ORIGINAL MEDICARE
Medicare advantage plans show up to your door like a wolf in sheep’s clothing. At first glance, it looks like a frugal way to save a substantial amount of money.
If you don’t take a close, hard look at the plan and examine what you are giving up to save a few dollars today, you could be sorry when you need to file a claim tomorrow.
Below, we’ll discuss why Medicare Advantage plans are bad.
Why Medicare Advantage Plans are Bad
The Hassle of Navigating a Limited Network
You can only receive services from a network of selected doctors, hospitals, and facilities
Advantage plans require you to utilize all services from a network of selected doctors, hospitals, and facilities.
Meaning just because a hospital is part of your plan network, it doesn’t mean the doctors are.
You must ask every time you get services if that doctor is part of your Advantage plan network. Each insurance company has several networks.
For instance, my health insurance is through Cigna. But that doesn’t mean that every Cigna doctor is in-network with my particular plan. It’s the same with every private insurance company.
The only question necessary is, “do you take Medicare?”. That’s it, you can use that doctor and they will bill Medicare directly.
Plus, if you have a Medigap plan you know for certain the doctor accepting your Medicare also takes your supplement plan. The difference between Supplements vs Advantage plans is vast.
Know the Difference Between an HMO and PPO
An HMO is a health maintenance organization. In basic terms, this type of provider offers services for a fixed annual fee.
The insurance company pays the provider a set fee just for agreeing to be in the network. The doctor gets paid even if you don’t seek treatment. There is no incentive for the doctor to see you.
HMO plans do not pay when treatment is received outside the network, except in the case of a true medical emergency.
A PPO is a preferred provider organization. These network doctors have agreed to a fee schedule for seeing subscribed members. Doctors and facilities have agreed to be paid discounted amounts for participating in the PPO network.
Everything Requires a Referral
You must make an appointment with your primary doctor to get a referral before you can see a specialist
With a Medicare Advantage plan, you must see your primary doctor before going to see anyone else.
That means if you are having a gastrointestinal illness, it is necessary that you make an appointment with your primary doctor to get a referral to see a gastroenterologist.
You can’t see a podiatrist until you see your primary doctor for a referral. Advantage plans require a lot of primary doctor co-pays to use your policy to its fullest.
Beneficiaries know when they need to see a specialist, without paying an extra $20 to their primary doctor. All these little copays are to deter you from even filing a claim.
Unexpected Plan Changes
When you enroll in a plan, you expect to stay in that specific plan. However, the insurance company can change or even retire the plan.
If your plan is going away and you don’t act, the insurance company will move you to another plan.
Every year, during the annual enrollment period, the insurance company can retire or change the benefits to the Medicare Advantage plans they offer.
Beneficiaries have been stunned to realize at the new year, their advantage plan benefits have changed. Yes, the insurance company does advise of upcoming changes. But so often, our mailboxes fill with junk mail and we miss the Annual Notice of Change.
When it comes to a Supplement plan, benefits are predictable. Those benefits are not going to change. You can depend on the coverage that you’ve come to expect.
Ancillary Products
To entice beneficiaries to give up their Medicare and enroll in an Advantage plan, the private insurance companies usually provide additional services at no cost.
These ancillary benefits do add value to the Medicare Advantage plan but are the value worth the additional risk you take on each year?
Medicare Advantage plans may offer a benefit for silver sneakers, coverage for fitness classes selected by the insurance company.
Most beneficiaries can enroll in the YMCA for a discounted price and have access to all the services offered by the YMCA.
Advantage plans may offer a routine dental visit for x-rays and a cleaning. If you need any work done, you’re on the hook to pay for those services entirely.
Dental plans are available for as little $35 per month and provide coverage for checkups that include x-rays and cleanings, basic and comprehensive services.
The dental services offered through an Advantage plan lull you into a false sense of security thinking you have coverage for dental care when in fact, you will pay for any treatment needed.
Pay Now or Pay Later
Regardless of what type of coverage you select, whether it be an Advantage plan or Medicare and a Medigap plan, there will be a cost-share.
As a beneficiary, you will have a portion of the expenses for which you are responsible.
You can limit your risk, or the dollars you owe by continuing your Medicare and purchasing a Medigap, or Supplement plan to fill the holes left.
There are numerous options for Medigap coverage benefits.
Why are Medicare Advantage Plans So Cheap
The reason advantage plans are so cheap is due to your out of pocket costs are going to be high.
You need to determine ahead of time how you want to pay your share. With a Medicare Advantage plan, you pay little to nothing in premium and accept a large out of pocket maximum. Some plans have a yearly out of a pocket maximum of $5,000. Over a 4-year period that amounts to $20,000.
If you need special care, do you limitations on where you can get care?
My friend Mike found out his lymphatic cancer came back for the third time, he was determined he was going to the Moffitt Cancer Center.
Thankfully, didn’t have an HMO or PPO network. With his Medicare and Plan G, all Mike paid for his treatment was the yearly deductible.
If you’re currently enrolled in an advantage plan and would like to compare rates for a Medigap plan, click here. We’ll be happy to compare premiums in your area side by side to make sure you have the best coverage.
I have a niece that I have became her guardian through the courts . She has disability due from mental retardation from birth. Her father worked and kept her on his Insurance with his job. Now her Father got cancer in 2012 loss his job his home and filed for Medicare for his daughter then, how ever part D was not a law to have then as he continue to fight for his life while he took care of his daughter and 4 young grandsons they never made them selves guardians of their daughter as they did not know they needed to nor did he understand he ever needed to get a part D coverage for her she is 40 yrs now and he has passed a way . I am now playing catch up trying to get her a supplement plan or advantage plan to go with her Medicare . Now they are telling me she will have a Life time late enrollment penalty . Really she is like a 3 or 4 yr old who needs lots of daily help and her dad fought for his life every day he could. She isn’t 65 yrs she is healthy and takes no medicine at now . I am trying to do my best but this means she will pay a pentacle from 2015 to 2019 1% a month .this seems unfair since she could not help her self and her father was fighting every day for his life. Is this really true or is there any thing I can do to avoid this penalty for her .
Hi June. I’m so sorry about your current situation regarding your niece. Unfortunately yes, she will have a penalty for the rest of her life. If her income is low and she qualifies for Medicaid or Extra Help, her penalty would be waived. You could sign her up for a Medicare Advantage Plan that covers prescription medications and only have to pay the penalty she has incurred over the last four years. The 2020 Part D premium is $32.7, so if she went that route she would only have to pay somewhere around $16 per month. ($32.74 x .48 {4 years} = $15.71) The sooner you sign her up, the better. That way she will stop increasing her penalty and it will stay where it’s currently at. If she were to get a supplement plan & pick up Part D now, the monthly premium would be around $48.50. ($32.74 + $15.71 = $48.45) I would recommend looking into getting her Extra Help to see if she can get her penalty waived. I hope this helps!
My husband is 79 and underwent chemo/radiation in 2018; cancer is now gone. however he is undergoing speech and swallowing therapy. We have a medicare advantage thru humana. Everytime there is a procedure or scans, xray we pay a co-pay of $325 or 220 or 180. Amaximum out of pocket of $10,000 for medical and meds together. Is there a better plan? he also has afib and kidney disease and copd. I have the same plan as him, my ailments are not as devastating but I do have a few. Suggestions?
Hi Ruthie! Unfortunately, your husband would not be approved for a Medigap plan. I would recommend two things in your situation. First, work with an agent during each AEP, which is right now, to find a lower cost advantage HMO if possible or PPO with all doctors in-network so his maximum out of pocket costs are lower. Second, since you’re a little healthier, you may be eligible for a Medigap plan. That would lower the total out of pocket costs between both of you.
What would you suggest for a 59 year old female with malignant ascites, I have ssdi and they are putting me on medicare but no information on what my options are. I live in Washington state.
Hi Peggy! Unfortunately, not all states require carriers to offer Medigap plans to those on disability. Washington is one of those states that don’t require it, but some carriers may still offer it. However, the monthly premiums are usually higher for those on disability when compared to those that aged into Medicare.
What most beneficiaries do in your situation is they enroll in a Medicare Advantage plan until they turn 65. Once they turn 65, those on disability will get another Open Enrollment Period that allows them to sign up for a Medigap plan. During this six-month window, you cannot be turned down due to your disability or charged higher premiums.