Despite a barrage of marketing touting little to no-cost health insurance plans, many Medicare Advantage plans have hidden costs and restrictions that ultimately result in less value and more stress for the healthcare consumer. 

This article by USA Today highlights two recent examples of the pitfalls of Medicare Advantage.  In one case, a large health system with hospitals in Virginia and Ohio cut off in-network access to consumers enrolled in some Medicare Advantage plans, leaving those beneficiaries exposed to higher out-of-network rates for care. And in another, two San Diego doctors groups terminated contracts with Medicare Advantage plans over concerns about payments and routine denials of coverage. In this case, about 32,000 patients were affected – they will need to either switch Medicare plans or find new doctors.

Unlike original Medicare, Medicare Advantage plans have networks. To receive maximum coverage, beneficiaries are restricted to seeing in-network providers. Contracts are regularly renegotiated, so a doctor or hospital that is in-network one year could be off the plan the following year. 

Delays and denials

Medicare Advantage plans are run by private insurance carriers that are paid by the government on consumers’ behalf upon enrollment. These companies require prior authorizations and pre-approvals for care. They have the power to delay or deny care that a patient’s medical team has deemed necessary. If a certain procedure or medication is denied, it leaves the patient exposed to a potentially lengthy appeal process while suffering in pain. This could also result in steep out-of-pocket care costs if the patient opts to go out of network.

Original Medicare consists of Part A (hospital insurance) and Part B (medical insurance). It is accepted across the country. It has no networks, no copays, no pre-approvals, no prior authorizations and no maximum out-of-pocket costs. When coupled with a Medicare supplement policy, it provides predictable healthcare costs. It is the gold standard in senior healthcare plans. While Medicare Advantage plans often seem more cost-effective, the hidden costs and limitations on care almost always make them a riskier bet.