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ARE ALL MEDICARE ADVANTAGE PLANS BAD
Updated: Aug 23
Michael T. Braden, July 11, 2024, Medicare Plans
ARE ALL MEDICARE ADVANTAGE PLANS BAD
Medicare Advantage plans are not for everyone. But are they terrible? When you enroll in coverage, consider several factors, including costs, availability, and the plan's network.
Many seniors turn to Medicare Advantage plans as an alternative to traditional Medicare, as healthcare costs continue to rise nationwide. However, despite the promises of these plans, they often entail drawbacks that are frequently overlooked. Medicare Advantage plans may include additional benefits such as prescription drug coverage, vision, dental, hearing aids, and possibly a free gym membership. Yet, people often complain about or criticize these plans. So, what are the disadvantages of Medicare Advantage?
WHY ARE MEDICARE ADVANTAGE PLANS BAD?
Misinformation and a lack of understanding can lead to Medicare Advantage nightmares. We are here to help clarify the issue. Medicare Advantage plans are not bad in every situation. However, they aren't a good fit for everyone. You should only enroll in Medicare Advantage coverage if it is the best fit for your unique situation. Below, we clarify why these seemingly too-good-to-be-true plans have a less-than-stellar reputation and answer the much-anticipated question of why Medicare Advantage plans are evil.
WHY DOCTORS DON'T LIKE MEDICARE ADVANTAGE
Some physicians have expressed concerns about Medicare Advantage plans. If you ask your doctor how they feel about Medicare Advantage plans, the answer may surprise you. Physicians do not favor Medicare Advantage plans for several reasons. These include:
Strict network of providers
The financial structure of the plans
Prior authorization is typically required for services.
If you are on the fence about enrolling in a Medicare Advantage plan, it is essential to weigh the pros and cons from your physician’s perspective. However, not all physicians share this view; some may encourage Medicare Advantage plans if they believe it is in their patients' best interests.
THEY USUALLY HAVE STRICT PROVIDER NETWORKS
Physicians may have several reasons for disfavoring Medicare Advantage plans. One reason is that these plans often have smaller networks of doctors and hospitals than traditional Medicare, which can limit available providers. This can frustrate doctors who want to provide the best possible care by offering referrals but are constrained by the plan's limitations.
When a Medicare Advantage plan offers a limited network, getting a referral to the best specialist may be harder than expected.
HOW MA/MAPD PLANS ARE DESIGNED
The average physician is not a fan of Medicare Advantage because these plans shift patients’ financial risk to physicians. The Medicare Advantage plan carrier will pay your doctor a set amount of money upfront based on a diagnosis. So the physician makes a profit only if they stay under budget. This encourages doctors to provide cost-effective care that may create pressure to prioritize cost over care.
The complex billing and reimbursement process for Medicare Advantage plans is also a common source of frustration for physicians. In addition to needing to stay under budget when providing care, Medicare Advantage plans often have different payment structures and rates than traditional Medicare, which can make it difficult for doctors to understand how they will be paid for their services.
DEALING WITH PRIOR AUTHORIZATIONS
Another reason doctors may not favor Medicare Advantage plans is that they often require prior authorization for specific treatments or procedures. This means that doctors must get approval from the insurance company before they can perform specific tests, procedures, or treatments.
Obtaining prior authorization can be time-consuming and delay care, which can frustrate both the physician and the patient.
THE GOOD, THE BAD, AND THE UGLY OF MEDICARE ADVANTAGE PLANS
Not all aspects of Medicare Advantage plans are bad. If the benefits match your needs both medically and financially, there can be some drawbacks to Medicare Advantage plans.
SOME POSITIVE THINGS ABOUT MEDICARE ADVANTAGE PLANS ARE
Additional benefits: Medicare Advantage Plans often offer extra benefits that Original Medicare does not cover, such as dental, vision, and hearing care. Some plans may also include fitness and wellness programs, transportation, and other services.
Lower costs: Medicare Advantage Plans may offer lower out-of-pocket costs than Original Medicare and impose annual limits on out-of-pocket expenses, which can help individuals budget for healthcare expenses.
Prescription drug coverage: Many Medicare Advantage Plans also include prescription drug coverage, which can be more affordable than purchasing a separate Part D plan.
Overall, if the benefits are best for you, Medicare Advantage Plans may not be entirely bad. However, you must understand the overall costs associated with your plan, your benefits, and the network restrictions you must follow when receiving care.
DISADVANTAGES OF MEDICARE ADVANTAGE PLANS
Beneficiaries may view Medicare Advantage plans unfavorably for several reasons. Some policyholders may identify disadvantages, whereas others may be satisfied with their Medicare Advantage coverage. Depending on who you ask, the answer varies.
Overall, the most common complaint we hear about Medicare Advantage plans concerns their restrictive provider networks and high out-of-pocket costs. Even without a low or zero-dollar monthly premium, most beneficiaries spend more out-of-pocket on a Medicare Advantage plan than they would through a Medicare Supplement plan.
THE BIGGEST DISADVANTAGES OF MEDICARE ADVANTAGE PLANS
Coverage does not travel with you.
The small network of doctors
High out-of-pocket costs
Plan benefits change annually
The constant need for referrals and approvals
Carefully consider your priorities before enrolling in a Medicare Advantage plan. By doing so, you can make an informed decision about your healthcare and ensure you receive the best possible care.
MA/MAPD (MEDICARE ADVANTAGE PLANS) DO NOT TRAVEL WITH YOU
Another disadvantage of Medicare Advantage plans is that coverage does not travel with you, which can be particularly problematic for seniors who enjoy traveling or who spend part of the year in a different location.
When you enroll in a Medicare Advantage plan, you are typically limited to a specific geographic area. If you travel outside this area, you may be covered only for emergency care.
SMALL PHYSICIANS NETWORKS
Provider networks are another significant disadvantage of Medicare Advantage plans, not only for the doctors but also for you as an enrollee. Medicare Advantage plans often have narrow provider networks, which can limit access to care. In some cases, you may have to travel long distances to see an in-network provider who can meet your needs. This can be especially difficult for individuals with mobility impairments or who rely on public transportation.
Moreover, even when you can find an in-network provider, the quality of care may not be optimal. Medicare Advantage plans are known for incentivizing providers to offer lower-cost care, which can result in lower-quality care or limited treatment options.
HIGH OUT-OF-POCKET COSTS
One of the primary reasons why Medicare Advantage plans are problematic for some is their high costs. While these plans may offer lower premiums than traditional Medicare, they often include additional fees that can quickly add up.
For example, many Medicare Advantage plans can have high deductibles, which means you must pay a certain amount out-of-pocket before their coverage kicks in. In addition, these plans may also have higher copayments and coinsurance for certain services, such as hospital stays or outpatient procedures.
Additionally, you may be subject to paying higher costs if you receive care from a provider who is out of your plan’s network.
ANNUAL PLAN BENEFIT CHANGES & ENROLLING EVERY YEAR
Annual changes to Medicare Advantage plan benefits can create uncertainty, limit access to needed care, and increase out-of-pocket costs for policyholders if you don't review them properly.
When you enroll in a Medicare Advantage plan, you agree to a set of benefits and costs for a specific period of time. However, insurance companies may change the plan each year, such as the cost-sharing structure, covered drugs, orin-network providers. These changes can make it difficult for patients to adjust to new requirements, find alternative treatments, and access needed care.
If a plan increases copays or deductibles, patients may find it harder to afford needed care or stick to their treatment plans. Therefore, patients should review their plan details annually and consider alternatives if the changes do not support their health needs or budget.
MOST HMO PLANS REQUIRE REFERRALS TO SEE A SPECIALIST
Medicare Advantage plans often require you to obtain referrals from your primary care physician before seeing a specialist or receiving certain medical services. This can be frustrating and time-consuming, as you must complete this extra step before you can receive the care you need.
In some cases, you may also need to obtain prior authorization from your insurance company before receiving certain medical services or treatments. This can delay or deny care, which can be especially problematic for patients with severe or urgent health needs.
NO MEDICARE ADVANTAGE PLAN IS FREE
A big misconception about Medicare Advantage plans is that they are free. However, this is far from the truth. When you enroll in a Medicare Advantage plan, you are still responsible for paying the Medicare Part B premium and cost-sharing. So, unfortunately, while you may have a zero-dollar premium plan, there is no such thing as a free Medicare plan.
The main reason why Medicare Advantage carriers can offer low- to zero-dollar monthly premium plans is that Medicare pays the private companies providing the plans to take on your health risk. However, not all Medicare Advantage plans have low premiums.
Medicare Advantage carriers make their plans look attractive to entice beneficiaries to enroll. Then, Medicare pays the carrier a fixed monthly amount to provide coverage to each enrolled beneficiary.
WHAT MOST AGENTS AND MEDICARE ADVANTAGE COMPANIES DO NOT WANT YOU TO KNOW
Medicare Advantage plans often offer extra benefits that you won’t find with Original Medicare or a Medicare Supplement plan. These benefits include dental, vision, and hearing care, prescription drug coverage, gym memberships, and more. However, these additional benefits can cause issues when paying for the services.
Often, beneficiaries are disappointed when they pay more than they budgeted for while using these additional benefits. Although their Medicare Advantage plan provides coverage, they almost always face high out-of-pocket expenses and a low maximum benefit. Plus, once you exceed a certain amount of coverage for most additional benefits, you are responsible for 100% of your costs.
And if that was not bad enough, no one tells you that the additional benefits are divided into four quarters, so your $1,000 Dental Allowance is only $250 per quarter. Very few plans roll over unused amounts to the next quarter.
No one tells you that you must pay $295- $400 per day for the first seven days if you are admitted to the hospital.
Very few rehabilitation facilities are in the network.NetworkCare Advantage members are required to pay out-of-pocket for a facility that is preferred or the closest to them.
However, Medicare Advantage plans may be appropriate in certain situations. If you are on a limited budget and cannot afford the monthly premiums for a Medicare Supplement plan, then a Medicare Advantage plan with sufficient coverage for your health needs is a good deal.
IS ENROLLING IN A MEDICARE ADVANTAGE PLAN A SOUND INVESTMENT?
Medicare Advantage plans are undoubtedly worth the zero-dollar premium. However, you decide whether the coverage fits you and your budget. The value of a Medicare Advantage plan depends on your location, healthcare needs, budget, and preferences.
For some, a Medicare Advantage plan may be a sound financial investment. If you do not regularly attend doctors’ appointments and are in excellent health, you could end up getting more out of the plan than you put in. However, if a health concern eventually arises, the investment could flop. Medicare Advantage plans are good until they are no longer suitable for you.
IF I ENROLL IN A MEDICARE ADVANTAGE PLAN NOW, I CAN ENROLL IN A MEDICARE SUPPLEMENT PLAN LATER, RIGHT?
If you enroll in a Medicare Advantage plan now, you may be able to cancel your Medicare Advantage plan and enroll in a Medicare Supplement (Medigap) plan in the future. To do so, you will have to wait until the Annual Enrollment Period, a Special Enrollment Period, or the Medicare Advantage Open Enrollment Period to make changes.
Most beneficiaries will receive only one Medicare Supplement Open Enrollment Period in their lifetime. This is your only opportunity to enroll in a Medigap plan without answering health questions.
In addition to answering health questions, you may already have a circumstance that could deny you acceptance for a Medicare Supplement Plan. Some of these items are having had stents implanted, having a Defibrillator, being diagnosed or taking COPD Medication, receiving care from a Pain Clinic, Having been diagnosed with Chronic Arthritis or SPinal Stenosis, taking more than 50 Units of Insulin daily, having ESRD, Having had surgery in the last 2-3 years, having more than two overnight stays in a hospital in the past year. There are many more, and each carrier has its own Underwriting Guidelines. Still, here at Braden Medicare, we advise anyone who may want a Medicare Supplement plan later to start with one. We have seen too many bad things happen to good people.
If you miss this one-time opportunity to enroll, you will have to answer health questions should you wish to enroll in a Medicare Supplement plan in the future. This means the carrier may deny your application based on pre-existing conditions. Thus, it’s essential to understand which coverage is best for you and enroll in that coverage the first time.
WILL YOU PAY MORE WITH A MEDICARE ADVANTAGE PLAN OR A MEDIGAP PLAN?
Although many people are initially put off by the higher monthly premiums of Medicare Supplement plans, your out-of-pocket costs each year could be higher on a premium-free Medicare Advantage plan. When you compare your total costs on each plan, you may be surprised at how much you will spend out-of-pocket on copayments, coinsurance, and deductibles.
Typically, your MOOP (Maximum-Out-Of-Pocket) amount is the most you can spend, and most Medicare Advantage plans have MOOP amounts well over 5K per year. With a Medicare Supplement plan, you have a low Annual Part B Deductible of $257 (In 2025) + the cost of your premiums. For most people, this is between $1,500 and $3,000 per year. There is value in having predictable expenses, rather than paying out-of-pocket for services, as you must with Medicare Advantage plans.
Remember, your actual spending will depend on which Medicare Supplement plan you choose and how much care you receive throughout the year. People who visit the doctor only once a year may spend less under a Medicare Advantage plan. However, if a significant health concern arises, you will always pay less with a Medicare Supplement plan. Lastly, remember that every Medicare Advantage plan has a 20% Copayment for all chemotherapy and Radiation Treatments, which can add up quickly. These services are covered under Original Medicare and a Medicare Supplement Plan C, F, G, or N.
IS HAVING A MEDICARE ADVANTAGE PLAN RIGHT FOR YOU?
Understanding whether a Medicare Advantage plan is right for you can depend on several factors. Most importantly, you’ll need to be sure that the plan you choose to enroll in meets your needs, both medically and financially. With all the downsides, why are they pushing Medicare Advantage plans so often? This may be because a Medicare Advantage plan could be the best option for you.
To ensure a Medicare Advantage plan is right for you, you will need to:
Evaluate your healthcare needs: Look at your current healthcare needs and consider any potential changes in the future. Make a list of your prescription drugs, doctor visits, and any other healthcare services you anticipate needing in the coming year.
Compare plan options: Use the Medicare Plan Finder tool to compare the costs and benefits of different Medicare Advantage plans available in your area. Review premiums, deductibles, copayments, and coverage limitations.
Consider your budget: Evaluate your budget and determine how much you can afford to spend on healthcare costs each month. Remember that Medicare Advantage plans often have different fees for different services, so consider all potential costs.
Review plan networks: Ensure that the plan you are considering includes your current doctors, hospitals, and other healthcare providers in its network.
Understand plan benefits: Review the additional benefits that the Medicare Advantage plan offers, such as dental, vision, or hearing services, as well as wellness programs, gym memberships, and other perks.
Speak with a licensed Medicare agent: Consult with a Medicare expert to help you understand your options and make an informed decision.
Ultimately, the decision to enroll in a Medicare Advantage plan depends on your unique healthcare needs and budget. By taking the time to research and compare different plans, you can find the one that is best for you. By following these steps, you will be able to determine if a Medicare Advantage plan is right for you.
We encourage all of our clients to invite their children, Nieces, Nephews, Cousins, or Grandchildren to be part of the decision-making process. After all, they will only want the best for you, and more importantly, they might be taking care of you and acting on your behalf later, so it just makes good sense to involve them early on.
HOW DO MEDICARE ADVANTAGE PLANS MAKE MONEY?
Medicare pays carriers that offer Medicare Advantage plans through a bidding process. Carriers submit bids based on per-enrollee costs for medical services covered by Original Medicare. Suppose the bid exceeds the benchmark amount. In that case, the enrollee pays the difference as a monthly premium; thus, some Advantage plans have a zero-dollar premium, while others have a monthly premium.
But the biggest source of revenue is the Government. Medicare pays Medicare Advantage companies $12K per year for each Medicare beneficiary enrolled in one of their plans, for assuming the risks associated with your care. This is where most of the money comes from for all of their commercials and advertising.
Medicare Advantage plans have always been notorious for running out the clock in the 4th quarter. What do I mean by that? You have to sign up for a new Medicare Advantage plan every year, so if your Medicare Advantage Insurance carrier wants to, they can have you get 2nd, 3rd, and 4th opinions for anything they want to delay paying out for a procedure, knowing that you will have a new plan beginning January 1.
AT THE END OF THE DAY, ARE MY PLANS GOOD OR BAD
Depending on your situation, a Medicare Advantage plan may not be the best option for you. However, different circumstances warrant different plan types. Ultimately, it is crucial to know what to expect from these plans – regarding price and coverage – and become educated on which options are affordable to you and provide the coverage you need.
When determining if a Medicare Advantage plan is bad or good for you, you should thoroughly compare all plans available to you. Then you can choose the plan that best fits your needs and ultimately fits your budget. This is the best way to determine which plan type is best for you. Remember, everyone’s situation is different, so what works best for you may not work best for your spouse or neighbor.
What is the Biggest Downside to Medicare Advantage Plans?
One of the most common complaints we hear about Medicare Advantage plans is limited flexibility and high out-of-pocket costs for services. Although these plans often offer low monthly premiums, they usually come with high deductibles and out-of-pocket expenses. In some cases, you may be better off paying a higher premium to have lower overall costs.
However, cost is not the only downside to Medicare Advantage plans. The lack of network availability in some areas is another significant downside to Medicare Advantage plans. For some, being able to see whichever doctor you prefer is a deal breaker. However, if you enroll in a Medicare Advantage plan, you may not be able to have this option.
In Arizona, the Mayo Clinic, Mayo Hospital, and Barrow Neurological Institute do not accept Medicare Advantage plans but do accept Original Medicare. This is true for most teaching hospitals nationwide.
IF YOU ARE HELL-BENT ON HAVING A MEDICARE ADVANTAGE PLAN, DO YOUR RESEARCH......
The worst Medicare Advantage plan for you is one that doesn't fit your needs and budget. If you enroll in a plan that is not right for you, you could be stuck with subpar coverage, high costs, and doctors that you do not prefer.
If you decide that a Medicare Advantage plan is best for you, it is essential to still research which Medicare Advantage plan is best for you. Not all Medicare Advantage plans offer the same benefits. Thus, understanding your plan is key to a prosperous future with your healthcare plan.
WRAPPING THINGS UP
We always recommend that every Medicare Beneficiary work with a Licensed, Independent Medicare Broker. It costs you nothing but can save you the most time, and Brokers inherently know more than you will learn; they do this for a living. They have access to more plans, and choice equals value. As an example, you might think you are just going to get a Humana Medicare Advantage plan- fine, your choice- but if you call Humana, they can only recommend Humana plans; they cannot recommend any other company's plans. You may think you are saving money, but you are actually costing yourself by not working with an expert.
If you are considering enrolling in a Medicare Advantage plan but are hesitant, we are here to help you make an informed decision. The key to getting the best coverage for you is researching plans in your area and learning about your options.
Whether you believe a Medicare Advantage plan is right for you or wish to explore Medicare Supplement plans, we are available online, by telephone, email, or text. Our only goal is to provide service and do our best to ensure each client finds the right plan for their needs and their family's needs. There is no one-size-fits-all plan for Medicare. However, with over 40 carriers, we know we can offer you more choices from more companies than any other agent or broker. It's another reason why we say that we treat clients like friends, and we always treat friends as members of our family.
