Why Medicare Advantage Plans Are Bad
August 9, 2019
Reviewed and Updated by Troy Frink,
Someone may have told you a million reasons why Medicare Advantage plans are bad. The truth is they’re just misunderstood. More than 34 percent of Medicare beneficiaries are enrolled in Medicare Advantage (MA) plans, so they can’t be all bad.
What Is Wrong With Medicare Advantage Plans?
Medicare Advantage plans have pros and cons like any other type of health insurance plan. They may not make sense for some people, but they can be extremely beneficial for others, and here’s why.
They Can Be Expensive
Medicare Advantage plans all come with monthly premiums. Some of them have $0-premiums, but the average monthly premium in 2019 is $28. Some people may think, “free,” when they hear “$0 premium,” but that’s not necessarily the case. Even if you enroll in a MA plan, you may still be responsible for paying your Medicare Part B premium and other costs, like copayments.
Along with monthly premiums, MA plans can come with high out-of-pocket maximums. An out-of-pocket limit is designed to protect you. Once you reach your limit, the insurance company pays for your covered services. However, some plans’ out-of-pocket limits can be as high as $6700.
The out-of-pocket limit resets at the beginning of the year, but you could end up paying $13,400 if you have two major procedures within a few months.
For example, if you have hip replacement surgery in November, you might reach the $6700 limit just from that. Then,after your out-of-pocket maximum resets in January, you need knee replacement surgery. You would owe another $6700, just a few months later. You would then be covered for the rest of the year, but that total of $13,400 within a few months can certainly hurt.
Medicare Advantage Plans Have Smaller Networks
Most MA plans have provider networks you have to stay within. You can go out-of-network to find a doctor, but you may have to pay significantly more than if you stayed in your network.
You may even go to your favorite doctor and get turned away because your doctor isn’t in your plan’s coverage network.
Many people don’t realize that MA plans have networks when they enroll, and that may be why Medicare Advantage plans are bad according to some people.
Specific Coverage Areas
Most MA plans have coverage specific to one location. That’s great if you’re close to home and you need medical treatment, but that means your plan may not cover a doctor’s appointment if you get sick when you’re out of town. Original Medicare is a federal program, so it is likely that you’ll be able to find a doctor when you’re on vacation in another part of the country.
Your Plan Could Change Every Year
Many Medicare Advantage plans change their benefits every year. Sometimes they add or remove providers, covered services, and/or prescription drugs on the plan’s formulary.
Plans can also change how much you pay in monthly premiums, copays, and/or deductibles.
That means you’ll have to change plans if your current plan drops vision coverage, and you signed up for your plan specifically because you wanted the annual eye exam benefit. The problem is that you can only change plans during certain parts of the year.
Most people have to wait until the Annual Enrollment Period (AEP), which is from October 15 – December 7 to enroll in new plans or make changes to existing ones. Exceptions to that rule include people who are about to turn 65, or who just had their 65th birthday.
The Initial Enrollment Period (IEP) for people aging into the program is the three months before you turn 65, and the three months after. During that seven-month period you can choose a new Medicare health insurance plan. If you are eligible due to ALS or ESRD, your IEP is the week after your diagnosis. If you are eligible due to receiving SSDI for at least 25 months, your IEP is your 25th month of benefits.
You may qualify for a Special Enrollment Period (SEP) if you meet certain conditions. Your SEP may be lifelong or temporary, but it will allow you to make changes to your plan outside of the other enrollment periods.
Some Plans Require Doctor Referrals
Many Medicare Advantage plans are HMOs, which require you to select a primary care provider (PCP). In most cases, your PCP will need to give you a referral before you can see a specialist.
To illustrate what this looks like, let’s take the example of a man* who has a MA HMO. The man notices a mole that’s changed in size and shape. He knows he needs to see a dermatologist because he’s had skin cancer before, and the new mole likes like his previous carcinoma.
The man can’t just go to a dermatologist, however. He needs to first make an appointment with his PCP, and the PCP can then refer him to a dermatologist. The man will owe a copay to see his PCP, and then he’ll need to pay the dermatologist a copay, too. Specialist copays are usually higher than PCP copays. You may pay $10 for a PCP visit, but $40 for a specialist.
On the flip side, because the man went to his primary physician first, he got a really good recommendation and was able to see one of the best dermatologists in his town on short notice. That doctor referral requirement may have brought more help than harm.**
*This example is not real and only represents a possible circumstance.
**Not all doctors will be able to see you on short notice, regardless of your plan.
Benefits of Medicare Advantage Plans
The reasons why MA plans are good may outnumber why Medicare Advantage plans are bad. The truth is everyone has different healthcare and financial needs. MA plans make sense for people who want coverage for a variety of health services.
Medicare Advantage Plans May Actually Cost Less
Even though you may still owe the Part B monthly premium, you could end up paying less overall if you have Medicare Advantage.
Your cost-sharing may also be less with a MA plan. If you only have Original Medicare, you will owe 20 percent of covered services, and Original Medicare will pay 80 percent of approved costs.
To illustrate what this looks like, let’s say you see your doctor because you have the flu. Your doctor charges Medicare $100. Medicare approves the charge and you owe $20.
Many MA plans have copays of $10 or less for doctor’s appointments. That $10 savings for one doctor’s visit may not seem like much, but it adds up over time.
Plans Can Be a “One-Stop-Shop” for Covered Services
Many Medicare Advantage plans are designed to provide the beneficiary with comprehensive healthcare coverage. MA plans can offer coverage for services Original Medicare does not, including vision, hearing, dental, and fitness classes.
Many MA plans even include prescription drug coverage, which Original Medicare does not.
That also means that you may have access to doctors with a variety of specialties, provided they’re in-network. All of your providers can coordinate with each other to provide a complete health plan to keep you in optimal health.
Find out Why Medicare Advantage Plans Are Bad (or Good) for You
A Medicare Advantage plan may be a good fit if you need coverage for a variety of services and you want to have a whole care team creating your treatment plan. A licensed agent with Medicare Plan Finder can help you determine if a MA plan is right for your budget and lifestyle needs. To get started, call us at 844-431-1832 or contact us here today.
