Before making a decision on what type of plan is right for you, it’s important to gather accurate information and weigh pros and cons. So, let’s set the record straight and identify some weaknesses of Medicare Advantage, or “Part C”, plans.
“If I have a Medicare Advantage Plan, I have a supplement to my Medicare and can use either coverage as I see fit.”
Medicare Advantage plans actually replace Original Medicare plans. Therefore, Original Medicare pays nothing toward services. In fact, with most HMOs, individuals who use out-of-network services will be responsible for 100% of costs.
“It’s a free plan.”
When a beneficiary is enrolled into Medicare Advantage, Medicare pays for the plan upfront to cover the health costs for the year. The plan will keep more money if they can limit the cost of the beneficiary’s medical care in the year.
“I don’t have to keep paying for Part B.”
This is incorrect. To be eligible for Medicare Advantage, you must continue to pay for Part B. However, in some rare cases, a plan could pay back a portion the Part B premium. Special Needs Plans (SNP) are the only type of Medicare Advantage plan where the insured does not need to pay for Part B coverage.
Drawbacks of Advantage Plans
Medicare Advantage Plans have Maximum Out of Pocket amounts that limit potential cost for services.
For most individuals, Maximum Out of Pocket makes Advantage plans a better option than Original Medicare. However, when compared to the stability of a Medigap plan, Advantage plans carry higher risk. Max Out of Pocket for HMO plans can range from $500 to $3,400, depending on the service area. PPO networks are typically more expensive, but offer more freedom.
Denial of Procedures
When on Original Medicare, if your doctor recommends a medical procedure or treatment, then you can go to any doctor or facility to have this procedure. (unless the procedure itself is not covered by Medicare). However, a Medicare Advantage plan usually has a non-Medical Plan Administrator that works to keep the plan’s cost as low as possible. In many cases if the doctor recommends a treatment, if there is a lower-cost option to try first, the plan can deny coverage for the recommended procedure to try the cheaper option(s) first.
Optional Supplemental Benefits
Most Medicare Advantage Plans offer additional benefits that Original Medicare does not. These benefits are provided will cost additional money, however, this will be depending on the benefit itself.