Why Medicare Advantage Plans Are Bad | Top 5 Reasons Inside

Doctor Assisting Elderly Man With Paperwork

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. These Advantage plans are managed by private insurance companies, and those companies get to set many of their own rules when it comes to cost and coverage details. It often turns out that these Medicare Advantage plans are not as good as they seem, and many people decide to turn back to Original Medicare for their health care coverage. Keep reading as we give you five reasons why Medicare Advantage plans are bad.


5 Reasons Why Medicare Advantage Plans Are Bad

If you are a Medicare Advantage enrollee, you might be wondering why Medicare Advantage plans are bad. Not all the plans are bad, and some plans work out great for their enrollees. However, there are several reasons that these plans can be bad. Here are the most common reasons why people believe that Medicare Advantage plans are bad.


#1. Limited Choice Of Providers

Many Medicare Advantage plans utilize preferred provider organizations or PPO plans. You are required to utilize physicians included in the plan’s network for the visit to be covered. Unfortunately, the network included with many plans is quite small. This means that your choices might be extremely limited when it comes to selecting a healthcare provider. Generally, having more options when selecting a doctor is better. Having limited options is not a good thing. Original Medicare has the largest nationwide provider network of doctors, so an Advantage plan can severely limit your options.

In addition, most Advantage plans require referrals to see a specialist. This is almost always the case with a health maintenance organization or HMO plan. This means that you must get a referral from your primary care physician before you can visit a specialist. Not only can this add time to the process, but it also adds an extra expense. You would then be required to pay your copay to visit your regular doctor just to get the referral. This is on top of the copay you will need to pay when you finally see the specialist. This can be especially costly to people with disabilities or others who need to visit the doctor frequently.


#2. No Plans Are Really Free

When you hear that a Medicare Advantage plan has no monthly premium, you might assume that the plan is free. That is certainly not the case! Even though you might not be required to pay a monthly premium for the plan, there are many costs associated with these plans that make them anything but free. Since these plans utilize a fee-for-service model, you will find that these plans have many out-of-pocket expenses associated with them. Each time you visit the doctor, you will be charged a copay. If you receive certain treatments, you are generally responsible for a 20% coinsurance amount.

You might even find some Advantage plans that offer a Medicare Part B give-back benefit. This means that the plan will pay a portion or all of your Medicare Part B premium. However, remember the old saying, “There is no such thing as a free lunch.” When you begin to explore all the plan details, you will find that the items you have to pay for on the back end might outweigh the price of the premium.


#3. Plans Change Every Year

The Centers for Medicare and Medicaid Services allows plan providers to set their own rules regarding plan costs and networks. Most plans encounter some changes every year. You might find a plan that works great for you now, but the coverage details or costs could change the following year. This is why it is important for Medicare beneficiaries to compare plans each year during the Medicare Advantage plan selection period. Many enrollees simply sign up for an Advantage plan and stay on it for years without comparing other plans. This can lead to you being enrolled in a plan that is not the best fit since these plans change almost every year.


#4. High Out-Of-Pocket Maximums

Since Original Medicare has no out-of-pocket limit, Medicare Advantage plans are supposed to help with this issue. However, many of the plans have very high limits. In some cases, the limit could be as high as $7,000. This means that you would be required to pay this amount before your Advantage plan starts to cover services at 100%.

Often, a combination of Original Medicare and a Medigap plan can help cover these costs more effectively. Since the Federal government prohibits you from being enrolled in both an Advantage plan and a Medigap plan, you must choose one or the other. Medigap is often better at helping control your overall costs than a Medicare Advantage plan. Again, this shows the importance of carefully comparing plans and evaluating the total overall cost of the plan before making a decision.


#5. You May See A Nurse Practitioner Instead Of Doctor

Another one of the disadvantages of Medicare Advantage plans is the fact that you might not always get to see a doctor. Most Medicare Advantage plans have contracts with their network providers that pay them a flat fee for each patient they see. Per the terms of the contract, the amount of money the provider receives is the same for each office visit — regardless of the medical professional who actually sees the patient. These providers will often use nurse practitioners to see patients for a couple of reasons. Nurse practitioners are generally cheaper than doctors, so it lowers the overall expenses of the provider. Plus, it can allow these providers to see more patients during the day, thus leading to more money being collected. Since most people want to see a doctor when they visit a medical facility, this can be a disadvantage for people on Medicare Advantage plans.


What Do Medicare Advantage Plans Cover?

Registered Nurse Assisting Elderly Woman With Physical Therapy

Since Medicare Advantage plans are provided by private insurance companies, the coverage details can vary according to the specific plan in which you are enrolled. First, all Medicare Advantage plans must provide at least the same minimum level of coverage as Original Medicare. So, 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. So, 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.

Medicare Part B is more like traditional health insurance. MA plans must also provide coverage for these items. This includes doctor visits, lab work, preventive services, and outpatient services. Coverage is also provided for durable medical equipment, certain vaccinations, and health screenings. Even with an MA plan, these services often come with an out-of-pocket expense. Most of these plans utilize cost-sharing models that include copays and deductibles. In some cases, coinsurance amounts must be paid when certain services are received.

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 of these Medicare Part C plans usually includes Part D prescription drug coverage as well. Having a prescription drug plan benefit can help with the costs of monthly medications for many individuals. Likewise, many MA plans offer dental and vision benefits. Remember that Original Medicare does not provide any dental or vision benefits. However, the majority of Advantage plans include benefits for dental and vision care.

Lastly, some of these plans provide coverage for other items that you might not otherwise think about. You might find plans that cover hearing aids, and some of them 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 in which you are interested. The insurance company that sells the plan should have detailed documentation that explains what is covered along with the costs associated with the plan. You should always do your research to know what you are getting before enrolling in any Medicare Advantage plan.


Are Medicare Advantage Plans Worth It?

The answer to this question really depends on your specific personal situation. In some cases, a Medicare Advantage plan can be a great way to lower your overall health care costs. However, for some people, these plans might end up costing them even more money in the long run. Typically, Medicare Advantage plans are great for those people who do not receive medical treatment often. If you have only a few health issues and rarely visit the doctor, then one of these plans might be great for you. It could allow you to have coverage with no monthly premium, and your out-of-pocket costs would be low since you rarely receive medical services.

However, for someone who has some health issues, these plans are not always worth it. They often result in higher overall health care costs because you are constantly paying copays and coinsurance amounts when you visit the doctor and receive treatment. In addition, some of these plans have extremely high out-of-pocket limits. This means that you might be required to pay $6,000 or more per year for your medical care due to these high maximum out-of-pocket amounts.

Medicare beneficiaries should carefully consider all their options before enrollment in a Medicare Advantage plan. Speaking with a licensed insurance agent in your local area can also be a good idea. Similarly, use the Medicare plan comparison tool available at Medicare.gov to help you review and compare plans. Your personal 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 is a better fit for your needs.


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 select any other coverage. Remember that MA plans roll 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.

For those who opt against a Medicare Advantage plan, you may choose to enroll in Original Medicare only. This means that you will receive Part A and Part B coverage directly 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. Others will choose to 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.

Lastly, you might also choose to 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 things like your copays, deductibles, coinsurance amounts, and other items that you would normally need to pay for out of your pocket. Several of these plans, like Plan F or Plan G, even provide coverage for 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 the coverage limits of Medicare. Many people find that a combination of Original Medicare and Medigap insurance is the best fit for their needs.


The Bottom Line

While Medicare Advantage plans can be good for some people, many Medicare enrollees find that 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 personal situation to determine the best health insurance plan for you. Even though Advantage plans might seem enticing because they can even eliminate your Part B premium in some cases, Social Security recipients often find themselves spending more money on their total medical costs with these plans. If you are unsure of whether one of these plan options is right for you, contact a trusted insurance agent to help you through the decision process.


Frequently Asked Questions


What is the biggest disadvantage of Medicare Advantage?

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.


Can I drop my Medicare Advantage plan and go back to Original Medicare?

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.


Do people who have a Medicare Advantage plan have to pay extra?

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.