If choice is a major concern for you regarding health care, you don’t ever want to enroll in a Medicare Advantage Plan (MA). If you can’t afford a premium for traditional Medicare supplemental policy, a Medicare Advantage Plan might be necessary for you. When you enroll in an MA Plan, your choices will be dictated by an insurance company.

A Medicare Advantage Plan is intended to be an all-in-one alternative to Original Medicare. Private insurance companies offer these plans that contract with Medicare to provide Part A and Part B benefits, and sometimes Part D (prescriptions). Most plans cover benefits that Original Medicare doesn’t offer, such as vision, hearing, and dental. You have to sign up for Medicare Part A and Part B before you can enroll in Medicare Advantage Plan.

Disadvantages of Medicare Advantage Plans

In general, Medicare Advantage Plans do not offer the same level of choice as a Medicare plus Medigap combination. Most plans require you to go to their network of doctors and health providers. Since Medicare Advantage Plans can’t pick their customers (they must accept any Medicare-eligible participant), they discourage people who are sick by the way they structure their copays and deductibles.

Author Wendell Potter explains how many Medicare Advantage enrollees don’t find out about the limitations of their Medicare Advantage plans until they get sick:

“Although Mom saw her MA premiums increase significantly over the years, she didn’t have any real motivation to disenroll until after she broke her hip and required skilled care in a nursing facility. After a few days, the nursing home administrator told her that if she stayed there, she would have to pay for everything out of her own pocket. Why? Because a utilization review nurse at her MA plan, who had never seen or examined her, decided that the care she was receiving was no longer ‘medically necessary.’ Because there are no commonly used criteria as to what constitutes medical necessity, insurers have wide discretion in determining what they will pay for and when they will stop paying for services like skilled nursing care by decreeing it ‘custodial.”

One of the most critical health care considerations for an individual is choosing one’s doctor(s) and other health care providers. One of the hallmarks of traditional Medicare is the free choice of provider – an individual can see any provider across the country that accepts Medicare. By design, however, MA plans generally contract with a limited network of providers to care for their enrollees (such as HMOs), and some charge more to see providers that don’t contract with the plan (such as PPOs). Access to specialists can be limited, and providers can be terminated from the network mid-year, with little to no recourse for their patients.

Consider Premiums—and Your Other Costs

To see how a Medicare Advantage Plan cherry-picks its patients, carefully review the copays in the summary of benefits for every plan you are considering. To give you an example of the types of copays you may find, here are some details of in-network services from a popular Humana Medicare Advantage Plan in Florida:

• Ambulance—$300
• Hospital stay—$175 per day for the first 10 days
• Diabetes supplies—up to 20% copay
• Diagnostic radiology—up to $125 copay
• Lab Services—up to $100 copay
• Outpatient x-rays—up to $100 copay
• Therapeutic radiology—$35 or up to 20% copay depending on the service
• Renal dialysis—20% of the cost.

As this non-exhaustive list of copays demonstrates, out-of-pocket costs will quickly build up over the year if you get sick. The Medicare Advantage Plan may offer a $0 premium, but the out-of-pocket surprises may not be worth those initial savings if you get sick. “The best candidate for Medicare Advantage is someone who’s healthy,” says Mary Ashkar, senior attorney for the Center for Medicare Advocacy. “We see trouble when someone gets sick.”

Switching Back to Original Medicare

While you can save money with a Medicare Advantage Plan when you are healthy, if you get sick in the middle of the year, you are stuck with whatever costs you incur until you can switch plans during the next open season for Medicare. At that time, you can switch to an Original Medicare plan with Medigap. If you do, keep in mind that Medigap can may charge you a higher rate than if you had enrolled in a Medigap policy when you first qualified for Medicare.

More Disadvantages

Most Medigap policies are issue-age rated policies or attained-age rated policies. This means that you will pay more per month when you sign up later in life than if you had started with the Medigap policy at age 65. You may be able to find a policy that has no age rating, but those are rare.

More Disadvantages of Medicare Advantage Plans

• Care can actually end up costing more, to the patient and the federal budget than under original Medicare, particularly if one suffers from a very serious medical problem.
• Some private plans are not financially stable and may suddenly cease coverage. This happened in Florida in 2014 when a popular MA plan called Physicians United Plan was declared insolvent, and doctors canceled appointments.
• One may have difficulty getting emergency or urgent care due to rationing.
• The plans only cover certain doctors, and often drop providers without cause, breaking the continuity of care.
• Members have to follow plan rules to get covered care.
• There are always restrictions when choosing doctors, hospitals, and other providers, which is another form of rationing that keeps profits up for the insurance company but limits patient choice.
• It can be difficult to get care away from home.
• The extra benefits offered can turn out to be less than promised.

Plans that include coverage for Part D prescription drug costs may ration certain high-cost medications.

While MA plans tout their ability to “coordinate” or “manage” care, in practice, this often results in care just being denied. According to a Health and Humans Services (HHS) Office of Inspector General (OIG) report in 2018, government audits “highlight widespread and persistent [MA plan] performance problems related to denials of care and payment.” As discussed in a previous CMA Alert addressing the report’s findings, OIG stated that MA plans: “may have an incentive to deny preauthorization of services for beneficiaries, and payments to providers, in order to increase profits. High overturn rates when beneficiaries and providers appeal denials, and CMS audit findings about inappropriate denials, raise concerns that some beneficiaries and providers may not be getting services and payment that [MA plans] are required to provide.”

My Elder is committed to helping our clients get the best medical care available. We can help you with elder-care services, including Assisted Living and Nursing Home Placement, Hospital and Nursing Home Crisis Intervention, Elder Care Monitoring, Elder Home Care Advisory, Long Term Care Planning, and more. Please contact us at 212-945-7550 if you need an elder advocate.

Photos by Wesley Tingey and Ami Hirschi