Comparing Original Medicare with Medicare Advantage

When comparing drug coverage options, its is important to know that it depends on how you receive your Medicare. Those who subscribe to Original Medicare have the option of receiving their drug coverage via Medicare's stand-alone PDP (Prescription Drug Plan). The other option is if you subscribe to Medicare Advantage Plan. Drug coverage in this case is handled through Medicare’s MA-PD (Medicare Advantage Prescription Drug) plan. The difference between these two plans is how they are organized and the costs you will incur. Obviously, when choosing any plan, you must assess your individual needs and chose the plan that best suits them. The major areas for comparison are: co-payments, access to hospitals and doctors, premiums for drug coverage, drug costs, extra drug benefits and overall cost of each plan.

Changes That Have Occurred In 2012

You can sign up for drug coverage through a Medicare Prescription Drug Plan (PDP) if you already subscribed to Original Medicare. As of 2012, these plans cost an average of $30 per month. The premiums can vary, up or down, depending on the Prescription Drug Plan. Many states offer Medicare Advantage Prescription Drug Plans (MA-PD), which combine drug coverage at no extra cost. It should be noted that these plans do not cover Part B premiums. These plans may also charge for additional health care premiums. Make sure and do your due diligence before selecting a plan. As of 2012, both Medicare Prescription Drug Plan and Medicare Advantage Prescription Drug Plans became very similar in their approach to out-of-pocket or shared drug costs. Deductibles for drug plans will depend on the specific plan. In some instances there will be no deductible, in others it will be $320 or less. Two industry terms that you should make yourself familiar with are, co-pay and co-insurance. This relates to the out-of-pocket expense incurred after you meet your plans deductible limit. This of course only applies if the plan has a deductible. The co-pay and co-insurance cost will vary depending on the drug or drugs being prescribed. There may also be what is known as a coverage gap. A coverage gap means that once the cost of your prescriptions has reached 2,930, you will pay a percentage of any costs above this amount. If you are concerned about catastrophic coverage, both plans cover it. How this works is that if you incur $4,700 in prescription costs (or a total of $6,657, as paid by medicare and yourself) in the course of a single year, you will pay 5% of the cost for any further drug costs in the remainder of that year. Depending on the area in which you live, both plans may provide extra drug benefits. This could mean that a plan may cover brand name or generic drugs via the coverage gap. Some plans may also cover drugs not usually covered by Medicare's drug coverage. This kind of enhanced coverage will result in higher premiums. In addition to the cost of drug coverage, thought must also be given to the overall cost of the plan. Both Part A and B in Original Medicare have deductibles. It should also be noted that Part B requires a monthly premium. Some services also implement co-pay and co-insurance costs for different services. In the case of Medicare Advantage (MA) plans, there is often an additional premium for health care coverage as well as the Part B premium (even if you don't have to pay a premium for drug coverage). When figuring out total costs, the following need to be considered:

• The premium for Medicare Part B.

• The premium for Medicare Advantage plan, if required.

• The premium for Medicare Advantage drug coverage, if required.

• Addition benefit premiums.

• Plan deductibles, if required.

• Co-payments for prescription drugs, seeing doctors, etc.

Co-payments also differ between Original Medicare and Medicare advantage. Preferred doctors in Medicare Advantage's system have lower co-payments. Once outside of their recommended list of doctors one will incur higher co-payments. There is also the chance that the plan will not cover a doctor unless recommended by their plan. Make sure to look into this. In the case of Original Medicare, doctor visits (and other medical services) require that you pay 20% of the cost (if approved) after your annual deductible has been met. As of 2012, the yearly deductible for Original Medicare is $140. It should be noted that you are not bound to a list of pre-approved doctors. With that in mind, now is a good time to look at what each plan offers as far as access to doctors and hospitals. Original Medicare allows one the flexibility to choose both doctors and hospitals. Coverage, though, is limited to what is outlined in Parts A and B. Medicare Advantage maintains a list of doctors in its network that you choose from. The downside is that if the doctor of you choice is not in their network you may have to pay more. Unlike Original Medicare, Medicare Advantage Plans have the potential of offering more coverage, such as hearing and sight, that are not covered in Part B. In summation, make sure to thoroughly research your options. There is no point paying for what you don't need or paying more than you need to for what you do need. Everyone's needs are different, so while others will give you advice, always keep in mind what is right for you and within your budget.