Navigating Medicare options can be challenging, especially when faced with numerous choices like Medicare Advantage plans.
While these plans are popular for their all-in-one coverage and low premiums, they aren’t always the best fit for everyone—particularly those needing frequent care or specialized services. In this guide, we’ll explore the main drawbacks of Medicare Advantage plans and why they may not suit every Medicare beneficiary.
Key Takeaways:
- Medicare Advantage plans often have higher out-of-pocket costs than Medigap despite low premiums.
- Limited provider networks may restrict access to preferred healthcare providers and specialists.
- Prior authorization requirements may delay or deny needed treatments, affecting timely care and out-of-pocket costs compared to Medigap, despite the lure of low premiums.
Drawbacks to Medicare Advantage Plans
Medicare Advantage plans are marketed as an all-in-one alternative to Original Medicare, offering added benefits like dental, vision, and hearing coverage. However, potential enrollees should be aware of several key drawbacks.
Low Premiums, High Trade-Offs
Medicare Advantage plans may have appealingly low or even $0 monthly premiums, but this doesn’t mean low overall costs.
These plans often limit your choice of doctors and hospitals and come with various hidden out-of-pocket expenses that can add up quickly. Below, we explore these main drawbacks in detail.
High Out-of-Pocket Costs
Medicare Advantage plans may initially seem cost-effective, but beneficiaries often face higher out-of-pocket costs than those on Medigap plans. Copays, coinsurance, and deductibles can become substantial, especially for those who require frequent medical care.
- Maximum Out-of-Pocket (MOOP): Every Medicare Advantage plan has a MOOP limit. In 2024, in-network MOOP limits can reach up to $8,850, which could be burdensome for beneficiaries facing serious health issues.
- Routine Care Costs: Regular copays for specialists, emergency room visits, and ongoing treatments can quickly exceed expectations for those who thought they were opting for an affordable plan.
Learn more: The Worst Medicare Advantage Plans
Prior Authorization Requirements
Another major drawback of Medicare Advantage plans is the need for prior authorizations. Unlike Original Medicare, many services under Medicare Advantage plans require approval from the insurer before they are covered.
This administrative hurdle often results in delays or even denials for important treatments.
A 2022 report showed that 7.4% of prior authorization requests were fully or partially denied, with only about 10% of these denials appealed. Even when appeals succeeded, delays could significantly disrupt patient care, especially for those with complex or urgent needs.
Limited Provider Networks
Medicare Advantage plans often come with restricted provider networks, which means beneficiaries must choose from a predefined list of doctors and hospitals.
This can make it difficult for individuals who wish to stay with a trusted provider or access care while traveling.
Specialized and Rural Care Issues: Access to specialized care or coverage for rural areas is particularly challenging with limited networks. Patients may have fewer choices, increasing the risk of traveling long distances or receiving suboptimal care.
Coverage Limitations Compared to Original Medicare
Medicare Advantage plans can have more restrictive coverage policies than Original Medicare. This may include limitations on certain specialty services and additional costs for accessing out-of-network providers, even for crucial treatments.
Specialty Care Limitations: Beneficiaries needing specialized treatments, such as cancer therapy or cardiovascular services, may find that Medicare Advantage imposes more barriers than Original Medicare, especially when out-of-network providers are involved.
Take the guesswork out of choosing your Medicare plan
With CoverRight, you get personalized advice to select the best plan for your health needs and budget—whether it’s a Medicare Advantage plan or an alternative with fewer restrictions. Start with CoverRight today.
Before Choosing Medicare Advantage
If you’re considering a Medicare Advantage plan, consider the potential trade-offs—including your current health, financial situation, and preferred healthcare providers.
Here’s a quick summary of key considerations:
- Costs: While Medicare Advantage plans have low premiums, high out-of-pocket costs could make them less budget-friendly for those requiring frequent care.
- Provider Access: Confirm that your preferred doctors and hospitals are within the plan’s network.
Learn more: How to Compare Medicare Advantage Plans
Who Should Avoid Medicare Advantage Plans
Medicare Advantage plans aren’t ideal for everyone. If you fit one of these profiles, you may be better served by other Medicare options:
- Frequent Travelers: Medicare Advantage plans are usually limited geographically, making them inconvenient for those who travel frequently.
- Those Needing Regular Specialist Visits: A Medigap plan paired with Original Medicare may provide greater flexibility and lower out-of-pocket expenses if you need ongoing specialist care.
- Patients with Complex Healthcare Needs: People requiring specialized care or a broad network of providers may benefit more from Original Medicare combined with a Medigap plan.
Consider pairing Original Medicare with a Medigap plan to enjoy comprehensive coverage with minimal restrictions.
Learn more: Why Some Doctors Dislike Medicare Advantage
How to Make the Right Choice for Your Health Needs
Medicare Advantage plans can be a good fit for some beneficiaries, but they aren’t for everyone.
Understanding your health needs and the pros and cons of each plan is key to making an informed choice.
Work with a Licensed Medicare Agent
Consulting with a Medicare advisor ensures you get guidance tailored to your situation. CoverRight’s licensed experts can help you navigate the complexities and choose one that matches your healthcare needs and budget.
Sources
- Kaiser Family Foundation (KFF)
- Half of All Eligible Medicare Beneficiaries Are Now Enrolled in Private Medicare Advantage Plans. Published May 2023. Available at: kff.org.
- Fortune
- Prior authorization rules are stressful for Medicare Advantage customers—but changes are coming. Published April 2023. Available at: Fortune.com.
