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 travel often. Medicare Advantage plans may not fit everyone’s needs, but this does not make them subjectively bad – 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:

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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 must pay attention to your cost share and the maximum out-of-pocket cap. You might find that Original Medicare Part A and B and 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 leave 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 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 the Centers for Medicare and Medicaid Services guidelines, 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 surprises and ensure you get 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?

The answer is yes for Medicare beneficiaries who are healthy and want an all-in-one plan. 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.


  • Do Doctors Like Medicare Advantage Plans?

    One of the reasons why Medicare Advantage plans are not popular with doctors is because they want to focus on patient care, not paperwork. Restrictions such as who they can refer to and making sure they get prior authorization for medical care hinder doctors’ ability to deliver timely, quality care. They also don’t like the possibility that a patient won’t receive optimal care because of an insurance carrier’s financial decision.

  • Are Medicare Advantage Plans Free?

    Although many insurance companies promote their $0-premium plans, Medicare Advantage plans are not free. You still must pay your Part B premium as well as coinsurance and copays as you go along.

  • Can I Choose Any Doctor With Medicare Advantage?

    Most Advantage plans use provider networks, but there are different rules depending on your plan. For example, HMO plans and SNPs restrict care to within the network. If you go outside of the network, the insurer can deny your claim. On the other hand, PPO plans and fee-for-service plans frequently allow you to seek care outside the network, but you’ll pay more than if you stayed inside the network.

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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Mark Prip

Since 2003, Mark Prip has been leading  Policy Guide, Inc., providing knowledgeable information about Medicare, life insurance, and dental coverage to clients in over forty states. With his unparalleled hands-on experience aiding countless Medicare beneficiaries in selecting an appropriate health plan, he is a prime example amongst other competitors for expertise and assistance. Mark has held his Florida Health & Life Insurance License (E051889) since 2003. View his license profile on the Florida Department of Insurance website.