Why Medicare Advantage Plans are Bad (Top 7 Reasons)
Did you know that enrollment in Medicare Advantage Plans has doubled over the past decade? How is it possible that there could be problems with Medicare Advantage plans (also known as Medicare Part C, MA, or MAPD) when enrollment numbers are increasing? Sadly, we’ve heard from many consumers who have had MAPD as well as doctors who don’t like them. Perhaps you’ve heard from a family member or friend who told you a story or two about some of the drawbacks of Medicare Advantage.You may start to worry that maybe a MAPD plan is a bad choice.
Don’t worry. We’re going to clarify everything about MAPD plans for you so you can make an informed decision about your Medicare insurance. By the end of this post, you’ll be able to figure out if MAPD is right for you or if another plan is a better fit.
Why Medicare Advantage Plans Are Bad
When you begin your Medicare plan journey, you need to figure out what type of coverage is best for your situation.There are 3 common options that you’ll need to pick:
- Original Medicare (Medicare Part A and Medicare Part B)
- Original Medicare (Medicare Part A and Part B) + Medigap Plan (Predictable Costs & Coverage)
- Medicare Advantage Plan HMO/PPO (Unpredictable Costs & Coverage)
It Boils Down To This:
MAPD can be extremely confusing. These plans are PPO and HMO plans. If you’re familiar with HMO and PPO plans, then you’ve probably experienced frustration at some point with these plans.
Any time there’s confusion with insurance, then there’s a chance for unexpected costs and surprises.
I know I don’t like surprises with my insurance coverage. Unfortunately, that can happen with MAPD. Let’s go over these plans in more detail and explain why they’re bad for certain shoppers.
What Are The Advantages And Disadvantages Of Medicare Advantage Plans?
Similar to every other type of insurance, there are pros and cons of Medicare. MAPD plans are no different. MAPD is often misunderstood because, unlike Medigap, MA plans often change every year and so can their Medicare benefits, networks and more. This is a huge issue and can quickly turn into many Medicare Advantage nightmares that we’ll go over.
Advantages of MA Plans
Advantage plans have their place. The two biggest ways they can be helpful are with eligibility and affordability:
Eligibility
Medicare Advantage plans are a great safety net for anyone who isn’t eligible for a Medicare Supplement insurance plan. There are some people who enroll in a MAPD because of their health. Medicare beneficiaries who can’t qualify for a Medigap plan due to health reasons, then a MA plan is a good option. It’s definitely better than nothing so you’re not on the hook for Original Medicare’s 20% Coinsurance.
Affordability
If you are unable to afford the premiums of a Medigap plan, then a MA plan can provide more benefits than if you were just on traditional Medicare. But consider this: The biggest issue you need to be aware of is the “Pay Now or Pay Later” scenario. Medigap monthly premiums are predictable and your out of pocket expenses are lower. The opposite happens with Medicare Advantage.
That “Low or No Premium” Medicare Advantage plan may end up costing you THOUSANDS of dollars with the plan’s Maximum Out of Pocket at anytime.
What’s worse is if you happen to go to an out of network health plan provider or your procedure isn’t authorized — your Medicare Advantage Plan will pay very little or nothing at all for your treatment.The plan MAY NOT PAY if you go out of your Medicare Advantage plan network.
More on that later.
Disadvantages of Medicare Advantage Plans
What are the biggest drawbacks of Medicare Advantage plans? There are several problems with Medicare Advantage plans. They have more restrictions on which doctors and hospitals you can use compared to Original Medicare with a Medigap plan. Let’s look at 7 of the most popular reasons. They include:
- Networks
- Referrals
- Prior Authorizations
- Frequent Expenses
- Out-of-Pocket Maximums
- Plan Changes
- Medicare is no longer managing your healthcare
1. Networks
Perhaps the biggest drawback of a Medicare Advantage plan is that most have networks. This means your plan is most likely structured around a specific local region. This can be a real issue if you need to see a specialist outside of your network. Want an example? What if you were diagnosed with cancer and the best cancer hospital in your area is out of network? You’re out of luck! Picture this situation: My parents live in Port Richey, FL and have Original Medicare with a Medigap Plan. If either one of them were diagnosed with cancer, they would immediately look for one of the best cancer hospitals in Florida — for example, the Mayo Clinic in Jacksonville, FL. News flash: If they had an Advantage plan instead of a Medigap plan, they wouldn’t be able to get treatment at the Mayo Clinic. It would have been out of the MA plan’s network. Imagine their shock, frustration and anger that the quality of their care is going to be determined by a plan’s network. This situation is easily avoided with Original Medicare and a Medigap Plan because there are no networks.
2. Referrals
Do you hate the idea of getting a Referral for any specialist you want to see? That’s exactly what is needed with many of these plans. With these plans you’ll choose your primary physician for your general care and may need a referral for specialists.
- Want to see a cardiologist? You’ll need a referral.
- Want to see an orthopedic doctor? You’ll need a referral.
- How about an Endocrinologist? Get a referral
- Neurologist? Referral!
Does getting a referral for specialists sound stressful and a major inconvenience? If you said yes, then a Medicare Advantage plan may not be the right choice.
3. Prior Authorizations
Nearly all Medicare Advantage enrollees are in plans that require Prior authorization for some services. Picture this: You’re not feeling well. You follow the MAPD rules by doing the following:
- You make an appointment with your primary physician.
- You get a referral to a specialist inside your network.
- You make another appointment to the specialist.
- You’re finally at the appointment to diagnose and treat your condition.
That’s when you find out that your specialist may need to get prior authorization before the test, service or medication is approved. At this point you realize that your doctor’s test, service, or medication may get denied! You see, MA plans are run by insurance companies. These companies are a business and businesses need to make a profit in order to survive. One of the ways that companies remain profitable is to make sure they aren’t paying for claims that they feel is unnecessary and unreasonable. They may have strict requirements for your physician to meet in order for these prior authorizations to be approved. The end result is it’s possible to be denied or delayed for days. This is a common reason why MA plans are labeled “bad”. Quite simply: Medicare Advantage plans often have a process that they follow and the results may not be to your liking.
4. Frequent Expenses
You’ve probably seen many commercials talking about all the free Medicare Advantage plans around the country. With MAPD, you’re going to pay something for any medical visit. This can be in the form of a Copayment and/or coinsurance. Those “free” plans can quickly get very expensive.
Copayments & Coinsurance
Your copayments and coinsurance amounts may be different depending on the specific MAPD plan. With that said, medical services that you may pay coinsurance or a copayment for under an MA plan can include:
- Primary care physician visits
- A visit to a specialist
- Prescription drugs
- Eyeglass lenses
- Chiropractic coverage
- Emergency room visits
- Dental services
- Ambulance rides
- MRI or CT scans
- Days in a Skilled nursing facility
- Outpatient surgeries
- Inpatient hospital days
- Outpatient rehabilitation
- And more
These copayments can add up fast. For example, if you need to see a specialist: You’ll pay a copay for your primary doctor to get a referral to a specialist…where you’ll have to pay another copay.
5. Out-of-Pocket Maximums
Unlike Original Medicare, a Medicare Advantage plan has an out-of-pocket maximum (MOOP). This can actually be a good thing because you potentially only have to pay up to maximum amount before all your covered medical costs are paid for.
But here’s potential bad news:
Let’s say you were diagnosed with cancer. Depending on your MA plan, your Maximum Out of Pocket (MOOP) costs could range anywhere from $3,000 to almost $8,000. Reminder: Your MOOP is capped annually. But this could lead to a potential disaster:
- Example: Your Medicare Advantage Plan has a MOOP of $8,000.
- Perhaps your cancer treatment happens in November and you reach your MOOP. However, you treatment needs to continue into January.
- Guess what? Your MOOP resets at the beginning of the calendar year.
- You are responsible for the first MOOP of $8,000 in November and a new MOOP of $8,000 beginning in January.
- You’ll be responsible for paying $16,000 in the span of a few months.
6. Plan Changes
Original Medicare with a Medigap plan is predictable. The coverage is the same from year to year. Same Medicare doctors and same Medigap plan benefits.
This is not the case with Medicare Advantage coverage. Every year you’ll need to shop plans and make sure your preferred doctors are in the plan’s network? To make matters worse, providers (hospitals and/or physicians) can leave a Medicare Advantage at anytime during the year.
7. Medicare is no longer managing your healthcare
One of the biggest reasons why MAPD plans are bad is that your healthcare is now managed by an insurance company. Meaning that the insurance company makes all of the decisions about your health care needs.
News flash: when you have a Medigap plan with Original Medicare — then Medicare makes those health care decisions — Not the insurance companies! You probably see how this can be a big issue. Simply ask yourself: Do you want a company making your health care decisions? For this reason alone, many people switch back to Original Medicare.
Frequently Asked Questions
Bottom Line
Choosing a Medicare plan can be extremely confusing. It’s even more confusing when you mix in complicated plans such as Medigap or Medicare Advantage.
Just know that REMEDIGAP is here for you. We’re independent licensed brokers who shop the market for the best available plans. In other words, we’re your personal Medicare agent; we work for you and not the insurance companies. We have the freedom to focus on you and your Medicare coverage needs.
Thanks for reading our post: Why Medicare Advantage Plans Are Bad. If you’d prefer to learn more about how plans work and compare plans such as Medicare Supplement Plan N vs Plan G, simply contact us today with your questions.
Michael Quinn is a seasoned Medicare insurance expert and licensed agent dedicated to simplifying the complexities of healthcare coverage. With over a decade of experience, he is a trusted advisor known for his compassionate guidance and commitment to empowering individuals. As the Cofounder of REMEDIGAP in 2013, Michael offers unbiased resources and personalized support to assist clients in making informed decisions.
His expertise has been recognized on reputable platforms such as USA Today and Nerdwallet, solidifying his reputation as a reliable and knowledgeable industry leader. With a Master's Degree in Communicative Disorders, Michael combines strong communication skills with a genuine passion for positively impacting lives through tailored insurance solutions.
Written by Michael Quinn
Licensed Broker, REMEDIGAP Founder
Fact Checked by Joann Quinn
Chief Compliance Officer
As a licensed insurance broker, REMEDIGAP upholds the principles of integrity in our editorial standards and ensures transparency in how we receive compensation from our insurance partners.
