Why Do People Leave Medicare Advantage Plans?

Medicare beneficiaries leave Medicare Advantage plans for several reasons, including restricted networks, unpredictable plan changes, and high cost-sharing rates. According to The Commonwealth Fund, about 17% of beneficiaries dis-enroll from Medicare Advantage annually.

That number has increased from a past dis-enrollment rate of about 10%. If you’re deciding between Medicare Advantage and Medicare Supplement or are dissatisfied with your current Medicare Advantage plan, you will want to explore why some beneficiaries drop their Advantage plans.

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Medicare Advantage Plan Restrictions

Medicare Advantage members often join an HMO, usually because it’s the most common kind of plan that insurance companies offer. HMOs generally control costs but restrict coverage to specific network providers (except for emergencies and other unusual circumstances).

Most people ensure they can visit their favorite doctors, hospitals, and pharmacies before joining a plan for the first time. However, the nature of Medicare Advantage plans means that members may still be dissatisfied.

For instance:

• Providers may leave the network, leaving members without their favorite doctors.
• Some members may develop a medical condition that requires a specific specialty or testing service, and the network may not provide a convenient provider for them to access.
• Most HMOs say they will make exceptions if the network doesn’t offer a nearby provider, but getting approval for these unusual exceptions can take a long time.
• Most plans have local or regional networks, so coverage won’t work well for people who travel away from home. These plans also seldom provide any coverage outside of the country.
• Sometimes, providers appear on the plan’s list, even though they’re not currently accepting new patients.

Unpredictable or High Cost-Sharing Rates

Medicare Advantage plans also control expenses by asking members to share some costs. Typically, they offer low co-payments or deductibles for routine services. However, they often ask members to pay a large share for the most expensive tests and services, making it difficult for retired people to budget for future healthcare expenses.

Unexpected Changes to Medicare Advantage Plans

Medicare Advantage plan members must keep up with plan changes. Some changes, like providers withdrawing from networks, can occur anytime. Plans might also make annual changes.

For instance, the plan may change which drugs are covered or its benefits, co-pays, and deductibles. The best plan for the current year might not offer adequate coverage in the future.

The Alternative to Medicare Advantage

Medicare supplement plans, called Medigap, offer an alternative to Medicare Advantage plans. They have several noticeable advantages:

• The government has established Medigap coverage and base benefits, so insurers can’t change them on a whim
• Medigap plans don’t use a network at all – almost all providers across the country accept them
• Some Medigap plans even cover urgent care outside the country

Note that Medigap plans won’t help pay for typical prescriptions. However, people who enroll in a Medicare supplement can also enroll in a Part D drug plan to cover this gap.

When's the Best Time to Leave Medicare Advantage and Join Medigap?

Those new to Medicare have a six-month Open Enrollment Period (click the link for more details). During this time, insurers can’t turn them down because they have Guaranteed Issue Rights. This is the best time to join if you are able.

If you miss this period, you must submit to underwriting when applying for a new Medicare supplement plan. Thus, you could be declined or offered higher rates because of a pre-existing condition.

However, Medicare says you may have a federally mandated Guarantee Issue Right under the following circumstances:

• If you lose current Medicare Advantage or other group coverage through no fault of your own or after retirement
• If you signed up for Medicare Advantage upon Medicare eligibility and decided to drop out within 12 months
• If you move away from your plan’s service area

Some states offer additional enrollment periods for local beneficiaries to enroll in Medigap plans. You can always speak with a qualified Medicare insurance agent about your circumstances.

Bottom Line

While Medicare Advantage plans offer certain benefits, they may not always provide the necessary coverage.

If you’re contemplating discontinuing your current plan and returning to Original Medicare with a Medigap plan, it’s crucial to thoroughly review all rules and regulations before finalizing your decision.

Familiarizing yourself with your rights and understanding enrollment deadlines will help secure the appropriate coverage for your needs.

Sources: Kaiser Family Foundation – National Institute of Health – HealthAffairs.org

FAQs

• Why do some people dislike Medicare Advantage?

  Medicare Advantage plans offer many benefits, but some individuals find the networks restrictive. Limited provider options, drug coverage, and unpredictable costs make it challenging to anticipate medical expenses. As plans change annually, some prefer Original Medicare with a Medigap supplement.

• What is the biggest disadvantage of Medicare Advantage?

  The main drawback of Medicare Advantage is the unpredictability of costs, as co-pays and deductibles can fluctuate, and providers may leave the network unexpectedly, which makes budgeting for future medical expenses challenging.