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3 Reasons to Reject Medicare Advantage Plans

What is Medicare Advantage? 

What are medicare advantage plans and why do they get so much hate? Medicare Advantage plans are sometimes referred to as Part C plans or Managed Care Plans. They are an alternative to Original Medicare. So, they will replace your original Medicare entirely.

They must offer at least the same benefits as Part A & Part B but very often they will offer additional benefits such as dental, vision, hearing, prescription drugs, and more. You’ll also have an out of pocket maximum which is not offered by Original Medicare.

These plans are offered by private carriers. Benefits and prices can vary widely. Some plans will even claim to be “free”. Of course, they are not. You will have to pay for Part B at the very least. Basically, Original Medicare will pay a Medicare Advantage plan for taking on the risk of a beneficiary, but you will still have to contribute financially. All of this may sound appealing, but now let’s dive into three reasons you may want to reject a Medicare Advantage Plan. 

Preauthorization and Referrals

Medicare Advantage plans are offered by private carriers. The plans are not standardized and can offer different benefits. The need for preauthorization and referrals can be a major problem. 

You are likely familiar with referrals. Basically, if you need to see a specialist, you have to go through your PCP. Not only is this an additional appointment, but it’s additional wait time. Days and weeks can stack quickly and can be extremely detrimental to your health when time is of the essence. 

Preauthorization is another major hurdle. Even if your doctor authorizes certain tests or procedures, your insurance may have to preauthorize these services. This can lead to longer waiting times or possible denials. This is not the case with Medigap plans. 

Out of Pocket Expenses

Many medicare advantage plans claim to be “free”. But in the fine print, you’ll see that at least you have continued to pay for Part B. When you compare these costs and the added benefits of a Medigap plan, it’s easy to see why many people are enticed. However, these plans may cost you in the long run.

Another problem is the out of pocket maximum. Now, of course, this is a very good thing and it’s designed to help protect you from major medical bills. However, this out of pocket max resets every year. So, if you are undergoing continuous or long term medical care, you will need to meet that out of pocket max again once the year resets. This can be quite a financial burden when compared with Medigap plans.

With a medigap plan, you will pay a larger monthly premium. However, almost all of your medical bills for the year will be covered. So, with Plan G, for example, your financial spending is limited to your monthly premiums and your Part B deductible. All other expenses are covered regardless of how much medical you may need. 

You also have to take into consideration potential out of pocket expenses for doctors and hospitals that are not within the network. 

Networks & Travel

This brings us to the last reason you may want to reject a Medicare Advantage plan: networks. With Part C plans, you need to utilize hospitals and doctors that are in the network. This can be very restricting. People have even reported having to travel significant distances to find specialists who accept their plans. With larger medical needs as we age, this can be a major problem.

Additionally, you may not have coverage if you choose to travel. Travel is one of the things that so many people look forward to in this retirement and lack of adequate coverage could certainly put a damper on that.

Now if a managed care plan is the route for you, there are many ways to overcome some of these pitfalls. We highly encourage you to work with a broker to ensure you pick a quality plan that will meet your needs.

Owner and CEO of Smedley Insurance Group, Inc. at iHealthBrokers | Smedley Insurance Group, Inc. | Website | + posts

Jesse Smedley is the Principal Broker for iHealthBrokers and the founder, president, and CEO of Smedley Insurance Group, Inc. and iHealthBrokers.com. Since the inception of SIG in 2007, Jesse has been dedicated to helping people save money on their health insurance by providing them with resources to educate themselves on all their health insurance options, both under age 65 and Medicare beneficiaries. He is featured in many publications as well as writes regularly for expert columns regarding health insurance and Medicare.

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