Is Medicare Advantage Bad? Our List of Pros and Cons

If you’ve talked to other Medicare beneficiaries, you might have noticed they have a strong opinion about Medicare Advantage. Whether it’s good or bad, everyone seems to have a say in it. But, nothing in Medicare is one-size-fits-all. What works for one might not work for another. So, you’ll have to make your own decision. Today, we’ll review a list of pros and cons so you can do just that.

What Is Medicare Advantage?

We won’t get into the weeds of how Medicare Advantage works today, but there are a few basics we should review before we start talking about the pros and cons of Medicare Advantage.

Medicare Advantage plans are offered by private insurance companies. They offer a kind of “replacement” for Original Medicare, which consists of Part A and Part B. They capture all of the benefits of Original Medicare, but instead of getting those benefits from the federal program, you’ll receive them from a private carrier. In addition, the Medicare Advantage plan often includes extra coverage you wouldn’t otherwise find in Original Medicare.

Medicare Advantage: The Pros

Bundled Benefits: Medicare is confusing. Advantage plans can be just as confusing, but they do offer just about everything you need in one convenient plan. If you continue with Original Medicare, on the other hand, you’ll want to enroll in additional plans. This might include a Medicare Supplement, a Part D plan, and a Dental, Vision, Hearing (DVH) plan. That’s a lot of insurance cards to keep track of! 

Extra Benefits: We said that Medicare Advantage plans include extra benefits. Often, they include prescription drug coverage, routine and restorative dental care, hearing and vision services, transportation, gym memberships, meal delivery, and more. Some plans offer several thousand dollars worth of extra benefits at no additional cost. There are many plans available, so you’ll need to read through the Evidence of Coverage (EOC) to find out which ones are included in each specific plan.

Low Premiums: Advantage plans are known for being inexpensive. In fact, many of them offer premiums as low as $0. This is in stark contrast to a Medicare Supplement plan, which could cost between $100 - $300 depending on the plan, your age, your gender, and where you live. However, even though Advantage plans “replace” Original Medicare, you are still required to pay the Part B premium.

Out-of-Pocket Spending Limits: One of the reasons Medicare beneficiaries choose to enroll in either a Medicare Advantage plan or a Medicare Supplement plan is that Orignal Medicare has no limit on your out-of-pocket limits. Medicare Advantage plans all have an annual limit for covered services. Depending on the plan, you may have separate limits: one for in-network services, one for out-of-network services, and one for prescription drug coverage.

So far so good, right? Yes, it’s easy to see why these plans are so attractive to Medicare beneficiaries. But, before you get too excited, let’s review some of the disadvantages.

Medicare Advantage: Cons

Networks: Probably the biggest downside to Medicare Advantage plans are the provider and facility networks. One way insurance companies are able to keep premiums low is by using contracted providers for their members. This is especially true in Health Maintenance Organization (HMO) plans. An HMO plan requires its members to use contracted providers. Otherwise, the member will be responsible for the full cost of services.

Less Predictable: Medicare Advantage plans might have low monthly premiums, but there are still other costs associated with them. You’ll have a deductible, copayments, and coinsurance costs based on the services you receive. That makes these less predictable than Medicare Supplements, which often pick up a set amount of expenses.

Less Portable: We said that you have to utilize a specific network of doctors based on your plan. This gives you less freedom to choose providers and can be cumbersome if you’re someone who travels frequently. Going outside the plan’s service area may limit your plan even more. However, these days, most plans offer nationwide reciprocity. That means that if you have an HMO plan in Arizona, you can also see an HMO provider in Nevada. 

More Rules: Lastly, you may have to follow a few rules when receiving care. Again, this is especially true of the Medicare Advantage HMO plans. You’ll need to choose a primary care physician, obtain referrals to specialists, and try less expensive methods of treatment. Some kinds of Medicare Advantage plans have fewer restrictions.

Is Medicare Advantage Right for You?

Unfortunately, that’s a question only you can answer. Beneficiaries who take the time to really understand their Medicare Advantage plan and learn how to make the most of their benefits are usually happy with their coverage. Those who don’t invest the time are usually not.

Medicare Advantage can offer you a ton of benefits for a very low cost. To learn more about these plans, speak with a Local Medicare Specialist. Our agents understand your market and can help you decide if a Medicare Advantage plan is the right choice for you.