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Oct 18, 20235 min read

What is the Biggest Disadvantage of Medicare Advantage Plan?

Updated: Oct 10

Medicare Advantage Plans have grown in popularity as an alternative to Original Medicare. Offered by private insurers, Medicare Advantage Plans bundle Medicare Part A, Part B, and often Part D prescription coverage. While they provide benefits like capped out-of-pocket spending and extra coverage, Medicare Advantage also comes with potential drawbacks. Understanding the biggest disadvantages can help you decide if a Medicare Advantage Plan is right for your needs.

What is Medicare Advantage Plan?

Medicare Advantage, also known as Medicare Part C, allows private insurance companies to manage your Medicare benefits. These plans must cover all services Original Medicare does but can include additional benefits like dental, vision and wellness programs. Many people choose Medicare Advantage for the extra coverage and lower premiums. Enrollment has grown to over 40% of Medicare beneficiaries being in a Medicare Advantage Plan.

The Biggest Disadvantage of Medicare Advantage: Limited Provider Networks

Perhaps the most significant downside of Medicare Advantage Plans is the restrictive provider network you must use. The network includes only the doctors, specialists, and hospitals that contract with each specific Medicare Advantage Plan.

Seeing providers outside your Medicare Advantage network results in much higher out-of-pocket costs or no coverage at all, except in emergencies. The narrow networks mean:

You may be unable to continue seeing your preferred doctors if they are not in-network with your plan.
Accessing specialists can be challenging since networks limit options.
You will pay very high costs or have no coverage for out-of-network providers, even when traveling.
If your doctor leaves the network, you must find a new provider or pay more.

Original Medicare does not have networks, allowing you to see any healthcare provider in the U.S. that accepts Medicare.

Higher Total Out-of-Pocket Costs

While premiums for Medicare Advantage Plans may be low or even $0, your total out-of-pocket costs throughout the year may be much higher compared to Original Medicare.

Medicare Advantage Plans typically have an annual cap on how much you pay, which provides protection. However, reaching that cap often means you needed extensive medical services, in which case your costs could still be thousands of dollars higher than with Original Medicare plus supplemental coverage like Medigap.

Deductibles, copays, and coinsurance can add up with Medicare Advantage, resulting in higher overall spending.

Pre-Approval Requirements

Many Medicare Advantage Plans require you to get approval before receiving certain medical services, tests, procedures and prescription drugs. This prior authorization process can delay care and prove frustrating. Under Original Medicare, doctors face fewer restrictions when making care decisions.

Enrollment Limitations

Unlike Original Medicare which must cover all eligible seniors, Medicare Advantage Plans can turn applicants down who have certain pre-existing conditions or attempt to enroll outside designated periods. Some plans also exclude beneficiaries under 65 with disabilities.

Choosing the Right Plan

While Medicare Advantage has drawbacks, it can still provide an affordable option for healthy individuals who don't require frequent medical care and are fine with network limitations. But understanding the biggest disadvantages allows you to make an informed choice based on your healthcare priorities. Working with a knowledgeable insurance broker simplifies the process of finding a suitable Medicare Advantage Plan or determining if Original Medicare is a better fit.

FAQs

What is the biggest disadvantage of Medicare Advantage Plan?

Medicare Advantage Plans often have a limited network of doctors and hospitals, which means you may have to change your healthcare providers if they are not in the plan's network.

Can I have a Medicare Supplement Plan with a Medicare Advantage Plan?

No, you cannot have both a Medicare Supplement Plan and a Medicare Advantage Plan at the same time. It is illegal for insurance companies to sell you a Medicare Supplement Plan if they know you have a Medicare Advantage Plan.

What is the difference between Medicare Advantage and Medicare Supplement Plans?

Medicare Advantage Plans are an alternative to traditional Medicare. They are private health plans that provide all of your Medicare Part A and Part B benefits. On the other hand, Medicare Supplement Plans work alongside your Original Medicare and help cover out-of-pocket costs, such as deductibles and coinsurance.

Can I switch from a Medicare Advantage Plan to a Medicare Supplement Plan?

Yes, you can switch from a Medicare Advantage Plan to a Medicare Supplement Plan during certain enrollment periods. However, it is important to note that you may have to undergo medical underwriting, and there is no guarantee that you will be approved for a Medicare Supplement Plan.

Do Medicare Advantage Plans cover prescription drugs?

Yes, most Medicare Advantage Plans include prescription drug coverage (Part D). However, the specific drugs covered and the cost-sharing requirements may vary between plans.

Can I enroll in a Medicare Advantage Plan if I have a pre-existing condition?

Yes, Medicare Advantage Plans are not allowed to deny you coverage based on pre-existing conditions. However, if you have end-stage renal disease (ESRD), you generally cannot enroll in a Medicare Advantage Plan.

Do Medicare Advantage Plans offer dental and vision coverage?

Some Medicare Advantage Plans may offer dental and vision coverage as part of their benefits package. However, these additional benefits can vary greatly between plans, so it's important to review the plan's details before enrolling.

Are there any restrictions on choosing a Medicare Advantage Plan?

Yes, there are some restrictions on choosing a Medicare Advantage Plan. You must live in the plan's service area, be enrolled in both Medicare Part A and Part B, and not have end-stage renal disease (ESRD), with some exceptions.

How do I find the best Medicare Advantage Plan for me?

To find the best Medicare Advantage Plan for you, it's important to compare different plans based on factors such as health insurance coverage, network, premiums, and additional benefits. You can use the Medicare Plan Finder tool on the official Medicare website or seek assistance from a licensed insurance agent. Also check the pros and cons of Medicare online. so long as you're eligible for Medicare and enroll in Medicare, you're good to go.

Can I switch from a Medicare Advantage Plan to Original Medicare?

Yes, you can switch from a Medicare Advantage Plan back to Original Medicare during certain enrollment periods. However, it's important to note that you may not be able to enroll in a Medicare Supplement or Medigap Plan without medical underwriting, and you may not have the same level of coverage as before.