Traditional Medicare vs. Medicare Replacements

(Medicare Replacement Policies are also referred to as Medicare Advantage Plans)

 

  • Traditional Medicare is administered through the federal government, Medicare Replacement Policies are managed by private commercial suppliers

  • If you enroll in both, Traditional Medicare includes Part A (hospital) and Part B (medical), A & B benefits are consistent for all members with Traditional Medicare.Medicare Replacement Policies’ most common plans are PPOs (Preferred Provider Organizations), HMOs (Health Maintenance Organizations) and PFFs (Private Fee For Service).These plans vary per each commercial insurance company and within the selected insurance policy.

  • A physician referral is not needed for Traditional Medicare; one may be needed for a Replacement Policy

  • There is no out of pocket limit for Traditional Medicare.Medicare Replacement Policies have an annual out-of-pocket maximum, which protects members with expensive care.After reaching the limit, the plan pays 100% of the charges.

  • Traditional Medicare usually covers 80% of cost.The remaining 20% is either the member’s or the Medicare Supplement’s responsibility, should the member choose one.With a Medicare Replacement Policy, the percentage the insurance pays is determined by the guidelines of the plan the member selects.(Often times the Medicare Replacement Policy follows Traditional Medicare’s standards)

  • Members with Traditional Medicare pay deductibles, premiums and the (typically) 20% coinsurance that is determined by a Medicare-approved cost.The copay is paid by a Medicare Supplement if the member buys one.Medicare Replacement Policies’ members pay Traditional Medicare Premiums, the Replacement Policies’ premiums (if the selected plan has one), deductibles and copays which are determined by the plan purchased.

 

Suber S. Huang, MD, MBA

 

University Suburban Health Center

1611 S. Green Road, Suite 230

South Euclid, OH  44121

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Tel:  216-382-3366
Fax: 216-382-4959
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