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3 Smart Medicare Advantage Questions to Ask Right Now

By Dan Caplinger – Sep 11, 2016 at 6:37AM

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Get the ins and outs of Medicare Advantage by looking into these three areas.

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Medicare Advantage plans offer an alternative to traditional Medicare, and they've gained in popularity among seniors lately because of some of the up-front cost advantages they can offer. Yet before you choose Medicare Advantage over original Medicare because of lower monthly premiums, you need to get the information you'll need to do a true apples-to-apples comparison of the two programs. Below, we'll look at three questions you need to look at closely in evaluating Medicare Advantage.

1. Will your Medicare Advantage plan provider's network meet your needs?

The primary way that the private insurance companies that offer Medicare Advantage plans are able to charge lower premiums than what you'll pay for regular Medicare Part B medical coverage is by using a managed care framework. Under regular Medicare, you can visit any doctor, hospital, or other healthcare provider that accepts Medicare patients. By contrast, Medicare Advantage members are subject to whatever provisions their particular plan imposes. In many cases, you'll have to use healthcare providers and facilities within a certain network. Out-of-network coverage is minimal and is largely designed to provide emergency coverage only.

In major metropolitan areas in which most networks have long lists of specialists, dealing with a network isn't that big a hassle. But in rural areas and even smaller cities and towns, having to deal with networks can be a problem that affects not only your wallet but also your health. In considering a plan, it's important for you to assess your particular healthcare needs and your ability to get the care you need within a particular network. Otherwise, Medicare Advantage might not work for you despite any cost advantages.

2. Will your Medicare Advantage plan actually cover and pay for the medical expenses you incur?

Medicare Advantage plans must cover all of the services that original Medicare covers, with the exception of hospice care, for which participants receive Medicare coverage even if they choose a Medicare Advantage plan. However, if a service isn't medically necessary, a Medicare Advantage plan can choose to deny coverage.

One problem that some people have with Medicare Advantage plans is that it can be a lengthy process to deal with denial of coverage issues. The health insurance company providing the coverage makes the initial determination, and it also makes the first-level reconsideration review. Only in the second level of appeals do you get consideration from an independent review entity, and from there, proceedings escalate to an administrative law judge, the Medicare appeals council, and finally a federal district court. This process can be lengthy and costly, putting pressure on seniors just to accept the initial determination. Moreover, some studies have shown that health insurance companies are more likely to deny coverage than original Medicare, and that can put more pressure on participants than they'd face if they hadn't chosen a Medicare Advantage plan.

Another issue involves out-of-pocket costs. Most Medicare Advantage plans charge copayments, deductibles, and coinsurance payments. Depending on your health condition, you might end up paying substantial amounts of money on such charges, depending on your maximum out-of-pocket policy limits. By contrast, Medigap policies that supplement original Medicare are largely standardized, allowing you to choose the combination of provisions that fit your needs best.

3. Are you prepared to stick with Medicare Advantage if your health deteriorates?

Medicare highlights the fact that participants can switch back and forth between traditional Medicare and a Medicare Advantage plan. The Medicare open enrollment period occurs annually between Oct. 15 and Dec. 7, and during that time, you can switch from original Medicare to a Medicare Advantage plan, from Medicare Advantage back to original Medicare, or from one Medicare Advantage plan to a different one. Medicare itself imposes no penalty on those switches if they happen in the correct time frame.

The problem, though, is that if you drop your Medicare Advantage plan to move back to original Medicare, you'll also likely want a Medigap supplemental plan to cover some costs that Medicare doesn't pay. That can be problematic, especially if your health has deteriorated, because the private insurers that offer Medigap plans aren't obligated to offer you a policy except under very specific situations that create what are known as guaranteed issue rights. If you can't afford original Medicare without a Medigap policy, then you'll essentially be stuck with your Medicare Advantage plan coverage.

More people are choosing Medicare Advantage plans, and cost is a primary factor. If you're not aware of some of the issues surrounding Medicare Advantage, however, you might end up making choices that you'll later regret. By considering these questions right now, you'll put yourself in a better position to make the most of your coverage later.

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