Medicare vs. Medicare Advantage: How They Work Differently

The Core Difference Between Medicare and Medicare Advantage

Original Medicare is a federal health insurance program run directly by the Centers for Medicare & Medicaid Services (CMS). It has two main parts: Part A covers hospital stays, skilled nursing care, and hospice; Part B covers doctor visits, outpatient care, and preventive services. You pay a monthly premium for Part B, and Medicare pays its share of approved costs after you meet your deductible.

Medicare Advantage (also called Part C) is a different way to get your Medicare benefits. Private insurance companies run these plans under a contract with Medicare. Instead of getting Part A and Part B from the government, you get all your hospital and medical coverage through the private plan. The plan collects a payment from Medicare for you, and you pay a monthly premium to the plan (which may be zero dollars).

The key difference: with Original Medicare, you go to any doctor or hospital that accepts Medicare. With Medicare Advantage, you usually must use doctors and hospitals in the plan's network, much like a traditional health insurance plan from an employer.

Key Takeaways

• Original Medicare is run by the federal government and lets you see any doctor who accepts Medicare; Medicare Advantage is run by private insurance companies and usually requires you to use in-network providers.
• Original Medicare has no yearly limit on what you can spend out of pocket; Medicare Advantage plans have a maximum out-of-pocket limit, after which the plan pays 100 percent of covered services.
• Medicare Advantage plans often include dental, vision, and hearing coverage that Original Medicare does not; Original Medicare requires you to buy separate coverage (called Medigap) to fill gaps.
• With Original Medicare, you can see any specialist without a referral; most Medicare Advantage plans require a referral from your primary care doctor.
• Medicare Advantage plans may have lower monthly premiums than Original Medicare plus Medigap, but you pay more when you use services.

How You Pay Under Each Plan

With Original Medicare, you pay three separate things: a monthly Part B premium (currently $164.90 per month for most people in 2024, though this amount changes yearly), a Part A deductible when you go to the hospital ($1,632 per hospital stay in 2024), and coinsurance after that (you pay a percentage, Medicare pays the rest). There is no yearly cap on how much you can spend out of pocket — if you have a serious illness, costs can keep climbing.

With Medicare Advantage, you typically pay a monthly premium to the plan (sometimes zero), a yearly deductible, copays when you see a doctor or fill a prescription, and coinsurance for some services. The crucial difference is that Medicare Advantage has a yearly out-of-pocket maximum — once you hit that number, the plan pays 100 percent of covered services for the rest of the year. In 2024, that maximum is $8,050 for in-network services.

Many people find Medicare Advantage cheaper month-to-month if they are generally healthy. Original Medicare can be cheaper if you use a lot of services, because there is no yearly spending cap.

Network Restrictions and How You Access Care

Original Medicare has no network. You can see any doctor, specialist, or hospital in the United States that accepts Medicare — and most do. You do not need permission from anyone to see a specialist. If you travel or move, your coverage goes with you.

Medicare Advantage plans work like employer health plans. Each plan has a network of doctors, hospitals, and specialists. If you see someone outside the network, you pay more or the plan does not cover it at all (with rare exceptions for emergencies). Most Medicare Advantage plans require you to pick a primary care doctor, and you usually need a referral from that doctor to see a specialist.

Some Medicare Advantage plans are HMOs (Health Maintenance Organizations), which have stricter networks and require referrals. Others are PPOs (Preferred Provider Organizations), which let you see out-of-network doctors for a higher cost. A few plans are PFFS (Private Fee-for-Service), which work more like Original Medicare but still involve a private company.

What Is Covered: Gaps and Add-Ons

Original Medicare covers hospital care, doctor visits, lab work, imaging, and preventive services. It does not cover dental work, routine eye exams, eyeglasses, hearing aids, or long-term care. Many people buy a separate policy called Medigap (or Supplemental Insurance) to cover these gaps. Medigap is sold by private insurance companies but is standardized by the federal government — a Plan G from one company covers the same things as a Plan G from another.

Medicare Advantage plans often include dental, vision, and hearing coverage built in. Some plans also cover fitness programs, transportation to medical appointments, or over-the-counter health items. However, these extras vary widely by plan and by region. The coverage for dental and vision under Medicare Advantage is usually limited — for example, a plan might cover a cleaning and exam once a year, but not major work like crowns or root canals.

Both Original Medicare and Medicare Advantage cover prescription drugs only if you add Part D (prescription drug coverage). Part D is sold by private insurance companies but is regulated by Medicare. You can add Part D to Original Medicare, or choose a Medicare Advantage plan that includes drug coverage.

Flexibility and Continuity of Care

Original Medicare gives you the most freedom to change doctors or see specialists without asking permission. If your doctor retires or you move, you can find a new one who accepts Medicare. If you travel outside your home state, your coverage does not change.

Medicare Advantage plans limit your flexibility. If your doctor leaves the network, you may have to find a new one within the plan. If you move to a different state, your plan may not be available there, and you will need to switch plans. Some plans require prior authorization — the plan must approve a service before you have it, or it will not pay.

For people with chronic conditions who have found doctors they trust, Original Medicare is often easier because you do not have to worry about your doctor leaving the network or the plan denying a service your doctor recommends.

When Medicare Advantage Makes Sense

Medicare Advantage can be a good choice if you are generally healthy, do not travel much, and want lower monthly premiums. The built-in dental and vision coverage appeals to many people. If you like having a primary care doctor who coordinates your care, the structure of Medicare Advantage may feel familiar.

Medicare Advantage also works well if you want predictable costs — once you hit your yearly out-of-pocket maximum, you know the plan will cover the rest. This is different from Original Medicare, where costs can keep rising if you have a serious illness.

However, Medicare Advantage requires you to stay within the network (except for emergencies) and to follow the plan's rules about referrals and prior authorization. If you have a rare condition, see many specialists, or travel frequently, these restrictions can be frustrating.

When Original Medicare Makes Sense

Original Medicare is the better choice if you want to see any doctor without restrictions, if you have complex medical needs, or if you travel frequently. It is also better if you have a rare condition and need specialists who may not be in a Medicare Advantage network.

Original Medicare does cost more month-to-month if you add Medigap to cover the gaps. However, if you use a lot of medical services, the lack of an out-of-pocket cap means you could spend less overall than you would under Medicare Advantage, depending on the plan.

Original Medicare is also simpler if you do not want to deal with network restrictions, prior authorization, or the risk that your plan will change next year and your doctor will no longer be in the network.

Questions to Ask Your Doctor or Medicare

Before you choose between Original Medicare and Medicare Advantage, gather information about your own situation. Ask your current doctors whether they accept Medicare and whether they participate in specific Medicare Advantage plans in your area. If you take many medications, ask your pharmacist which plans cover them and at what cost.

You can call Medicare directly at 1-800-MEDICARE (1-800-633-4227) to ask questions about how Original Medicare works, or to get a list of Medicare Advantage plans available in your zip code. You can also visit Medicare.gov and use the plan comparison tool to see what plans are offered near you, what they cost, and what doctors are in each network.

Frequently Asked Questions

Can I switch from Medicare Advantage back to Original Medicare?

Yes, but only during certain times of year. You can switch during the Annual Enrollment Period (October 15 to December 7 each year), or if you have a may have access to life event like moving out of your plan's service area. If you switch to Original Medicare, you should also enroll in Medigap or Part D at the same time, or you may face higher premiums later.

Do I need Medigap if I have Original Medicare?

No, Medigap is optional. However, without it, you pay the full deductible and coinsurance amounts yourself. Many people find Medigap worth the extra monthly premium because it protects them from very high out-of-pocket costs. You do not need Medigap if you have Medicare Advantage.

What happens if I see an out-of-network doctor with Medicare Advantage?

It depends on the plan and the situation. With an HMO, the plan usually does not pay for out-of-network care except emergencies. With a PPO, the plan pays something, but you pay more than you would in-network. Always check your plan documents or call the plan before seeing an out-of-network provider.

Can I have both Original Medicare and Medicare Advantage at the same time?

No. You choose one or the other. If you enroll in Medicare Advantage, your Original Medicare coverage ends. If you later switch back to Original Medicare, your Medicare Advantage coverage ends.

Do Medicare Advantage plans cover care outside the United States?

Most Medicare Advantage plans do not cover care outside the U.S., with rare exceptions for emergency care in border areas. Original Medicare also has limited coverage outside the U.S. If you travel internationally, ask your plan or Medicare what is covered before you leave.