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Advantage… Or Trap?

Medicare Advantage... Or Trap?We’ve all heard the expression, there’s no free lunch, so if you think about how much insurance companies spend marketing Medicare Advantage plans, it shouldn’t surprise anyone that those plans are very profitable for the insurance company.

While the most popular Medicare Advantage plans often have $0/month premiums and often offer dental, vision and hearing benefits, the plans’ out of pocket maximums are typically range from $3,500 to $8,850/year – which does not include the Medicare Part D benefits.  By limiting access to providers and by adding copays that can run hundreds of dollars a day, insurers have an effective way to control costs and assure the plans profitability.

Make Sure Medicare Advantage Works To YOUR Advantage… Not The Insurers

Medicare Advantage can work well for generally healthy people with their low to no monthly premiums and reasonable copays for doctor visits.  However, the reality is that seniors’ health tends to decline with age, so the decision you make today has important long-term implications.  Also, there is no guarantee that the inexpensive PPO Medicare Advantage plans will stay inexpensive, especially as more baby boomers age and their health declines.

Advantage… Or Trap? Many people sign up for Medicare Advantage plans because of the enticing $0/month premiums, combined with dental, vision and hearing benefits that some advantage plans offer.  Everything is good, until that person develops a serious health condition. Suddenly, they find their inexpensive Medicare Advantage plan may be costing them thousands of dollars every year.  They may also be disappointed to discover that the specialists they would like to see are not in-network for their plan.  The inability to have treatment covered by the providers or treatment facility they want can have serious financial and health consequences.

Around this time, they talk with a friend or family member who has a Medicare Supplement that allows them to go to any provider nationally who takes Original Medicare.  They are dismayed to find out that Medicare Supplement insurance has a different set of eligibility rules than Medicare Advantage or ACA compliant health insurance plans.  In fact, Medicare Supplement providers are only required to insure you on a guarantee issue basis within 6 months of your Medicare Part B enrollment date, unless they qualify for a Special Enrollment Period.

Because the seniors in our example are typically long past their 6 month guarantee issue enrollment window for Medicare Supplements and will likely be denied because of pre-existing conditions, their only options are to either switch to another Medicare Advantage plan or have Original Medicare only, perhaps with Part D prescription coverage.  However, the financial risks of having Original Medicare without a Medicare Supplement effectively lock people into having Medicare Advantage plans… for the rest of their life.  See related article in NPR.

The marketing hype on the Medicare Advantage plans is high, so you absolutely must go beyond the bullet points that the marketers want you to focus on and understand the details of the plan.  Medicare Advantage plans are profitable to the insurance companies for a reason and you need to go into this with your eyes open and understand all the risks and possible opportunities.

Be sure to look carefully at the Summary of Benefits and Evidence of Coverage, so you can understand what you’re financially responsible for.  Make sure you can afford the out of pocket maximum, if you have a bad year health wise, both today and in the future.    If the plan includes medications, make sure your medications are covered and know what your out of pocket costs will be.

Also, it’s critical to make sure your most important providers and hospitals are all in-network for your Medicare Advantage plan. Don’t trust the provider look up tools and for your own protection call to verify they are in-network for that specific plan’s network.  Also, check to see if that plan requires referrals from a Primary Care Physician to see a Specialist and what procedures may require prior authorization.

Even so, the reality is that Medicare Advantage insurance companies are squeezing doctors and hospitals to accept lower payments than what they receive from Original Medicare, so some doctors and hospitals are dropping out of Medicare Advantage plans.  They can do that mid-year and even in the middle of treatment and that is completely outside your control. See related article in USA Today.

Finally, take a closer look at those enticing benefits that Medicare Advantage plans sometimes offer.  Those dental, vision or hearing benefits may be quite limited and may not be in-network for your preferred providers.

Medicare Advantage... Or Trap

Questions? Give us a call at (303) 456-7967 or toll free at (800) 416-4481. We’re glad to help!  Or fill out a Personalized Medicare Quote Request and we’ll be happy to explain all the options and send your a quote for you to review at your convenience.

* Best Price Guarantee:  Because health insurance rates are filed with and regulated by the Colorado Division of Insurance, you won’t find the plans we sell offered for less anywhere else. If you buy from Colorado Health Insurance Brokers, another agent or directly from the health insurance company, you’ll pay the same monthly premium for the same plan.