Medicare vs. Medicare Advantage: Key Trade-Offs To Know for 2026

The closer you get to age 65, the more you hear about Medicare. Like seemingly all health insurance programs, the federal government's insurance program for retired adults can be hard to understand, especially during your initial enrollment period when you need to choose between Original Medicare and Medicare Advantage. Making the right choice here is one of the smart money moves for seniors, since the plan you pick can directly affect your long-term healthcare costs.

Not sure of the difference? We're here to help. This article explains the differences between these two plans, reviews upcoming updates, and offers suggestions on how you can decide which one is right for you.

What is Original Medicare?

Original Medicare is made up of two parts: Medicare Part A, which helps you pay for hospital stays, and Medicare Part B, which helps you cover typical medical costs.

Just like traditional health insurance, Original Medicare has a monthly premium, deductible, and out-of-pocket maximum. Unlike private insurance, it doesn't restrict you to a certain network — you can see any doctor or visit any hospital in the United States as long as they take Medicare (and most do).

What is Medicare Advantage?

If you've spent your working life getting insurance through your employer, Medicare Advantage is more like the health insurance you're used to. These plans are sometimes called Medicare Part C, and they're managed by private insurance companies rather than stemming directly from the federal government.

Like traditional insurance plans, Medicare Advantage plans usually restrict you to specific provider networks. These plans are often local to your area and may not include coverage outside of your state.

All Medicare Advantage plans cover the same things Original Medicare does. However, depending on the plan, they may also cover additional services, such as dental and vision insurance. These plans cost more and may have more restrictions (like requiring referrals), but the extra coverage isn't a benefit you can find through Original Medicare.

What's changing for Medicare in 2026?

The start of a new year signals changes for all Medicare plans, both Original and Advantage. Regardless of the type of Medicare you opt for, you should be aware of how your benefits may shift starting January 1:

• Medicare Advantage plans will no longer be allowed to offer supplemental benefits like funeral planning, life insurance, and hospital indemnity insurance.
• Original Medicare enrollees in six states (AZ, NJ, OH, OK, TX, WA) will need prior authorization for certain services.
• Costs for ten expensive medications will be capped at lower price points for all Medicare enrollees.

How can you decide between Medicare and Medicare Advantage?

Choosing the right type of Medicare for you is a big decision, and it's a choice you can't make lightly. To make the process a little easier, we've listed some crucial steps below that can guide you toward your ideal plan.

Check to see if your doctor is in-network

If you love your current medical team and don't want to go through the hassle of finding a new provider, ask your current doctor if they accept Medicare. (Since 93% of physicians do, the answer is probably yes.)

If you're more interested in Medicare Advantage, sort through plan options to find out if any networks include your doctor. If none do, you'll have to decide between finding a new medical professional or choosing Original Medicare.

Make sure your prescriptions are covered

Original Medicare beneficiaries need to choose a Medicare Part D plan to get their medication costs covered. Medicare Advantage plans usually include Medicare Part D benefits as part of their overall plan (meaning you don't need to find separate drug coverage).

However, not all plans cover all prescriptions. As you sort through Part D and Medicare Advantage options, check to see if your existing medications are covered and, if so, what the price is capped at. If the plan you're considering doesn't cover your prescription, consider other options.

Compare plans using tools on Medicare.gov

To easily compare plans, use the government's official plan comparison tool. Create an account so you can easily compare medication costs for different plans, see Medicare Advantage plans specific to your area, and more.

Evaluate your travel plans

Are you planning to be more of a homebody in retirement? Or have you always planned to use your retirement to travel? If the latter, Original Medicare might be your best bet since it isn't limited to a certain state or region. In contrast, Medicare Advantage plans may restrict you to local networks and may or may not help you pay for out-of-state treatments.

Compare premiums and out-of-pocket limits

Most importantly for your bottom line, you need to compare premiums, deductibles, and out-of-pocket limits to make sure the plan you choose is one you can afford.

For instance, Medicare Advantage HMO (health maintenance organization) plans limit you to a local network, but they're usually cheaper than Medicare Advantage PPO (preferred provider organization) plans, which let you see out-of-network specialists. As a trade-off, your monthly premiums and deductible will likely be higher.

Consider your health history

Since Medicare Advantage plans are more varied and diverse than the one-size-fits-all Original Medicare plan, you might have an easier time finding a Medicare Advantage plan that caters to your specific health concerns. Think about past, current, and potential future health issues while comparing plans and ensure the one you pick can help you pay for your most pressing medical concerns.

Bottom line

Choosing between Original Medicare and Medicare Advantage isn't a one-time deal. During the yearly open enrollment period, you can decide if you want to stick with your current coverage or switch to a different plan, which could mean switching from Medicare Advantage to Original Medicare or finding a new Medicare Advantage plan. Not realizing you can make these changes is one of those surprising retirement mistakes that can leave you stuck with coverage that no longer fits your needs.

Just remember that as your health and budget needs change, your Medicare plan can change too — so make sure to review your coverage each year and don't be shy about switching as needed.

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