Why Medicare Advantage Plans Are Bad: High Out-of-Pocket Costs, Limited Network of Providers, and More

Introduction

Medicare Advantage plans are health insurance plans that are offered by private companies and approved by the Centers for Medicare & Medicaid Services (CMS). They offer an alternative to traditional Medicare and provide additional benefits such as vision, dental, and hearing coverage. While Medicare Advantage plans can be appealing due to their additional benefits, they often come with a number of drawbacks that make them a less than ideal choice for many people.

In this article, we’ll explore why Medicare Advantage plans are bad and why you should consider other options when it comes to your health insurance coverage. We’ll look at the high out-of-pocket costs, limited network of providers, lack of choice in plans, reduced coverage for prescription drugs, strict eligibility requirements, subpar customer service, and poor quality of care associated with these plans.

High Out-of-Pocket Costs

One of the biggest drawbacks of Medicare Advantage plans is their high out-of-pocket costs. These plans typically require you to pay a monthly premium, as well as an annual deductible and copayments for services. In some cases, these costs can be much higher than those associated with traditional Medicare.

For example, a study by the Kaiser Family Foundation found that enrollees in Medicare Advantage plans had an average out-of-pocket cost of $4,744 per year, compared to $3,064 per year for traditional Medicare beneficiaries. This means that enrollees in Medicare Advantage plans could be paying up to 54% more in out-of-pocket costs than those enrolled in traditional Medicare.

Limited Network of Providers

Another major drawback of Medicare Advantage plans is their limited network of providers. Many plans only cover services from providers who are part of the plan’s network. This means that if you need to see a specialist or receive treatment from a provider outside of the plan’s network, you may be responsible for the full cost of the service.

This can significantly limit access to care and can be detrimental to those who need specialized care or live in an area where there are few providers in the plan’s network. A 2017 report from the Government Accountability Office found that 41% of Medicare Advantage plans had fewer than 10 specialists in their network and 13% of plans had no specialists in their network.

Lack of Choice in Plans

Medicare Advantage plans also offer limited choice in plans. Many plans only offer one or two options, which means that you may not be able to find a plan that meets your needs. This can lead to inadequate coverage and leave you exposed to unexpected medical costs.

A 2019 study published in Health Affairs found that enrollees in Medicare Advantage plans were more likely to have gaps in coverage than those enrolled in traditional Medicare. The study found that enrollees in Medicare Advantage plans were 14% more likely to have out-of-pocket spending greater than 10% of their income and 11% more likely to have out-of-pocket spending greater than 20% of their income.

Reduced Coverage for Prescription Drugs

Medicare Advantage plans also often offer reduced coverage for prescription drugs. Many plans have lower drug limits than traditional Medicare, meaning that you may be responsible for a larger portion of the cost of your medications. This can make it difficult to afford the medications you need and can lead to poorer health outcomes.

A 2018 analysis by the Medicare Rights Center found that enrollees in Medicare Advantage plans were more likely to skip taking their medications due to cost than those enrolled in traditional Medicare. The analysis found that 45% of enrollees in Medicare Advantage plans reported skipping medications due to cost, compared to 33% of enrollees in traditional Medicare.

Strict Eligibility Requirements

Another downside to Medicare Advantage plans is their strict eligibility requirements. Many plans require you to live within a certain geographic area and/or have specific medical conditions or disabilities in order to qualify for coverage. This can make it difficult for certain groups of people, such as those with disabilities or chronic illnesses, to find a plan that meets their needs.

A 2018 report from the National Council on Aging found that nearly one-third of Medicare Advantage plans had eligibility requirements that excluded individuals with disabilities or chronic conditions such as diabetes, heart disease, and cancer. The report also found that plans that did accept individuals with disabilities or chronic conditions often had higher premiums or higher out-of-pocket costs.

Subpar Customer Service

Another issue with Medicare Advantage plans is their subpar customer service. Many plans have long wait times and do not offer adequate support when it comes to answering questions or resolving issues. This can make it difficult to get the help you need and can leave you feeling frustrated and confused.

A 2020 survey conducted by Consumer Reports found that 63% of respondents enrolled in Medicare Advantage plans reported experiencing poor customer service. The survey found that many respondents had difficulty getting answers to their questions or resolving issues with their plan.

Poor Quality of Care

Finally, Medicare Advantage plans can also offer poor quality of care. Many plans have fewer resources available to provide care and may not offer the same level of care as traditional Medicare. This can lead to poorer health outcomes and can compromise the safety and wellbeing of enrollees.

A 2019 report from the National Institute for Health Care Reform found that enrollees in Medicare Advantage plans were more likely to receive suboptimal care than those enrolled in traditional Medicare. The report found that enrollees in Medicare Advantage plans were more likely to receive unnecessary tests and treatments and were less likely to receive recommended preventive screenings.

Conclusion

Medicare Advantage plans can be a tempting option due to their additional benefits, but they come with numerous drawbacks that make them a bad choice for many people. The high out-of-pocket costs, limited network of providers, lack of choice in plans, reduced coverage for prescription drugs, strict eligibility requirements, subpar customer service, and poor quality of care associated with these plans can make them a costly and potentially unsafe option.

If you’re considering enrolling in a Medicare Advantage plan, it’s important to carefully weigh the pros and cons and consider other options such as traditional Medicare or a Medicare Supplement plan. These plans may offer better coverage and more affordable out-of-pocket costs, making them a better option for many people.