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Medicare can be confusing, and we’re here to help by exploring the differences between Traditional Medicare (TM) and Medicare Advantage (MA).
Traditional Medicare, the original program dating back to 1965, requires monthly premiums based on income. It allows participants to see almost any doctor or visit any hospital in the country. While it covers most costs, many people elect to purchase extra insurance, like "Medigap" policies for additional support. Traditional Medicare also offers prescription drug coverage (Part D), but must be purchased separately.
Medicare Advantage, introduced in the late 1990s, operates as a managed care plan. It may have a smaller network of providers and might limit certain medical services. In return, the premiums can be lower and offer extra benefits like dental, vision, and fitness programs.
Big insurers like Humana are making Medicare Advantage a priority due to its profitability to the insurance company. In 2022, 48% of beneficiaries opted for Medicare Advantage over Traditional Medicare. However, it was estimated that Medicare Advantage plans cost the government $321 more per person per year in 2019 than Traditional Medicare, costs paid for by taxes.
Which option is best? Traditional Medicare offers more provider choice and uniform benefits, while Medicare Advantage provides extra perks.
Experts suggest that improving Traditional Medicare might be a better alternative than paying high rates to insurers offering Medicare Advantage plans.
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