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What are Medicare Advantage plans?
Medicare Advantage plans, or Part C, are a popular alternative to traditional Medicare.
Private insurance companies offer these plans and provide an all-in-one alternative to Medicare Parts A and B, often with added benefits such as dental and vision coverage. However, Medicare Advantage plans may not be the best choice for everyone. This article will explore why Medicare Advantage plans could be bad for some beneficiaries.
On average, the Medicare beneficiary has 43 options to choose from.
But with the proliferation of Medicare Advantage and wide ranges of choice, how do you identify the worst Medicare Advantage plans?
Common Traits of the Worst Medicare Advantage Plans
Strict Prior Authorization Rules
One common downside with Medicare Advantage plans is that they may require you to get prior authorization. Prior authorization is when insurance companies require doctors to get approval before providing certain services or treatments to patients.
While prior authorizations allow Medicare Advantage plans to keep overall day-to-day healthcare services costs low, they can also detriment some beneficiaries in certain instances.
In 2022, over 46 million prior authorization requests were submitted to carriers (a 31% increase over the previous year). These can create delays in receiving necessary medical care and be frustrating for patients and healthcare providers alike..
Below is a study by the Kaiser Family Foundation that reviews major Medicare Advantage carriers and the average number of authorization requests per carrier.
While a high number of prior authorizations is not necessarily bad, it needs to be reviewed in conjunction with the number of denials (for example, if a carrier has a high number of prior authorization requests but the vast majority are approved, then it doesn’t necessarily negatively impact you as a consumer).
Carriers can deny coverage if they assess that a certain service is not required – limiting the flexibility of doctors in treating their patients. The Kaiser Family Foundation found that:
- Over 3.4 million (7.4%) prior authorization requests were fully or partially denied by Medicare Advantage insurers.
- One in ten (9.9%) percent of prior authorization denials were appealed.
- The vast majority (83.2%) of appeals resulted in fully or partially overturning the initial prior authorization denial.
How to avoid issues with prior authorization
Unfortunately, prior authorizations are a part of life with Medicare Advantage. Without this, Medicare Advantage plans would be unable to manage health claim costs appropriately, driving up the cost of care for everyone, including healthy people.
The best way to prepare is to be aware. Before enrolling, speak to a licensed insurance agent or service specializing in Medicare (like CoverRight) to understand your plan’s prior authorization rules.
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High Out of Pocket Expenses
Another issue with Medicare Advantage plans is the potential for high out-of-pocket expenses and maximum out-of-pocket limits. While these plans often have lower premiums than having a Medicare Supplement (Medigap) plan, they can come with higher copays and coinsurances and some may have Maximum Out of Pocket (‘MOOP’) limits that can reach up to $8,850 for in-network services and $13,300 for in- and out-of-network services (if the plan covers out of network providers). This can leave beneficiaries with unexpected and potentially unaffordable medical bills.
How to avoid issues with out of pocket expenses
You should always check that you are comfortable with the out of pocket obligations in your plan before making a final decision. In particular, you should review the costs associated with the care that you intend to receive from the plan (for example: are you healthy and except just to see your doctors for annual check ups or do you have a chronic condition that requires more specialist visits and lab tests?). Speak to your licensed insurance agent about these items before you enroll.
Learn more: Disadvantages of Medicare Advantage
Plans with Questionable Provider Networks
People with traditional Medicare have access to any doctor or hospital that accepts Medicare, anywhere in the United States. That’s the vast majority of doctors and virtually all hospitals.
In contrast, Medicare Advantage enrollees can access providers only through more limited provider networks. All Medicare Advantage plans must have such networks for doctors, hospitals, and other providers.
The worst available Medicare Advantage plans have questionable or narrow doctor networks. This could be especially problematic for beneficiaries who live in rural areas or require specialized care that may not be available within the network.
Provider participation in insurance carrier networks can vary greatly. A 2017 analysis found that on average, Medicare Advantage networks included fewer than half (46%) of all Medicare physicians in a given county. In addition, the Centers for Medicare and Medicaid Services (CMS), which administers Medicare Advantage plans, has also noted that some plans have not complied with “network adequacy” standards in recent years.
How to avoid issues with prior authorization
While a narrow network is not necessarily negative (it does allow some plans to manage your care better) – it’s important always to check your doctors and any potential facilities you may use before enrolling. Some carriers are known for having a broader network than others, so you should always review these, particularly if you intend to travel across states a lot.
Low CMS Star Ratings
Finally, Medicare Advantage plans often have lower quality ratings than traditional Medicare. The Centers for Medicare and Medicaid Services (CMS) rates Medicare Advantage plans on a five-star scale based on customer service, member experience, and healthcare quality.
In recent years, a number of Medicare Advantage plans have received three stars or less, and star ratings have declined overall. This suggests that the Medicare Advantage plan may not be providing an adequate quality care compared to other plans.
According to CMS, the average star rating among plans, weighted by enrollment, was 4.04 stars in 2024, down from 4.14 stars in 2023.
For the six largest Medicare Advantage insurance carriers, the ratings were as follows:
| Carrier | Highest rating | Lowest rating | Median rating | Total number of MA contracts |
|---|---|---|---|---|
| Aetna | 4.5 | 2.5 | 4.0 | 45 |
| Centene | 4.0 | 2.0 | 3.0 | 106 |
| Cigna | 4.5 | 3.0 | 3.5 | 17 |
| Elevance (Anthem BCBS) | 5.0 | 2.5 | 3.5 | 46 |
| Humana | 5.0 | 3.0 | 4.0 | 48 |
| United Healthcare | 5.0 | 3.0 | 4.0 | 75 |
How to avoid issues with low-rated plans
Most plans provide a star rating unless they are ‘too new’ to be rated by CMS if there is insufficient historical data. This may be your deciding factor when deciding between two similar plans. For plans with no star rating yet, review if the insurance carrier has other plans and what the average rating might be so that those can get a sense of how good the carrier is overall.
What else to look for
While Medicare Advantage plans generally offer great solutions for cost-conscious consumers with low copays for day-to-day healthcare services such as primary care doctor visits (many plans have $0 copay for seeing your doctor), some expensive items and services have the same cost share as Original Medicare:
These include:
- Durable Medical Equipment: Medical equipment is one of the most expensive items you can buy. Nearly every Medicare Advantage plan will have a cost share of 20% for most durable medical equipment, which ranges from a CPAP or oxygen machine to wheelchairs and mobility devices.
- Part B Drugs: Another high cost can be drugs administered in the doctor’s office. These medications are typically injections or infusion drugs such as chemotherapy for cancer. Like DME, these costs will be 20% on nearly every Medicare Advantage program. Medicines filled at a pharmacy will be covered under Medicare Part D and your plan’s prescription drug coverage.
- Dialysis for End-Stage Renal Disease: ESRD requires dialysis treatment to keep the kidneys functioning. Those beneficiaries needing this treatment can also expect a 20% coinsurance until they reach their plan maximum out of pocket. This makes treatment costs very high and difficult to pay for.
What to do if I want more comprehensive coverage
Suppose you are concerned about being stuck with a Medicare Advantage plan that might not suit your needs. In that case, you can always consider a Medicare Supplement (‘or Medigap’) plan that provides comprehensive or ‘Cadillac’ coverage.
Medicare Supplement plans eliminate almost all the concerns and costs above. However, not everyone can enroll in or afford a Medigap Plan.
If you need to stay with a Medicare Advantage plan, pick your plan carefully and work with a licensed insurance agent specializing in Medicare.
Medicare Advantage Plans may not be the best choice for everyone
While Medicare Advantage plans can be a good choice for some beneficiaries, they may not be the best choice for everyone. Prior authorization, high out-of-pocket expenses and maximum out-of-pocket limits, narrow doctor networks, and low quality ratings are all potential drawbacks of these plans. Before enrolling in a Medicare Advantage plan, beneficiaries should carefully consider their healthcare needs and options and compare plans based on cost, coverage, and quality.
Frequently Asked Questions
What is the biggest disadvantage of Medicare Advantage?
The biggest disadvantage of Medicare Advantage plans is the potential limitation of providers you can see, limiting your selection of physicians and medical facilities if you have certain conditions requiring specialist care.
Why do people dislike Medicare Advantage plans?
People on Medicare Advantage plans may dislike these plans as they may be more restrictive on care due to the network restrictions mentioned above and the potential need for prior authorizations before receiving care.
In addition, there is a common misconception that a Medicare Advantage plan is free and that there are no copays when you use services. While many plans have $0 premiums, most individuals have to pay out-of-pocket copays and coinsurances when using health services.
Can I drop my Medicare Advantage plan and go back to my Original Medicare?
You can switch from your Medicare Advantage plan to traditional Medicare during the Medicare Advantage Open Enrollment period or Annual Enrollment Period. Besides these two enrollment periods, you would need a qualifying situation and, therefore, a ‘Special Enrollment Period’ to drop the MA plan and return to Original Medicare.
What are the best Medicare Advantage plans?
There isn’t a best Medicare Advantage plan. This is because everyone has different needs. The plan that’s the best for your friend may not fit your needs at all.
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