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  6. Medicare vs Medicare Advantage

Traditional Medicare versus Medicare Advantage

What are the differences between Traditional Medicare and Medicare Advantage?

Traditional Medicare

Traditional Medicare (or Original Medicare) includes Part A and Part B.

You can use any doctor or hospital that takes Medicare, anywhere in the U.S.

Traditional Medicare pays for all covered services at Medicare allowed rates—it can result in fewer restrictions and better coverage but can be more expensive than MA.  Traditional Medicare generally does not require prior authorization for services or supplies.

There are no annual limits on out-of-pocket costs under Parts A and B.

To help with cost of coverage, individuals can buy Medicare Supplemental Insurance (Medigap), which is extra insurance available from a private company. Access to Medigap plans may vary depending on your state. You will pay a premium each month for Medigap.  Also, Medicare beneficiaries with limited income and resources may qualify for supplemental coverage under Medicaid (known as Medicare Savings Programs).

Part D is optional coverage for prescription drugs and must be added separately. Read more about choosing a Part D plan below.

Medicare Advantage

Medicare Advantage (MA)—also known as Part C—is an alternative to Traditional Medicare. MA plans are run by private health insurers that follow certain rules and are then paid by Medicare to provide services. All MA plans include coverage of all Medicare Part A and Part B benefits, except hospice.

Under an MA plan, you may only use doctors in the plan’s network. In some areas, this may be limited.

MA plans are paid a capped monthly fee, which creates incentives to hold down costs, which can result in limits placed on services. You may be subject to prior authorization to access needed services or treatments. Plans may offer extra benefits that Traditional Medicare doesn’t cover, such as certain vision, hearing, and dental services. While MA plans may be less expensive than Traditional Medicare, they may offer fewer services and a more limited coverage network.

Annual out-of-pocket costs are limited. Once an enrollee reaches the MA plan’s limit, the plan pays 100% of the cost of covered services for the remainder of the year.

You cannot buy Medicare Supplemental Insurance (Medigap). 

All MA plans (except private fee-for-service plans) must offer an option that includes the Part D drug benefit, but not all MA plans cover prescription drugs.

Traditional Medicare versus Medicare Advantage—how do I know what is best for me?

It can be hard to know how to pick the best coverage for your needs but here are a few considerations to take into account:

  • Under Traditional Medicare, you can visit any doctor or hospital that takes Medicare, anywhere in the U.S. whereas under Medicare Advantage, you will be limited to your plan’s network.
  • Traditional Medicare generally does not require prior authorization for services or supplies whereas prior authorization is common in Medicare Advantage plans.
  • Traditional Medicare pays for all covered services at Medicare allowed rates – it can result in fewer restrictions, and better, more comprehensive coverage, but it can be more expensive than Medicare Advantage.

Learn more about the differences between Traditional Medicare and Medicare Advantage.

How can I switch from Medicare Advantage back to Traditional Medicare?

If you find that Medicare Advantage (MA) is not the right fit for you, you have options to switch back to Traditional Medicare. If you joined a MA Plan during your Initial Enrollment Period, you can change to another MA Plan (with or without drug coverage) or go back to Traditional Medicare (with or without a drug plan) within the first 3 months you have Medicare Part A & Part B.

You can also switch from your MA plan back to Traditional Medicare during Medicare Open Enrollment (October 15 to December 7) or during the MA Open Enrollment Period (January 1 to March 31).

Learn more about switching from MA plans to Traditional Medicare.

How do I find a Part D plan that is right for me?

Under Traditional Medicare, Part D (drug benefit) is optional coverage and must be added separately. The majority of Medicare Advantage plans offer an option which includes Part D coverage.  

If you are choosing a Part D plan, it is important to review plan formularies to make sure that the specific drugs you take are covered. Plans will vary in which drugs they cover and how much they charge you for out-of-pocket costs. 

Note: Part D plans are required to cover most drugs in six “protected” classes, which includes antineoplastics (anti-cancer drugs) and immunosuppressants. If you are living with lung cancer or have had a lung transplant, you are likely using one of these drugs! This gives you flexibility to shop around to find the Part D plan that is right for you because all Part D plans should cover these drugs. But drugs for other lung conditions, like asthma and COPD, do not fall into the protected classes – so you should look extra closely to make sure your medications are covered.

In 2025, individuals enrolled in Part D plans cannot pay more than $2,000 in out-of-pocket costs for their medications. Only prescriptions filled at an in-network pharmacy will be included in the $2,000 out-of-pocket cap. Also new in 2025 is the Medicare Prescription Payment Plan, which will allow beneficiaries to pay their out-of-pocket prescription drug costs in monthly installments over the course of the plan year. 

Check out these 6 tips for choosing Medicare drug coverage from Medicare.gov. 

Be sure to check out the Medicare FAQ to learn more.

Page last updated: October 14, 2024

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