7 Reasons Why Medicare Advantage Plans Are Bad

December 20, 2022

why medicare advantage plans are bad

People inquire about Medicare Advantage plans with their friends, neighbors, and healthcare professionals, according to our experience. This brings up Medicare Advantage nightmares and a laundry list of reasons why individuals despise their current or prior plan.

Over the years, we have heard from several individuals, particularly healthcare practitioners. They claim to detest Medicare Advantage Plans. But are Medicare Advantage Plans just as bad?

Apparently, there are genuine reasons why individuals dislike Medicare Advantage Plans.

Key Takeaways

Individuals consider Medicare Advantage Plans to be bad because: 

  • Free plans are not truly gratis.
  • Hospitalization costs more, not less
  • They need several copayments for the same condition.
  • It is more probable that you will visit a nurse practitioner than a physician.
  • They require a recommendation.
  • Plan features, fees, and providers fluctuate annually.
  • Exorbitant out-of-pocket maximums

Major Drawbacks of Medicare Advantage Plans

Here are the seven reasons why Medicare Advantage Plans are bad:

1. Free Services Are Not Actually Free

People’s ignorance of Medicare Advantage Plans is the underlying issue at hand.

Medicare Part C is the private health plan option for Medicare. Medicare Part C plans, often known as Medicare Advantage, are a form of Medicare health plan offered by private organizations under contract with Medicare.

Particularly, many individuals do not comprehend copayments (copays) and coinsurance.

Coinsurance is a proportion of the total amount that you must pay for a medical service. The answer to the question “how can Medicare Advantage plans be free?” is because they are not.

Medicare Advantage is a cost-sharing program. Original Medicare requires recipients to pay approximately 20% of the cost for all Medicare-approved treatments, while Medicare pays 80%.

With a Medicare Advantage plan, you are responsible for around 20% of your expenditures, but your out-of-pocket expenses have an annual limit. This eliminates one of the most significant issues with Medicare Parts A and B.

2. Hospitalization Costs Increase

This is true in several situations and with numerous strategies.

In fact, according to a recent research by the Kaiser Family Foundation, half of all Medicare Advantage members would pay greater expenses unlike the conventional Medicare patients.

Original Medicare is a private, fee-for-service health insurance plan for Medicare recipients. There are two components. Part A covers hospitalization. Part B covers medical expenses for a 5-day hospital stay. Given the escalating expense of hospitalization, this is both startling and reasonable.

This fact further emphasizes the necessity of yearly scrutiny of Medicare Advantage Plans in order to avoid bill shock. Copayments for ambulance, emergency department, diagnostic, hospitalization, and inpatient medicine quickly accumulate.

3. You Must Pay Many Copayments for the Same Condition

Medicare Advantage is a scheme based on a pay-as-you-go model. You pay monthly Medicare Part B premiums.

Medicare Part B provides medical coverage for Original Medicare beneficiaries. It includes visits to the doctor, preventative care, testing, durable medical equipment, and supplies. It covers 80 percent of the majority of medically required treatments.

You may pay a monthly premium and an extra premium for the plan (if applicable), but the majority of your expenditures are incurred when you utilize healthcare services.

If you visit your primary care physician for an issue, you must pay a copayment. If your physician sends you to a specialist, you must pay a second copayment. If your expert prescribes lab tests or diagnostic tests, you must pay a copayment for each one.

4. You’re Unlikely to See a Doctor 

To pay providers, HMO and PPO health plans employ capitation. A capitated contract provides a flat price to a network provider for each patient covered.

Under a capitated contract, an HMO or managed care organization pays a fixed sum to a health care provider on behalf of its members.

A person or organization authorized to provide medical care. Doctors, nurses, and hospitals are examples of providers of health care.

As a result, many primary care group offices use nurse practitioners and assistants to decrease expenses and treat the greatest number of patients.

5. You Must Have a Referral

This is accurate for HMO plans and certain PPO policies.

According to the Kaiser Family Foundation, virtually all Medicare Advantage subscribers have prior authorization requirements.

Health plans utilize prior authorization to manage healthcare expenditures. Before accessing specific treatments, medical services, or prescription medicines, authorization is a requirement by the majority of HMO plans and a subset of PPO policies. Health plans are in the business of earning a profit, and this is one of their key cost-controlling measures.

In addition, Congress enacted a similar cost-cutting measure for Medicare supplement insurance.

Medicare Supplements are additional health insurance policies that Medicare recipients can purchase to fill the gaps in their Original Medicare (Medicare Parts A and B) coverage. As of January 1, 2020, new Medicare recipients will no longer be able to purchase Medigap plans that cover the Part B deductible, a change expected to reduce unnecessary doctor visits.

6. Benefits, Costs, and Providers Vary Annually

This is correct according to the regulations established by the Centers for Medicare and Medicaid Services.

The Centers for Medicare & Medicaid Services (CMS) is the U.S. federal agency responsible for administering the Medicare, Medicaid, and Children’s Health Insurance Programs.

They can also switch provider networks.

This is the primary reason Medicare Advantage members should compare plans every year.

7. High Maximum Out-of-Pocket Limits

Doctors, hospitals, pharmacies, and other healthcare providers agree to health plan members’ services and supplies at a set price are in-network providers.

With some health plans, your care is only covered if you get in-network services. For PPOs, the average is $8,828 for both in-network and out-of-network services. These figures are expected to increase in the future.

The future increase is reflected in the new maximum out-of-pocket limit set by CMS, which increased from $6,700 to $7,550.

Summary on the Pros and Cons of Medicare Advantage Plans

MA Plan Pros

  • The maximum annual out-of-pocket expense is $7,550.
  • Many plans cost $0 more a month
  • Most plans provide medication coverage
  • Many provide basic coverage for hearing, dental care, and vision
  • Includes possible gym discount

MA Plan Flaws

  • Only permitted to switch during Open Enrollment
  • Plans are difficult to compare since they are not standardized.
  • No countrywide coverage (plans are not portable).
  • The majority of plans are HMOs that need referrals to see specialists.
  • Plans can alter their health and drug coverage annually

About the author 

Antony W is a professional writer and coach at Help for Assessment. He spends countless hours every day researching and writing great content filled with expert advice on how to write engaging essays, research papers, and assignments.

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}