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Sound Advice: January 10, 2024

Medicare Advantage plans are not the best choices

Medicare Advantage plans, also known as Medicare Part C, are private health insurance plans offered by Medicare-approved private companies. Although these plans can be beneficial for some individuals, there are several reasons why they might not be the best choice for everyone:

1.     Limited Network: Medicare Advantage plans often have a network of healthcare providers, and if you go outside this network, you might have to pay significantly higher costs or even the full amount for services. This limited network can be restrictive, especially if you prefer certain doctors or specialists who are not included. What’s more, the very best doctors may not be in the network; some may not accept any form of Medicare.  And, it’s important to remember that the weakest graduates from medical schools are still called “Doctor”, yet they may very well be in the network.  Do you really want to be treated by them?

2.     Changing Benefits: The benefits offered by Medicare Advantage plans can change annually. This means that the coverage you have this year might not be the same next year. It can be challenging to predict future healthcare needs, and these changes can lead to unexpected out-of-pocket costs.

3.     Prior Authorization and Referrals: Medicare Advantage plans may require you to obtain prior authorization for certain medical services and referrals to see specialists. This can be cumbersome and time-consuming, leading to delays in receiving necessary care.

4.     Out-of-Pocket Costs: Although Medicare Advantage plans often have lower monthly premiums than Original Medicare, they can have higher out-of-pocket costs, such as copayments, deductibles, and coinsurance. These costs can add up, especially if you have frequent healthcare needs.

5.     Geographic Limitations: Some Medicare Advantage plans have geographic limitations, meaning they might not cover you if you travel or live outside their service area. This can be a significant drawback for individuals who spend time in different locations throughout the year.

6.     Complexity: Medicare Advantage plans can be complex, with different rules, networks, and coverage options. Understanding the fine print and comparing plans can be challenging, leading to confusion and potential dissatisfaction with the chosen plan.

7.     Prescription Drug Coverage: Although many Medicare Advantage plans offer prescription drug coverage, the formulary (list of covered drugs) can change annually. If your medications are not covered, you may face higher costs or need to switch to alternative medications. If you have original Medicare, you still have the option of Part D, which is prescription drug coverage.  Here, too, the formulary can change, but you don’t have to have a Medicare Advantage plan to get prescription drug coverage.

8.     Risk of Plan Discontinuation: Insurance companies can decide to discontinue specific Medicare Advantage plans, forcing beneficiaries to find new coverage. This can be disruptive, especially for individuals with specific healthcare needs or preferences.

Yes, Medicare Advantage plans do have apparent advantages (usually vision, dental, and hearing coverage), but the care they offer may not always be the very best available.  Are you willing to gamble your health on that?

The choice between Original Medicare and Medicare Advantage depends on individual healthcare needs, preferences, and budget constraints. It's crucial to carefully evaluate your options and consider consulting with a Medicare counselor or insurance expert to make an informed decision based on your specific circumstances.

N. Russell Wayne, CFP

Any questions?  Please contact me at nrwayne@soundasset.com

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