Disadvantages of Medicare Advantage Plans


Disadvantages of Medicare Advantage Plans

With Original Medicare (Parts A and B and maybe D), you know what you get. Hospitalization is almost free, and you pay 20% of everything else, except for part D drug co-payments. You have to pay an annual deductible, which is small. On the other hand, there is no out-of-pocket limit. If you are really ill with highly expensive treatments, you can have Original Medicare and still be liable for perhaps hundreds of thousands of dollars. This can be true even if you have a Medigap plan.

Since Medicare Advantage Plans have an out-of-pocket limit of around $6,500, a Medicare Advantage plan would seem to be a no-brainer. But there are a few things to consider that may be negatives for you, in your particular circumstances.

Types of Medicare Advantage Plans

With Original Medicare, you can see any provider who accepts Medicare patients. Some Medicare Advantage plans of the HMO or PPO type restrict the providers you can see. If you have a long-standing relationship with a provider that is important to you, you may not be able to see that provider and be covered. Fee for Service (FFS) Medicare Advantage plans allow you to see any provider, but they generally have higher premiums. HMO and PPO type plans also usually restrict the hospitals you can use.

Annual Changes

One of the assumptions that Congress made in creating Medicare Advantage was that the private companies that offered it would need to make a profit. They are not like Original Medicare, which is mandated to provide services regardless of cost. Medicare Advantage plans assess their profitability annually and may choose to stop offering services in your county or state, increase premiums, reduce services, add or exclude providers, and change the benefits covered. If they choose not to cover a medication that you need, and it is not one that Medicare mandates that they cover, you are out of luck.

Limitations on Services

Medicare Advantage plans are required to cover every type of service that Original Medicare covers, but they do not have to provide it in unlimited volume. Just as Original Medicare limits the number of, for example, physical therapy sessions, and requires that you show progress, Medicare Advantage plans may impose limits on the number and type of services they provide. Some Medicare Advantage plans have been found to have restricted services in ways that do not meet the normal “standard of care” dictated by the medical profession. The Centers for Medicare and Medicaid Services (CMS), which manages Medicare, has sanctioned such plans and forced a few out of the business.

Switching Plans

If you are not satisfied with your Medicare Advantage plan, you can change it during open season, which runs from November 7 to December 15 of each year. If your Medicare Advantage Plan does not have an A rating from CMS, you can also switch to a plan that does have an A rating anytime during the year except for the first week in December. (Of course, your county may not have an A-rated plan.) If it is your first year on a Medicare Advantage plan, you can drop it at any time during the year and return to Original Medicare. For more details, see CMS on changing Medicare Advantage Plans.

Summing It All Up

A Medicare Advantage plan may be exactly what you need. If you have high expenses, the out-of-pocket can be a godsend. But, depending on your needs, a Medicare Advantage plan may be a worse choice for you. For assistance, please contact a professional health insurance broker at Medicare Benefits US.

 

  • http://SeniorSavingsNetwork.org/ Christopher Westfall

    Good points.. Videos from doctors and HHS about Medicare Advantage plans are at this helpful link: http://AllAboutMedicareAdvantage.com

  • Deb Hartman

    this information needs to be updated. The Annual Enrollment period is from October 15 – December 7 each year for Advantage plans.

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