Once you turn 65, you're eligible to sign up for health coverage under Medicare. And at that point, you can choose to stick with original Medicare (Parts A, B, and D) or Medicare Advantage.
Medicare Advantage is often hailed as a more cost-effective alternative to original Medicare. And one thing enrollees tend to like about it is that Medicare Advantage plans limit your out-of-pocket spending on an annual basis, whereas with original Medicare, you don't get that same guarantee. Rather, it's generally advisable to put a Medigap policy in place if you have original Medicare to potentially avoid catastrophic costs.
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But while Medicare Advantage has its benefits, it's also far from perfect. Here are a few issues you might face if you decide to sign up for a Medicare Advantage plan.
1. You may not be able to see your favorite doctors
When you sign up for original Medicare, you basically get the option to see any provider that accepts Medicare. But Medicare Advantage plans work differently.
These plans are more similar to employer-sponsored insurance in that you're limited to a specific network of providers, hospitals, and pharmacies. And going out of network could prove to be extremely costly.
Compounding the problem is the fact that provider networks for Advantage plans can change from one year to the next. So you might find a provider you like and trust only to find that you're unable to see them because they're no longer in your plan.
2. You might end up paying for benefits you don't get to use
One reason Medicare Advantage appeals to seniors is that these plans commonly offer supplemental benefits that original Medicare doesn't. It's common, for example, for Medicare Advantage plans to pay for dental services, which is something original Medicare doesn't pay for. And a lot of Advantage plans offer benefits that go way beyond original Medicare, like fitness club benefits and meal delivery services.
The problem, though, is that to qualify for some these benefits, you generally need a documented medical condition that justifies your ability to receive them. If you have a condition like diabetes, for example, that can be managed by diet, then you might qualify for meal delivery or nutrition benefits under a Medicare Advantage plan. But if you don't have such a condition, then you may not get to use those specific benefits, even though you're paying to have access to them.
3. You may end up needing prior authorization for more in-depth care
The Kaiser Family Foundation says that 99% of Medicare Advantage enrollees are in plans that require prior authorization for at least some services. With original Medicare, that's generally not a requirement. This not only puts an added burden on you as a patient, but could also, in some cases, delay essential treatment or diagnostic services due to red tape.
4. Your local hospital system may not accept your insurance
As mentioned earlier, with Medicare Advantage, you're limited to a specific provider network. But a growing number of hospital systems are dumping Medicare Advantage due to a variety of issues. These include high prior authorization denial rates and slow payments from insurers.
Last year, Mayo Clinic began dropping Medicare Advantage plans in certain states. And more recently, Scripps notified patients that it's terminating a large number of Medicare Advantage contracts -- a move that's projected to affect more than 30,000 seniors.
For some people, Medicare Advantage may be the right choice when it comes to health coverage. But do your research thoroughly before deciding that Medicare Advantage is right for you. And if you come to the conclusion that you want to move forward with an Advantage plan, pay close attention to plan ratings so you're able to see which options rank more favorably among existing enrollees.
