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Nov 17, 20235 min read

What Is The Biggest Disadvantage Of Medicare Advantage Plan?

Updated: Oct 10

Medicare Advantage is a popular alternative to Original Medicare, with nearly 30 million enrollees as of 2022. Medicare Advantage Plans have advantages like capped out-of-pocket costs and included drug coverage. But there are also potential disadvantages to evaluate before enrolling. Understanding the pros and cons helps ensure Medicare Advantage is the right fit for your situation.

What Are the Advantages of Medicare Advantage Plans?

Medicare Advantage appeals to many beneficiaries for several reasons:

Lower premiums - Many Medicare Advantage Plans charge $0 monthly premiums beyond the standard Medicare Part B premium. This provides savings compared to Medigap Plans.

Out-of-pocket max - Original Medicare does not limit your annual costs, while Medicare Advantage Plans cap your copays and coinsurance.

Prescription drug coverage - Most Medicare Advantage Plans include Part D prescription medications with no extra premium.

Extra benefits - Many plans offer dental, vision, hearing and other benefits not covered by Original Medicare.

Coordinated care - Medicare Advantage Plans have provider networks and often assign a primary care doctor to coordinate your care.

What Are Potential Disadvantages of Medicare Advantage?

However, there are also some drawbacks to consider:

Network restrictions - Medicare Advantage providers are limited to those contracted with the insurer. With Original Medicare you can see any provider nationwide who accepts Medicare.

Pre-approvals needed - For some services and specialists you may need prior authorization from your Medicare Advantage Plan first.

Copays and coinsurance - While there's a spending cap, services often have copayments and coinsurance costs that add up.

Prescription restrictions - Medicare Advantage drug formularies may not cover specific medications you need.

Coverage limitations outside the network - Medicare Advantage Plans only cover emergencies and urgently needed care outside the plan's service area.

How Do Costs Compare to Original Medicare?

Medicare Advantage Plans have lower premiums but deductibles and copays for services. With Original Medicare, you pay 20% coinsurance with no annual limit.

Adding a Medigap policy to Original Medicare gives you predictable copays and deductibles for a monthly premium cost.

Your overall costs depend on your healthcare utilization. Frequent services and procedures incur more cost-sharing with Medicare Advantage.

What Should You Consider About Provider Choice?

Medicare Advantage networks fluctuate yearly as insurers contract with different providers. Your doctor could leave the network.

Some specialists like cardiologists may not participate in certain Medicare Advantage networks. This requires referrals and pre-approvals.

With Original Medicare, any healthcare provider in the country who accepts Medicare health insurance also accepts your coverage.

But keep in mind, just because a provider takes Medicare doesn't guarantee they will take new Medicare patients.

What If You're Not Satisfied with Your Medicare Advantage Plan?

During Medicare Advantage Open Enrollment from January 1 to March 31, you can switch Medicare Advantage Plans or disenroll and return to Original Medicare.

If your medications are suddenly no longer covered by your plan's formulary, this may qualify you for a Special Enrollment Period to change plans.

Each fall during Medicare coverage Open Enrollment, you can add or change your Part D Plan prescription drug coverage.

Could Medicare Advantage Still Be a Good Option?

Despite the disadvantages, Medicare Advantage can provide good value for many beneficiaries. Consider if the pros outweigh the cons for your situation:

Do you take any expensive prescription drugs where having Part D coverage included saves significantly on premiums?

Does your Medicare Advantage Plan offer valuable extra benefits like dental or vision you would otherwise have to purchase separately?

Does your plan include your preferred doctors, specialists and hospitals in-network?

If your providers leave the network, are there adequate alternative options you would be comfortable switching to?

Thoroughly evaluating your needs and priorities allows you to determine if the benefits of Medicare Advantage outweigh the potential limitations.

FAQs

What are the biggest disadvantages of Medicare Advantage Plans?

Some of the biggest disadvantages of Medicare Advantage Plans include limitations on doctors and hospitals within the plan's network, potential for higher out-of-pocket costs for certain services, and the requirement to get referrals to see specialists in some plans.

How do Medicare Advantage Plans compare to Medicare Supplement Plans?

Medicare Advantage Plans, also known as Medicare Part C, are an alternative way to receive Medicare benefits, whereas Medicare Supplement Plans, or Medigap Plans, work alongside Original Medicare to help cover some of the out-of-pocket costs that Medicare doesn't pay for.

What are the cons of Medicare Advantage Plans compared to traditional Medicare?

Some cons of Medicare Advantage Plans compared to traditional Medicare include limitations on choosing healthcare providers, potential for higher out-of-pocket costs, and the need to get prior authorization for certain services.

Can I switch back to Original Medicare if I enroll in a Medicare Advantage Plan?

Yes, you can switch back to Original Medicare during certain times of the year or during specific enrollment periods. It's important to carefully consider your options and the implications of switching plans before making a decision.

What are the pros and cons of enrolling in a Medicare Advantage Plan?

The pros of enrolling in a Medicare Advantage Plan may include additional benefits such as vision or dental coverage, while the cons may include restricted provider networks and potential for higher out-of-pocket costs for certain services.

Are there limitations on the network of doctors and hospitals with Medicare Advantage Plans?

Yes, Medicare Advantage Plans often have provider networks, and receiving care from doctors and hospitals outside of the network may result in higher costs or not be covered at all, except in cases of emergency or urgent care.

What are the requirements for enrolling in a Medicare Advantage Plan?

To enroll in a Medicare Advantage Plan, you must be eligible for Medicare Plan Part A and Part B, reside in the plan's service area, and not have end-stage renal disease (ESRD) in most cases. Specific eligibility requirements may vary by plan.

Can Medicare Advantage Plans be considerped bad for certain individuals?

Medicare Advantage Plans may not be the best fit for everyone, as their limitations on networks and potential for higher out-of-pocket costs may not align with the needs of some Medicare beneficiaries. It's important to carefully review and compare plan options before enrolling.

Are there different types of Medicare Advantage Plans available?

Yes, there are different types of Medicare Advantage Plans, including Health Maintenance Organization (HMO) plans, Preferred Provider Organization (PPO) plans, Special Needs Plans (SNPs), and more, each with its own structure and coverage options.

What factors should I consider when choosing a Medicare Advantage Plan?

When choosing a Medicare Advantage Plan, it's important to consider the plan's network of doctors and hospitals, the cost-sharing requirements, coverage for specific healthcare needs, prescription drug coverage, and any additional benefits offered beyond traditional Medicare.