Understanding Original Medicare
Original Medicare consists of Part A (hospital coverage) and Part B (medical coverage). It operates on a fee-for-service model — you can see any doctor or specialist who accepts Medicare, nationwide, with no referrals required. Medicare pays approximately 80% of covered costs after your deductible; you pay the remaining 20% with no out-of-pocket maximum.
The lack of an out-of-pocket cap is the major weakness of Original Medicare. A serious illness could cost you tens of thousands of dollars in cost-sharing — which is why many people add a Medigap (Medicare Supplement) policy.
Understanding Medicare Advantage (Part C)
Medicare Advantage plans are offered by private insurers approved by CMS. These plans must cover everything Original Medicare covers, but they often add extra benefits and change the cost structure. They typically feature:
- Lower premiums — many plans cost $0/month beyond the Part B premium
- Out-of-pocket maximums — legally required cap (up to $8,850 in 2024 for in-network)
- Extra benefits — dental, vision, hearing, fitness memberships, transportation
- Network restrictions — HMO plans require staying in-network; PPO plans allow out-of-network at higher cost
HMO vs. PPO Medicare Advantage
| Feature | HMO | PPO |
|---|---|---|
| Network requirement | Must stay in-network | Can go out-of-network (at higher cost) |
| Primary care physician | Required; needs referrals | Optional; no referrals needed |
| Premium | Typically lower | Typically higher |
| Best for | Those who want lower costs and have local providers | Those who want flexibility |
Medigap as an Alternative
If you choose Original Medicare, Medigap fills the cost-sharing gaps. Plan G (the most popular post-2020) covers nearly all out-of-pocket costs after the Part B deductible (~$240/year). Monthly premiums range from $100–$300+ depending on age, gender, and state. The tradeoff: you get nationwide coverage and predictable costs, but pay more monthly.
Who Should Choose What?
Medicare Advantage may be better if you:
- Are relatively healthy and want low monthly costs
- Live in an area with strong plan networks
- Want dental, vision, or hearing coverage bundled in
- Don't travel frequently across state lines for care
Original Medicare + Medigap may be better if you:
- Have chronic conditions requiring frequent specialist care
- Travel frequently or have doctors in multiple states
- Want predictability and no network restrictions
- Can afford the higher monthly Medigap premium
The Switching Problem
One important caveat: if you enroll in Medicare Advantage and later want to switch to Original Medicare + Medigap, you may face medical underwriting in most states (except during your initial enrollment window). Insurers can deny or charge more for Medigap if you have pre-existing conditions. Plan your initial choice carefully.
Star Ratings Matter
CMS rates Medicare Advantage plans from 1–5 stars based on quality and performance. Plans rated 4 or 5 stars receive bonus payments and often offer better benefits. Check plan ratings at Medicare.gov before enrolling.