Many seniors choose a Medicare Advantage plan over traditional Medicare because they hope the plan will provide broader coverage. In fact, an estimated 32.8 million people -- more than half of all Medicare recipients -- were enrolled in an Advantage plan as of 2024.
Unfortunately, these Medicare Advantage plan enrollees are at risk because of a serious gap in coverage. This troubling news comes from a report released by the Office of the Inspector General.
Here are some details on the coverage gap, along with some insight into what this could mean for retirees.
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Inspector General reveals that Medicare Advantage has a serious gap in coverage
According to a report prepared by the IG for the Department of Health and Human Services, behavioral healthcare is covered by managed care plans for the majority of Medicare enrollees.
Behavioral healthcare is care for mental health conditions and substance abuse disorders. When this care is available as part of a managed care plan, it is typically covered only if plan enrollees can find an in-network doctor.
Advantage plans must provide a list of in-network providers. This helps seniors enrolled in these plans understand their care options and find a provider who will take their insurance.
Unfortunately, the Inspector General's report revealed that the majority of Medicare Advantage plans had "limited networks of behavioral health providers."
Even worse, many of the providers listed as participating in the plan were "ghost providers." Their showing up on the list makes the network look larger, but they don't actually provide any services to enrollees.
This is a huge issue, as the networks look comprehensive, but seniors who are signed up for Medicare Advantage plans end up with few to no options for behavioral healthcare.
Missing out on behavioral healthcare can be a huge problem
Previous IG reports have shown that there were fewer than five active behavioral healthcare providers per 1,000 enrollees in Medicare Advantage plans.
Since the Centers for Disease Control and Prevention has warned that around 4% of adults 70 and over suffer from depression, and roughly 17% of the elderly have health problems resulting from drug and alcohol abuse, a lack of access to behavioral healthcare providers could be a huge problem.
Unfortunately, covering this treatment out-of-pocket could put a significant strain on retirees, many of whom struggle to cover their expenses on Social Security and retirement plan distributions.
Retirees who are exploring their Medicare Advantage options should be alert to these issues and should compare plans carefully.
How can Medicare Advantage plan enrollees protect themselves?
If an Advantage plan lists a provider as being in-network, retirees may wish to call and verify this so they ensure they aren't tricked by a ghost provider. Otherwise, they may not get the care they need, or may have to pay for it out of retirement savings from a 401(k) plan or other sources.
This is just one of many access-to-care issues retirees may face.
While Medicare and Medicare Advantage help provide coverage, there are gaps. Retirees should ensure they invest wisely, so they have the funds they need to cover any medical services that may be required.
