Most retirees turn to Medicare for their health insurance coverage, but Medicare coverage can often be complex and confusing. Many people are enrolled in only Original Medicare, while others add on a Part D prescription drug plan or Medicare supplement insurance.
On the other hand, some people turn to a Medicare Advantage plan to provide all their coverage through a single policy. Private insurance companies manage these Advantage plans, and those companies get to set many rules regarding cost and coverage details.
Often, these Medicare Advantage plans are not as good as they seem, and many people turn back to Original Medicare for their health care coverage. Keep reading as we give you five reasons why Medicare Advantage plans are inadequate.
5 Reasons Why Medicare Advantage Plans Are Bad
You might wonder why Medicare Advantage plans are bad if you are a Medicare Advantage enrollee. Not all the plans are bad, and some work out great for their enrollees.
However, there are several reasons that these plans can be bad. Here are the most common reasons people believe Medicare Advantage plans are inadequate.
KEY TAKEAWAYS
- Medicare Advantage plans can be great for some people, but many people end up paying more for their overall healthcare costs with these plans.
- The coverage under a Medicare Advantage plan usually includes hospital stays, inpatient care, doctor visits, preventive care, prescription drugs, dental, vision, hearing aids, and more.
- Those with significant health issues may find Medicare Advantage plans more costly due to copays, coinsurance, and deductible costs.
What Do Medicare Advantage Plans Cover?
Since private insurance companies provide Medicare Advantage plans, the coverage details can vary according to the specific plan in which you are enrolled. However, all Medicare Advantage plans must provide at least the same minimum level of coverage as Original Medicare.
Hospital Stays & Inpatient Care
The plans will provide coverage for items that are typically covered under Medicare Part A and Medicare Part B. Remember that Medicare Part A is hospital insurance. Your Medicare Advantage plan will cover hospital stays and other inpatient care, such as a stay in a skilled nursing facility. Most Advantage plans do not cover time in an assisted living facility.
Doctor Visits & Preventive Care
Medicare Part B is more like traditional health insurance. MA plans must also provide coverage for these items. This includes doctor visits, lab work, and preventive and outpatient services. Coverage is also provided for durable medical equipment, vaccinations, and health screenings.
Even with an MA plan, these services often require an out-of-pocket expense. Most plans utilize cost-sharing models that include copays and deductibles. Sometimes, coinsurance amounts must be paid when specific services are received.
Prescription Drugs
In addition to the minimum benefits mentioned above, most Medicare Advantage plans provide additional benefits to entice people to get signed up. Enrollment in one Medicare Part C plan usually includes Part D prescription drug coverage. A prescription drug plan benefit can help with the costs of monthly medications for many individuals.
Dental & Vision
Many MA plans offer dental and vision benefits. Remember that Original Medicare does not provide these benefits. However, the majority of Advantage plans include them.
Hearing Aids & Special Coverage
Lastly, some of these plans cover other items you might not otherwise consider. For example, you might find plans that cover hearing aids; some even come with free gym memberships! Some MA plans are considered special needs plans that tailor their coverage to those with specific diseases or medical needs.
The best way to determine what is covered is to examine the coverage details of the specific plan you are interested in. The insurance company that sells the plan should have detailed documentation that explains what is covered along with the costs associated with the plan. It would help if you always researched what you are getting before enrolling in any Medicare Advantage plan.
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Are Medicare Advantage Plans Worth It?
The answer to this question depends on your specific personal situation. Sometimes, a Medicare Advantage plan can be a great way to lower your overall healthcare costs. However, for some people, these plans might cost them even more money in the long run.
- Typically, Medicare Advantage plans are great for those people who do not receive medical treatment often. One of these plans might be great for you if you have only a few health issues and rarely visit the doctor. It could allow you to have coverage with no monthly premium, and your out-of-pocket costs would be low since you seldom receive medical services.
However, these plans are not always worth it for someone with some health issues. They often result in higher healthcare costs because you constantly pay copays and coinsurance amounts when you visit the doctor and receive treatment.
In addition, some of these plans have incredibly high out-of-pocket limits. These high maximum out-of-pocket amounts might require you to pay $6,000 or more per year for your medical care.
Medicare beneficiaries should carefully consider all their options before enrolling in a Medicare Advantage plan. It can also be a good idea to speak with a licensed insurance agent in their local area.
Similarly, use the Medicare plan comparison tool to help you review and compare plans. Your situation will dictate whether or not a Medicare Advantage plan is worth it. You might find that a combination of Original Medicare and a Medigap plan better fits your needs.
TIP
You can switch between Original Medicare and Medicare Advantage plans during annual open enrollment periods. However, it is important to note that Medigap and Part D plans may be more expensive if you don’t enroll during your initial enrollment period.
Coverage Choices For Medicare
Once you become eligible for Medicare, you are not required to sign up for a Medicare Advantage plan. You have several other choices when it comes to traditional Medicare coverage. A Medicare Advantage plan is one choice. Enrollees who select this option will not need to choose any other coverage. Remember that MA plans combine all your Medicare coverage into a single plan, and they even provide additional benefits in most cases.
You also will not need to worry about Medicare supplement insurance because you cannot enroll in both an MA plan and a Medigap policy.
Original Medicare
For those who opt against a Medicare Advantage plan, you may choose to enroll in Original Medicare only. You will receive Part A and Part B coverage through the Medicare program. There are no additional requirements for coverage, so Part A and Part B are all that you have to sign up for.
Prescription Drug Coverage
Others will add a Part D prescription drug plan to their Original Medicare coverage. These plans are beneficial to people who take regular medications. They can help cover the costs of your prescription drugs.
Medigap (Supplemental Insurance)
Lastly, you might enroll in Original Medicare and add a Medicare supplement policy. These Medigap plans will help cover your out-of-pocket costs associated with Original Medicare.
They cover your copays, deductibles, coinsurance amounts, and other items you would typically need to pay for out of your pocket. Several of these plans, like Plan F or Plan G, even cover some items not covered by Original Medicare.
Some examples include the first three pints of blood during a transfusion, foreign medical emergencies and hospital stays that extend past Medicare’s coverage limits. Many people find that a combination of Original Medicare and Medigap insurance best fits their needs.
The Bottom Line
While Medicare Advantage plans can benefit some people, many Medicare enrollees find these MA plans are not the best fit.
Many Americans choose to select one of the other Medicare coverage options available, such as a Medicare supplement plan or a Medicare Part D plan. You should examine your situation to determine your best health insurance plan.
Even though Advantage plans might seem enticing because they can even eliminate your Part B premium in some cases, Social Security recipients often spend more money on their total medical costs with these plans.
If you are unsure whether one of these plan options is right for you, contact a trusted insurance agent to help you decide.
Frequently Asked Questions
One of the biggest disadvantages of Medicare Advantage is the total cost of coverage. Though many of these plans have low premiums — some even have zero premium — they often nickel and dime their enrollees. You might find yourself paying a copay each time you visit the doctor or receive medical treatment.
Similarly, your coinsurance amounts might be higher than you expected. Make sure that you look at the total overall cost of these plans and not just the monthly premium amounts. Many people believe that an Advantage plan is the best option because of a low premium.
However, they are often disappointed once they discover how much they have to pay when they visit the doctor or get medical care.
Yes, you can drop your MA plan and go back to Original Medicare. However, you cannot do this at just any time. You must wait until Medicare’s annual open enrollment period to make this change.
You might find during the middle of the plan year that your MA plan is costing you more than expected. Unfortunately, you are stuck with that plan until you can make a change during open enrollment. This is why it is extremely important to carefully select the plan in which you wish to enroll. Failure to thoroughly research your plan options can leave you stuck in a plan that is not the best fit.
It depends on the specifics of the plan. Some Medicare Advantage plans cost less than your normal Medicare Part B premium. There are some MA plans that have no premium at all.
On the other hand, some of the best Medicare Advantage plans (like the Kaiser plan) that have a five-star rating may have higher monthly premiums. Even though you might be paying more in monthly premiums, these plans often include many extra benefits that are not included with Original Medicare. This could include dental and vision benefits, prescription drug coverage, and even free gym memberships.
The cost of a Medicare Advantage plan depends on the coverage details as well as the insurance company offering the plan. Since the insurance companies which offer these plans get to set their own rates, you will find that the rates can vary widely from one plan to the next.
You can find a Social Security Administration office near you by using our SSA office locator and searching for your closest location.
