Original Medicare with Part D vs. Medicare Advantage: Which is best for me?
Depending on how you get your Medicare coverage, you will have different options for drug coverage.
- If you have Original Medicare, you can get drug coverage through a stand-alone Medicare Prescription Drug Plan (PDP).
- If you are in a Medicare Advantage plan, you can get drug coverage through a Medicare Advantage Prescription Drug (MA-PD) plan. To find out more about these plans, go to the Medicare Advantage page.
These two types of drug plans are different in how they are set up and how much they ask you to pay. You should choose between them based on which one is best for you. The sections below tell how the two types of plans compare in several areas, including
- Premiums for drug coverage (how much you pay in order for the plan to cover you – this does not include how much you will pay your drugs)
- Drug costs (how much you pay when you buy drugs)
- Extra drug benefits
- Overall plan costs
- Copayments (for general medical care)
- Access to doctors and hospitals
Premiums for Drug Coverage
Medicare Prescription Drug Plans (PDPs): If you have Original Medicare, you can sign up for drug coverage through a Medicare Prescription Drug Plan (PDP). The national average cost for these plans in 2013 is $30 a month. Some PDPs have premiums above and below this amount.
Medicare Advantage Prescription Drug Plans (MA-PD): In most states, you can get MA-PD plans that cover drugs at no extra cost. However, you will still have to pay Part B premiums, plus any premiums the plan may charge for health care.
Shared Drug Costs (Out-of-Pocket Costs) in 2014
Both types of plans are mostly the same in this area.
- Depending on the specific plan you have, you may have no deductible for drug costs, or you may have a deductible of $310 or less per year.
- After you meet your deductible (if the plan has a deductible), you will pay a portion of the cost of drugs covered by your plan. This is called a copay or coinsurance. This cost varies by drug.
- Your plan may have a coverage gap. This means you will pay a percentage of the costs of your drugs after your total drug costs reach $2,850.
- Both types of plans offer catastrophic coverage. This means that if you pay $4,550 in drug costs (or $6,455.00 in total drug costs paid by you and by Medicare) during one year, you will pay 5% (or less) for any drugs you buy during the rest of that year. Exactly how much you pay will depend on the specific plan you choose.
Both types of plans may offer extra drug benefits in some areas. For example, a plan might cover some of the costs of generic or brand name drugs in the coverage gap. Another example is that a plan might cover “excluded” drugs that Medicare drug coverage normally would not pay for. You will probably pay higher premiums if you get this kind of enhanced coverage.
Overall Plan Costs
In addition to the cost for drugs, you should also think about how much the plan you choose will cost overall.
Original Medicare has deductibles for Part A and Part B. There is also a monthly premium for Part B. (Most people pay no premium for Part A coverage.) You will also have copays or coinsurance for different services. For more information about these costs, visit our Medicare costs section.
Medicare Advantage (MA) plans often include a premium for health care coverage, on top of your Part B premium. This may be the case even if you don’t pay a premium for drug coverage. To figure out your overall costs, you need to include:
- Your Medicare Part B premium
- The Medicare Advantage plan premium (for Medicare Advantage coverage of Part A and B), if there is one
- The Medicare Advantage premium for drug coverage, if there is one
- Any additional premium there may be for additional benefits
- Any deductibles the plan may have
- Any copays the plan may charge for doctor visits, prescription drugs, and more
Original Medicare: For doctor visits and other medical services, you pay 20% of the approved charge after you meet your annual deductible ($147 in 2013 & 2014).
Medicare Advantage: Medicare Advantage plans have lower copays for visits to doctors in their network. However, there is a higher copay for doctors outside of the network, or some plans may not cover care received out of network.
Access to Doctors and Hospitals
Something else to think about in choosing a plan is how much choice you have about which doctors and hospitals you use.
- In Original Medicare (Part A and B), you choose your doctors and hospitals.
- In Medicare Advantage, you choose your doctors from a network. If you use a doctor who is not in your network, you may have to pay more out of your pocket.
- Original Medicare is limited to services covered under Part A and B.
- Medicare Advantage plans may cover some services that Part B does not cover, such as eye and hearing services.
For More Information
- For details about what is included in Medicare A and B, see the “Medicare & You 2013” handbook (from Medicare Publications.)
- For details about what is included in Medigap plans, see “2013 Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare” (from Medicare Publications.)
- To find out about Medicare Advantage plans in your area, go to the Medicare.gov Plan Finder. It will identify Medicare Advantage plans in your area and tell you what kind of coverage they offer.
- Aon Hewitt Navigators® is a Medicare insurance brokerage service recommended by NCOA because it meets rigorous Standards of Excellence established by NCOA. You may be eligible for personal one-on-one assistance in selecting and enrolling in health coverage. All of the services are provided at no cost to consumers. Check to see if you are eligible.