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 when enrollment numbers are increasing? Sadly, we’ve heard from many consumers who have had Medicare Advantage (MA) 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 disadvantages of Medicare Advantage.
You may start to worry that maybe a Medicare Advantage plan is a bad choice.
We’re going to clarify everything about Medicare Advantage plans for you so you can make an informed decision about your insurance. By the end of this post, you’ll be able to figure out if a Medicare Advantage plan is right for you or if another plan is a better fit.
Why Medicare Advantage Plans Are Bad
When you begin your Medicare 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
- Original Medicare + Medigap Plan (Predictable Costs & Coverage)
- Medicare Advantage Plan HMO/PPO (Unpredictable Costs & Coverage)
It boils down to this:
Medicare Advantage plans can be extremely confusing. These plans are HMOs and PPOs. If you’re familiar with HMOs and PPOs, 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 Medicare Advantage plans. Let’s go over these plans in more detail and explain why they’re bad for certain Medicare shoppers.
What Are The Advantages And Disadvantages Of Medicare Advantage Plans?
Like every other type of insurance, there are pros and cons. Medicare Advantage plans are no different. Medicare Advantage is often misunderstood because, unlike Medigap, MA plans can change every year and so can their benefits, networks and more.
This is a huge disadvantage.
Medicare Advantage plans have their place. The two biggest ways they can be helpful are with eligibility and affordability:
Medicare Advantage plans are a great safety net for anyone who isn’t eligible for a Medigap plan. If you can’t qualify for a Medigap plan due to health reasons, then a Medicare Advantage plan is a good option. It’s definitely better than nothing so you’re not on the hook for Original Medicare’s 20% coinsurance.
If you are unable to afford the premiums of a Medigap plan, then a Medicare Advantage can provide more benefits than if you were just on Original Medicare.
But consider this: The biggest issue you need to be aware of is the “Pay Now or Pay Later” scenario. Medigap 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 care 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.
What are the biggest disadvantages of Medicare Advantage plans? They include:
- Prior Authorizations
- Frequent Expenses
- Out-of-Pocket Maximums
- Plan Changes
- Medicare is no longer managing your healthcare
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 — like the Mayo Clinic in Jacksonville, FL.
News flash: They wouldn’t be able to get treatment at the Mayo Clinic because it would be out of their Medicare Advantage 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.
Do you hate the idea of getting a referral for any specialist you want to see? That’s exactly what is needed with many Medicare Advantage 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 like a major nuisance? If the answer is yes, then a Medicare Advantage plan may not be the right choice.
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 Medicare Advantage plan 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, Medicare Advantage 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 Medicare Advantage plans are labeled “bad”.
Quite simply: Medicare Advantage plans have a process that they follow and the results may not be to your liking.
With Medicare Advantage, you’re going to pay something for any medical visit. This can be in the form of a copayment and/or coinsurance.
Copayments & Coinsurance
Your copayments and coinsurance amounts may be different depending on the specific Medicare Advantage 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.
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 Medicare Advantage 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 nightmare:
- 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.
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.
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.
One of the biggest misunderstandings about Medicare Advantage is that your care is 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?
Frequently Asked Questions
Doctors want to provide appropriate and reasonable care to their patients. They don't want to go chasing prior authorizations in order to provide care. They also don't want to deal with medical decisions that are financially based.
The possibility that there may be pressure on doctors to cut corners to save money is not ideal and most doctors don't care for that model of care. Bottom line: It isn't in the best interests of a patient's health.
The worst Medicare Advantage plan is any plan that is misunderstood. The simple truth is Medicare Advantage plans can be very confusing and they change annually. However, if you fully understand everything about these plans, are comfortable with their unexpected costs and fine print, then it's possible to avoid the pitfalls of the plan.
Are Medicare Advantage plans a good deal?
Sure...unless you get sick.
The best candidate for Medicare Advantage is someone who’s healthy,” says Mary Ashkar, senior attorney for the Center for Medicare Advocacy. “We see trouble when someone gets sick.”
Here are some examples of in-network services from a popular Medicare Advantage Plan in Florida:
- $300: Ambulance
- $175 Hospital stay per day for first 10 days
- Up to 20% co-pay for diabetic supplies
- Up to $125 co-pay for diagnostic radiology
- Up to $100 co-pay for lab services
- Up to $100 co-pay outpatient x-rays
- $35 or up to 20% co-pay depending on the therapeutic radiology service
- 20% of the cost of renal dialysis
You can see how a Medicare Advantage Plans carefully review and price the co-pays in the summary of benefits for each plan you are considering.
Going on Medicare can be extremely confusing and complicated. It’s even more confusing when you mix in 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 work for you and not the insurance companies. We have the freedom to focus on you and coverage needs. Contact us today with your questions.