Are Medicare Advantage (MA) plans really bad?

At first glance, choosing a Medicare Advantage plan appears like a “no-brainer.” After all, they combine Part A (in-patient hospital and nursing care) and Part B (physician medical services). And in some cases, also include Part D (prescription medication) coverage.

Still, it’s important to read through the fine print and review the pros and cons. It’s the only way you can make an informed decision. And not fall victim to any pitfalls in these plans.

Are Medicare Advantage (MA) Plans bad?

Some Medicare Advantage enrollees are disappointed in their plan because of how complicated it can feel to get care. This is because many MA plans limit choices of doctors and hospitals to only those that are part of the plan’s network. If a member decides to go to out-of-network providers, they need a prior authorization. And often end up paying more for the care.

Network limits can be an issue for people who need complex medical care and visit doctors often. If you are a rather healthy person, an MA plan may actually not be a bad choice.

Disadvantages of Medicare Advantage

 The below is a list of disadvantages of MA plans.

• Most MA plans require members to get care from a given network of providers. In other words, members cannot visit just any doctor they like. And they must stick to the list of doctors and hospitals contracted with the plan. Some plans cover out-of-network providers. But members pay a higher fee. Using in-network providers costs less than using out-of-network ones.
• Original Medicare covers any provider who accepts Medicare throughout the U.S. So, it’s critical before selecting an MA plan to check if preferred providers are part of the plan’s network.
• Due to restricted and limited provider networks, MA plans are challenging for many people who live in rural areas. Research shows MA enrollees residing in rural areas are about two times as likely to switch to Original Medicare than MA enrollees living in urban areas.
• Some MA plans require a referral for specialist visits. It means members must ask for permission to see a specialist or visit a hospital. This is not the case with Original Medicare. Many people find the process of getting referrals burdensome since it can lead to delays or denials of services.
• Additional costs for coverage. Those with Original Medicare (Parts A and B) are charged a monthly premium, deductible, and coinsurance. If an enrollee also wants prescription drug coverage (not included with Original Medicare), they pay an additional monthly premium for it. Many MA plans include prescription drug coverage. But members may also face copays for specialist visits and deductibles for some prescription medications. If the MA plan has a monthly plan premium, an enrollee has to also pay that in addition to the Medicare Part B monthly premium.
• Variations in Medicare Advantage coverage by plan and location. Original Medicare coverage is the same throughout the United States. MA plans differ by a plan’s service area and any added benefits offered by the plan. If a member moves to a new state, they usually need to find a new MA plan that covers them in their new location.
• Medicare Advantage plans do not cover clinical research study tests or care.
  

Advantages of Medicare Advantage (MA)

However, MA plans aren’t all bad. The following is a list of advantages of Medicare Advantage plans.

• There are many MA plans with low monthly premiums, and some don’t have a monthly premium. (However, enrollees must continue to pay their Medicare Part B monthly premium to be in a Medicare Advantage plan.) MA plans tend to be more affordable than Medicare Supplement Insurance (Medigap) policies that help pay out-of-pocket costs in Original Medicare.
• Enrollees in an MA plan are still in the Medicare Program, so they still have Medicare rights and protections.
• MA enrollees get the same Medicare Part A and Part B coverage, but now through a private insurance plan. 
• Most MA plans offer added benefits that Original Medicare doesn’t cover like vision, hearing, dental, prescription drug coverage, and more.
• Out-of-pocket costs may be lower with an MA plan because they have a yearly limit on out-of-pocket expenses for Part A and Part B services. Once an enrollee reaches the plan’s limit, they pay nothing for covered services for the rest of the plan year. Each MA plan has different limits. And the limit can change each year. It’s important to check plans before enrolling in one.
• In many cases, enrollees can only use doctors, other health care providers, facilities, or suppliers who belong to the plan’s network. Some plans offer non-emergency coverage out of network. But typically at a higher cost.
• You can join an MA plan even if you have a pre-existing condition.
• A Medigap policy only works with Original Medicare. Individuals can’t use and can’t buy Medigap policies if they have an MA plan.

Why do doctors not like Medicare Advantage plans?

Sometimes MA plans aren’t profitable for doctors who accept them.

• Payment Structure. Doctors want to provide the best care, but they also need to make a profit. MA plans often use a capitated payment model. This means the MA plan carrier pays doctors a set amount for care per patient per month, regardless of the services provided. If care is more complicated than is typical for the diagnosis, the cost of care may be higher than what the plan carrier pays the doctor. Doctors don’t profit unless they keep care under budget. Apart from that, doctors reported longer payment processing times with MA plans compared to Original Medicare. This creates financial challenges for smaller practices.
• Less stable patient base. MA plans typically have networks of preferred healthcare providers. Doctors not in those networks may have limited chances to see patients with MA plans. And possibly reduces their patient base. Apart from that, even if patients enrolled in MA plans, they may change plans or providers more often than those in Original Medicare.
• Complexity. Doctors are also aware of how complicated and expensive health insurance can be. They know there is no one-size-fits-all policy, no matter what television commercials or insurance agents say. Too often, patients don’t have all the facts about their health care policies. Like those who don’t realize that signing up for an MA plan means they no longer have Original Medicare. And even if their doctor accepts Original Medicare, that doesn’t mean they’re in an MA plan’s network.
• Prior Authorization and Referral Requirements. Some health providers don’t like prior authorizations because they think of them as time-consuming. Private health insurance companies managing MA plans have prior authorization requirements in efforts to control costs. Health providers may have to obtain approval in advance before providing specific medical services and for certain prescription drugs.

Are Medicare Advantage plans a rip-off?

With any insurance plan, it’s important to know what you’re purchasing. A Medicare Advantage plan might seem like a rip-off if given wrong information about how it works. But it could be the best option under the right conditions.

With careful planning, individuals can choose a plan that’s the right fit for their needs. And not be surprised by unexpected costs down the road.

Is Medicare Advantage good or bad?

As discussed earlier, there are some drawbacks to MA plans. But they aren’t necessarily a bad option for everyone. And they get a bad rap because enrollees must understand how they work and their limitations. There are pros and cons of enrolling in a Medicare Advantage plan. They aren’t good or bad, but they can be complicated. Different people have different financial, health, lifestyle, and medical needs. So, not every plan works for every person. The best way to determine whether an MA plan is right for an individual is to plan ahead.

Individuals should estimate how much care they’ll need in a year based on their current health conditions, medications, and any future tests or procedures they know they’ll need. Comparing the cost of copays and premiums of different plans for their expected care helps determine which plan is their better option. They may decide the MA drawbacks aren’t worth the benefits for their health needs. But may be surprised to find an MA plan is the right one for them after all.

Here are a few examples of when Medicare Advantage plans may be a good option for some people.

• People who need plans with lower premiums. MA plans may have lower premiums than Original Medicare. And they have set annual out-of-pocket payment caps.
• People who live in a geographical area with access to different provider groups and don’t plan to move often. 
• If a favorite doctor or hospital belongs to the plan’s provider network. 
• People who need vision or hearing aid coverage. Original Medicare does not generally cover either of these benefits.