Happy senior couple riding a scooter as they discuss the reasons why Medicare Advantage could be bad.

Why Is Medicare Advantage Bad?

You’ve seen the advertisements and heard all the perks of Medicare Advantage, plans but why are some people saying Medicare Advantage is bad? Are the benefits not as good as what you’ve seen on TV or heard on the radio? Is someone lying? How do you know who to believe?

Let’s talk about what Medicare Advantage is and how it differs from a Medicare supplement. We’ll fill you in on why some people claim Medicare Advantage is “bad” and others sing high praises. Let’s jump in!

What is Medicare Advantage?

Medicare Advantage, also called Medicare Part C, is an all-in-one solution for your health insurance needs. Medicare Advantage plans are sold by private insurance companies who were approved by the Medicare program to offer coverage options. Every Medicare Advantage plan must offer at least the same coverage as Original Medicare – Parts A and B. The reason for this is because if you enroll in a Medicare Advantage plan, it will take the place of Parts A and B. Instead of getting those benefits from the federal government, Medicare Advantage members get all their benefits directly from the insurance carrier.

The government pays insurance carriers to offer these plans, which is one reason that Medicare Advantage plans usually have a low monthly premium – sometimes as low as $0. In addition to a low monthly premium, Medicare Advantage members often have access to more benefits than are provided by Original Medicare. Most of these plans have benefits for dental, vision, and hearing services, as well as prescription drug coverage. Some even offer gym memberships, meal delivery services, and transportation to and from doctor’s visits. Premiums and benefits will vary based on the specific plan.

It’s easy to see why these plans are popular.

What is a Medicare supplement?

Medicare supplements work quite differently than Medicare Advantage plans. These plans are also sold by private insurance companies, but the plans are standardized, so they are the same no matter which insurance carrier you purchase one from. The only thing the carrier has control over is the monthly premium.

A Medicare supplement does not replace your coverage with Medicare Parts A and B. Instead, it works to fill in the gaps left over by Original Medicare. Medicare supplements do not offer any extra benefits outside of what is covered by Medicare Parts A and B, but there are several plans that offer comprehensive coverage, leaving the beneficiary with virtually no out-of-pocket expenses.

What’s the difference between Medicare Advantage and a Medicare supplement?

There are a few differences (others than those we’ve just discussed) that you need to understand prior to enrolling in either a Medicare Advantage plan or a Medicare supplement.

Provider Networks

Most physicians in the United States accept Medicare. As long as your provider accepts Medicare, they will also accept your Medicare supplement plan. That is not the case with Medicare Advantage plans. MA plans utilize provider networks. Some have large networks, while others have very small networks. In most cases, you’ll only have coverage if you see a provider within the plan’s network. Receiving care from other providers will result in a higher out-of-pocket expense – possibly the entire bill.

Senior couple enjoying a dance in the park as they discuss why its possible that Medicare Advantage is bad for them.
Medicare Advantage, also called Medicare Part C, is an all-in-one solution for your health insurance needs.

Location Availability

Medicare Advantage plans are not available everywhere, unlike Medicare supplements. Your location will determine which plans are available for you to enroll in.

Copays and Coinsurance

The most popular Medicare supplement plans do not have copays for doctor’s visits, nor do they have many (if any) coinsurance expenses. The opposite is true for MA plans. You’ll typically have a copay for each visit, and services aren’t usually covered at 100%. Again, this will depend on the specific plan.

Medicare Underwriting

All Medicare beneficiaries are granted guaranteed issue rights for a Medicare supplement when they first become eligible to enroll in one. After that initial enrollment window, you’ll need to pass medical underwriting to be accepted into a plan. (Some states have their own rules that allow for more freedom during certain times of the year.) Medicare Advantage plans never require medical underwriting. You can enroll in an MA plan regardless of your current or past health condition.

Why are Medicare Advantage plans bad?

Now you’ve got some knowledge about how Medicare Advantage plans and Medicare supplements work. Neither sound particularly “bad,” just different. So why do some say Medicare Advantage plans are bad? Let’s discuss the most common reasons you’ll hear someone say this.

They went outside their network.

Medicare Advantage plans can offer excellent coverage as long as you stay within the plan’s network! If someone is traveling or sees a physician who is not in their network, they will end up with a much larger bill. That doesn’t mean the plan was bad; it just means they went outside of their network for service.

They didn’t check the drug formulary.

If you enroll in an MA plan with prescription drug coverage, you need to make sure your prescriptions are covered in the drug formulary. This is part of every prescription drug coverage – whether as part of an MA plan or as a stand-alone Part D plan. If your prescription is not listed on the formulary, you’ll pay for the entire cost out-of-pocket. 

They didn’t factor in copays and coinsurance.

Since some Medicare Advantage plans have $0 premiums, many beneficiaries accidentally think the plan is free. That’s definitely not the case! You will almost always have a copay or coinsurance cost associated with every doctor’s visit and every type of service. While the premiums are very low, if you see a doctor frequently, the copays and coinsurance can quickly add up to much more than you would have paid with a comprehensive Medicare supplement plan.

How do I decide between Medicare Advantage and a Medicare supplement?

Deciding between a Medicare Advantage plan and a Medicare supplement plan does take some thought and consideration. You’ll need to think about your current health condition, the providers you see, and your budget. The good news is, we can help you with all of that! Our agents will get to know you and your healthcare needs. Then, we’ll make recommendations based on which plans you are eligible for. Give us a call today and schedule a free consultation.

 

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