other hand, Medicare Advantage plans do have an out-of-pocket limit. Once you hit the out-of-pocket limit, the plan pays for all covered expenses. The average out-of-pocket limit for Medicare Advantage enrollees was $4,972 for in-network services and $9,245 for both in-network and out-of-network services in 2022.

Enhancing Your Medicare Coverage With Private Medigap

You might wonder whether it is better to have Medicare Advantage or Medigap insurance. Similar to capping your out-of-pocket health spending, Medigap plans cover or help cover certain deductibles, coinsurance and out-of-pocket costs of original Medicare.

Some Medicare Advantage plans, but certainly not all, will be more cost-effective than adding Medigap coverage to original Medicare. Scrutinize the plan details if this is your reason for considering Medicare Advantage. In most states, you don’t have guaranteed issue rights to Medigap outside your initial Medicare enrollment period. In other words, if you initially enroll in Medicare Advantage, you may not be able to purchase a Medigap policy if you decide to switch to original Medicare later.

An Alternative to the 20% Coinsurance

Medicare Advantage plans can structure costs differently than original Medicare. They also have an out-of-pocket maximum, which limits how much you’re required to spend on your medical care each year. However, many Medicare Advantage plans charge 20% coinsurance, whichmay not be very different from original Medicare overall.

Coverage for Vision and Dental

Original Medicare doesn’t cover these services. More than 70% of Medicare Advantage plans offer some coverage of these benefits, typically including preventive dental with some cost-sharing and possibly additional premiums, according to the Commonwealth Fund.

Broadest Choice in Doctors and Other Medical Providers

More providers accept original Medicare than private Medicare Advantage insurance. With original Medicare, you can see any provider in the U.S. accepting Medicare, and almost all providers accept it. Private insurance plans tend to be restricted to a specific network, like an HMO network. If you travel frequently, you may want to consider staying with original Medicare for this reason.

Maximum Flexibility When Seeking Medical Specialists

Under original Medicare, you don’t need prior authorization from a primary care doctor to see a specialist who is enrolled in Medicare and accepting new Medicare patients. Most Medicare Advantage plans are either HMOs or PPOs. Medicare Advantage plans that are designated HMOs could require you to see a primary care doctor first as a condition of covering the cost of your visit. Preferred provider organization plans may allow you to see a specialist without a referral, but seeing an out-of-network doctor or specialist would cost you more.

If You’re Still Employed and Covered by Your Employer

You might end up paying an unnecessary premium for Medicare Advantage or could lose your employer-provided coverage. Check with your human resources department and the Social Security Administration for specifics.

If You Have Employer-Sponsored Retiree Health Benefits That Supplement Original Medicare

These benefits wouldn’t apply if you switch to Medicare Advantage, so check with your human resources department before signing up for a Medicare Advantage plan.

[Read: Medicare vs. Medicaid: What Is the Difference?]

If You Qualify for Medicaid or a Medicare Savings Program

Low-income Medicare beneficiaries have other options and should contact their state Medicaid office.

Enrolling in Medicare Advantage

If you decide to sign up for a Medicare Advantage plan, you may enroll between Oct. 15 and Dec. 7 — the period known as Medicare Annual Election Period — in order for your coverage to start the first of the following year. (Original Medicare has separate enrollment periods for beneficiaries who aren’t automatically enrolled.)

Because of government regulation, Medicare Advantage premiums are not influenced by age, health status or the method by which a consumer signs up (through a licensed insurance agent, for example, or directly through an insurer). Monthly cost — and plan availability — varies from county to county.

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Original Medicare vs. Medicare Advantage originally appeared on

Update 01/11/23: This story was published at an earlier date and has been updated with new information.

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