Why Medicare Advantage Plans Are Bad (5 Reasons)
Medicare Advantage plans are often viewed as bad because out-of-pocket expenses can add up to a significant amount. If you have frequent doctor visits, take a lot of prescription medications, or need Medicare Advantage plans may not fit everyone’s needs, but this does not make them subjectively bad – in fact, they are still worth considering for certain individuals.
Here are a few reasons why Medicare Advantage plans are a bad choice for certain Medicare beneficiaries:
Five Disadvantages of Medicare Advantage
#1 Out-Of-Pocket Costs
An attractive feature that health insurance companies promote with many MA plans is that you will pay either no or very low premiums; these health insurance plans are often referred to as a “free Medicare Advantage plan,” even though you must continue to pay your Medicare Part B premium. However, you will pay copayments, coinsurance, and deductibles for many services upfront.
Those services can include:
- Doctor visits
- Emergency room visits
- Lab work
- CT or MRI scans
- Outpatient surgery
- Chemotherapy
- Prescription drug coverage
- Dialysis
- Skilled nursing care
These out-of-pocket expenses can add up quickly. Although Medicare Advantage plans cap how much you have to pay out-of-pocket each year before the plan covers 100% of your costs, that limit can range from $3,000 to nearly $8,000. In 2023, the out-of-pocket limit is $8,300.
If you’re considering a Medicare Advantage plan, you need to pay attention to your cost share and the plan’s maximum out-of-pocket cap. You might find that Original Medicare Part A and B along with a Medicare Supplement insurance plan are less expensive in the long run.
#2 Network Limits
Another disadvantage of Medicare Advantage plans is that many plans use local or regional provider networks or preferred provider organizations. As a result, PPO plans have fewer providers compared to the number of providers you can see under Original Medicare. In addition, network restrictions might require you to change healthcare providers.
PPO plans also might limit your access to specialty care. For example, if you go out of the plan’s network, the insurer can charge you a higher out-of-pocket fee or reject your claim entirely. This can be extremely costly if you need medical care while traveling.
#3 Referrals
If your Advantage plan is a Health Maintenance Organization (HMO), you will likely need a referral from your primary care physician to see a specialist for medical services. SNPs also typically require referrals. If you don’t get a referral, you’ll be out-of-network and responsible for the cost of the visit.
In addition to referrals, many Medicare Advantage plans require prior authorization for care in a skilled nursing facility, home health care, hospital stays, and other services. If you don’t get prior approval, or if the insurance carrier denies your request, you have to decide whether to pay the out-of-pocket expense or forego the care.
#4 Annual Plan Changes
Under guidelines from the Centers for Medicare and Medicaid Services, insurance providers can change their rules about networks and costs. Additionally, hospitals and doctors can leave the provider network, or the insurer might change its drug formulary. You also might have a change in your health condition that requires more services or specialized care.
While the health plan you initially enroll in might work well for you today, plan changes might make it significantly more expensive or inadequate for your health care needs in a year. A careful review with an insurance agent can prevent unpleasant surprises and ensure you’re getting the coverage you need.
#5 Plan Termination
To maintain your Medicare coverage, you must continue paying your Part B monthly premium and your Medicare Advantage plan premium, if there is one. But there are several other reasons why you might lose your Medicare Advantage coverage through no fault of your own:
- The insurer drops the plan from its program.
- The Centers for Medicare & Medicaid Services discontinues a low-performing plan.
- The insurance carrier goes out of business.
Are Advantage Plans Worth Considering?
For Medicare beneficiaries who are healthy and want an all-in-one plan, the answer is yes. Premiums are generally lower for Advantage plans than Medicare Supplement plans. Most Medicare Advantage plans also include additional benefits that Original Medicare does not cover.
Extra benefits can include:
- Vision
- Dental
- Hearing
- Fitness memberships
In the end, the main reason why Medicare Advantage plans are often viewed as bad is because out-of-pocket expenses can add up to a significant amount. If you have frequent doctor visits, take lots of prescriptions, or need specialty care, these cost-sharing expenses will quickly offset any premium savings you might collect.
If You Want to Switch Back to Original Medicare
If your health condition changes or your Medicare Advantage plan isn’t providing the coverage options you need, all is not lost. Medicare Advantage enrollees can switch to Original Medicare under certain conditions.
- Within 12 months of when you first bought your Advantage plan
- During the annual open enrollment period
- If you qualify for a special enrollment period
If you switch to traditional Medicare during the first 12 months of buying your MA policy, you can still buy a supplement plan (Medigap) along with a prescription Medicare Part D Plan without undergoing medical underwriting.
FAQs
- Do Doctors Like Medicare Advantage Plans?
- Are Medicare Advantage Plans Free?
- Can I Choose Any Doctor With Medicare Advantage?
Ready to Learn More?
Choosing the right Medicare Plan is not a decision that should be taken lightly. With Policy Guide’s assistance, you will have access to the knowledge and expertise of professional agents who can help you compare different health plans, prices, and policies to ensure that you make an informed decision. Let us guide you through this process, so that your chosen plan best suits your needs.
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