As you approach age 65, you’ll have some decisions to make about medical coverage. On one hand, you can enroll in Medicare. But you may be tempted to choose another option instead: a Medicare Advantage (MA) plan instead. If you’ve seen the advertisements for MA plans, you might think they’re more cost-effective and comprehensive than Medicare. But according to Keith Armbrecht, Founder of Medicare education company, Medicare on Video, that’s not necessarily true.
“I would never choose a Medicare advantage plan,” he says in a YouTube video entitled “Why Medicare Advantage Is The Worst Choice For Seniors.”
Here’s why he’s not a fan of these plans.
What is a Medicare Advantage plan?
Medicare Advantage plans are alternative insurance plans to Medicare, and they’re offered by Medicare-approved private companies. These plans are sometimes called “Part C” or “MA,” and they include Medicare Part A (hospital insurance) and Part B (medical insurance).
Those interested in MA have more than 40 different plans to choose from. The main
reasons to explore them include:
The potential for lower premiums compared to Medicare. In 2022, the average premium was $58, according to 2022 data from the U.S. Senate Committee on Finance.
Out-of-pocket costs may be capped. In 2023, the maximum was $8,300 for approved services.
Most plans include dental, vision, hearing and fitness benefits.
That being said, there are a few downsides to Medicare Advantage plans. Here are some important things to consider before locking into an MA plan.
Limited choice
If you opt for an MA plan, your choice of doctors can be limited and you’re likely to face obstacles in getting approved for procedures or seeing specialists. “The primary reason I would absolutely choose original Medicare and would never choose Medicare Advantage is because I want control over what I do,” says Armbrecht. With an MA plan, he warns, you can face wait times of “weeks, even months,” to get referrals or have procedures authorized.
You’re typically limited to doctors in the plan network and service area, as well,
according to the government’s Medicare website.
Deceptive marketing
The Medicare Advantage plan industry has a history of deceptive practices. In 2022, the Majority Staff of the U.S. Senate Committee on Finance found that Medicare beneficiaries were being inundated with aggressive marketing tactics, false and misleading information and overall predatory marketing from MA providers. According to the report, deceptive Medicare Advantage marketing practices are, “widespread, not isolated events.”
According to a 2022 review from the New York Times, four out of five of the largest MA providers (UnitedHealth, Humana, Elevance and Kaiser) have faced federal lawsuits for fraud and at least eight providers overbilled, according to the U.S. Department of Health and Human Services Office of the Inspector General.
Denied claims
Multiple studies have shown MA plans have a pattern of denying claims that should be covered.
A 2022 review from the Inspector General’s office found that MAs denied 13% of prior authorization requests that met Medicare coverage rules. Essentially, these claims would have been approved under original Medicare. The most commonly denied requests were imaging services, stays in post-acute facilities and injections.
Go to the source
“Medicare is probably the only government program that does exactly what it’s supposed to do and does it very well,” says Armbrecht. In other words, original Medicare is likely your best choice. If you’re nearing 65 and considering your options, you can visit Medicare.Gov for accurate and up-to-date information so you can make the right decision for your health insurance needs.
Once you reach age 65, you become eligible for Medicare, the federal government’s health insurance program primarily geared toward seniors and retirees. Whether you retire early or plan to work for several more years, have already turned 65, or are still a few birthdays away, it’s worth thinking about which Medicare plan you’ll sign up for when the time comes.
Medicare Advantage, or Medicare Part C, is one Medicare plan option — but is it the best choice for you, or should you stick with Original Medicare? Here we’ll cover nine major reasons Medicare Advantage could conflict with your retirement goals.
1. It has a much smaller healthcare provider network
Most — though not all — American healthcare providers accept Original Medicare insurance. The same can’t be said for Medicare Advantage, which has a much smaller provider network.
If you’re trying to maintain your current doctor then it could eliminate a lot of money stress if you make sure they are in the network before going for a visit. If finding a provider you love is important to you, Original Medicare will give you more options. With Medicare Advantage, you’ll have to settle for the best care you can find within the network.
2. Its service area is much smaller
Since Medicare is administered by the federal government, you can use it at any hospital or medical provider in the United States (as long as that provider accepts Medicare, which most do).
In contrast, Medicare Advantage’s smaller provider network is also extremely localized. Whenever you’re seeking non-emergency care, you’re limited to providers in your immediate area.
3. Its provider network is especially small for rural communities
No matter where in the country you live, Medicare Advantage’s network is smaller than Original Medicare’s network, but the network is especially limited for rural communities. According to one study published in 2021, 10.5% of rural retirees who sign up for Medicare Advantage end up switching to Original Medicare.
By way of comparison, only 5% of non-rural retirees switch away from Medicare Advantage.
4. It usually requires referrals to see specialists
With Original Medicare, you can schedule a specialist visit even without a referral. With Medicare Advantage, though, you can’t simply call a specialist and schedule an appointment. Instead, you need a referral from a primary healthcare provider before you can speak with a specialist.
Pro tip: You may need to make some extra money if you have a health condition that requires frequent trips to a specialist.
5. It requires preauthorization for most high-cost services
If you’re enrolled in Medicare Advantage, you’ll likely end up paying for some of the most expensive healthcare services out of pocket unless you get the expense pre-approved.
Those services include inpatient hospital stays, partial hospitalizations, physical therapy, dialysis, hearing exams, psychiatric services, and much more.
If you don’t get the expense approved in advance, you’ll likely end up paying for it out of pocket. For the most part, Original Medicare doesn’t require preauthorization.
6. It often requires preauthorization for Part B medications
Medicare Part B is the medical insurance section of Medicare, and it’s included in all Medicare Advantage plans.
However, you’ll need prior approval before your Medicare Advantage plan will help pay for any outpatient drugs prescribed under Part B (rather than Part D, which covers most
other prescriptions).
Most Part B drugs that require preauthorization are injectable, including injectable medications for osteoporosis, injectable blood-clotting factors for hemophilia, and some oral and injectable end-stage renal disease medications.
7. It can require step therapy for Part B drugs
Step therapy refers to the practice of using a cheaper medication to treat a condition before moving to a more expensive medication.
Unlike Original Medicare, Medicare Advantage plans can require step therapy for Part B medications, meaning your Medicare Advantage plan can refuse to cover medication prescribed by your doctor if there’s a cheaper alternative.
8. It might make hospital stays more expensive
Medicare Advantage might be cheaper for some retirees, especially those who mainly see healthcare providers for preventative health.
But if you end up in the hospital for a week, studies show that 50% of seniors using Medicare Advantage will pay more for that stay than seniors using Original Medicare.
In other words, if you have poor health and know you’re at a higher risk of hospitalization, Medicare Advantage might cost you more over time than Original Medicare.
9. It can make budgeting for healthcare even harder
Since you can’t always anticipate your health needs in advance, budgeting for healthcare is notoriously tricky. If you’re living on a fixed income, though, you need to carefully track your expenses to make sure you don’t overspend.
Original Medicare makes healthcare expenses easier to anticipate by charging you a recurring monthly premium. As a result, you can then visit a healthcare provider at a lower cost and without rearranging your budget to accommodate the additional expense.
In contrast, most Medicare Advantage plans don’t have a monthly premium. Instead, you pay for medical expenses out of pocket until you hit your out-of-pocket max, which makes it hard to know how much you could be spending on healthcare in a given month.
Bottom line
Medicare Advantage plans can offer crucial benefits that make life easier for some retirees, especially those in good health with relatively few healthcare needs.
But it’s definitely not the right choice for everyone. You should weigh the pros and cons with your situation before making a final decision.
If you anticipate hospital stays, prefer to pick your own provider, and dislike the idea of getting prior approval for most expenses, Original Medicare might be a better choice for you to prevent the need to make extra money for insurance.
Seniors who opted for private Medicare insurance plans should not be shy about pushing back on denials for pre-authorizations, according to a new study.
Of the 35 million requests by Medicare Advantage enrollees seeking prior authorization for healthcare services or medications in 2021, two million of those requests were fully or partially denied, according to a new analysis from the Kaiser Family Foundation (KFF), a nonprofit organization.
The results raise flags that the approval process may create unnecessary obstacles for patients to receive medical care and underscored that seniors may want to spend more time shopping around for these popular plans to avoid these hassles.
“The high frequency of favorable outcomes upon appeal raises questions about whether a larger share of initial determinations should have been approved,” Jeannie Fuglesten Biniek, KFF’s associate director, program on Medicare Policy, and Nolan Sroczynski, a KFF data analyst, wrote.
“It could reflect initial requests that failed to provide necessary documentation. In either case, medical care that was ordered by a healthcare provider and ultimately deemed necessary was potentially delayed because of the additional step of appealing the initial prior authorization decision, which may have negative effects on beneficiaries’ health,” the authors concluded.
Don’t Take No for an Answer
The pre-authorization hoop primarily impacts people enrolled in Medicare Advantage plans, a privatized, managed-care version of the traditional Medicare program.
In 2022, virtually all Medicare Advantage enrollees (99%) were enrolled in a plan that required prior authorization for some services. Most commonly, higher-cost services, such as chemotherapy or skilled nursing facility stays, require prior authorization, according to KFF’s study, which reviewed data from 515 Medicare Advantage contracts representing 23 million Medicare Advantage enrollees.
Medicare’s basic, original Part A (hospital insurance) and Part B (medical insurance) cover obvious things you expect from health insurance: hospital stays, appointments with your doctor when you’re sick, ambulance services, flu shots. But the government’s healthcare program for Americans 65 or older also pays for many things that might surprise you.
If you’re on Medicare or are approaching that time of your life, you’ll want to be aware of these 10 Medicare benefits that enrollees often don’t know about and that can keep you from dipping into your savings.
1. Annual ‘Wellness Visits’
Once you’ve had Medicare Part B coverage for a year, you’ll get what’s called an annual wellness visit with your doctor, who will take routine measurements, such as your height, weight, and blood pressure, and review your medical history. You’ll fill out a “Health Risk Assessment” questionnaire to identify risk factors — so you and your doctor can work on keeping you healthy. Medicare says the appointments also can include “detection of any cognitive impairment.” That means your physician will be on alert for signs of Alzheimer’s or similar ailments.
2. Obesity Counseling
Obesity causes many illnesses and can make frail older bodies much weaker. Diabetes and heart disease rates skyrocket for those who are overweight or obese. Joint and bone diseases are easier to manage at healthy weight levels. If you have a Body Mass Index (BMI) reading of 30 or more, Medicare will cover face-to-face counseling sessions in a primary care setting (like a doctor’s office) to help you bring your weight down to a healthier level.
3. Help to Quit Smoking
If you’re a smoker, Medicare can help you kick the habit. Letting go can be tough, especially if you’ve been a lifetime smoker. To help you break your nicotine addiction, Medicare will pay for eight in-person counseling sessions per year. But note that Medicare’s drug coverage will not pay for stop-smoking products sold over the counter at drugstores, like nicotine patches, lozenges, and gum.
4. Some Hearing Exams
Basic Medicare usually won’t pay for hearing aids or routine hearing tests. But it may cover a hearing exam if your doctor says it’s medically necessary. Hearing is related to balance. When a senior is having balance issues, a physician may want to check the ears to see if there’s an inner ear problem requiring medical treatment.
5. Hospice Care
Hospice care comprises a host of treatments at the end of a person’s life. Medicare will pay for a long list of hospice services, including nursing care, and grief and loss counseling for the patient and family. Hospice coverage applies when a Medicare recipient has been given six months or less to live and has agreed to forgo further attempts at a cure. Medicare-certified hospice care usually takes place where you already live — whether that be at home or in a nursing home. You can also receive hospice care in an inpatient facility. However, it’s important to note Medicare doesn’t cover your room and board, though it may pay for a short-term stay at a hospice facility if your hospice team determines you need that. If you’re dealing with any other health issues not related to your terminal illness, that should also still be covered by Medicare. But the government’s Medicare site points out that’s fairly unusual. Once you select hospice care, the hospice benefit typically covers everything you need.
6. Counseling for Alcohol Problems
Much like smoking, alcohol abuse can have seriously negative effects on the wellness of an older person. Medicare provides alcohol misuse screening and treatment free of charge. It covers one screening per year and up to four brief counseling sessions if the reviewing physician believes a patient needs help.
7. Disease Screenings
Medicare covers screenings for numerous diseases as part of its preventive services. Medicare will pay for testing to detect HIV and other STDs, diabetes, glaucoma, breast and cervical cancer, colon and prostate cancer, and heart disease. Patients with histories of smoking can get an annual lung cancer screening, and Medicare also covers annual screenings for depression and other behavioral health issues that are a concern for seniors.
8. Special Footwear for Diabetes
One of the least-known Medicare benefits is its allowance for specialized shoes for people with diabetes. The disease can cause poor or abnormal circulation in the feet, and a lack of proper treatment can result in the need for amputation. Another risk is diabetic neuropathy, which can damage nerve endings in the feet. Diabetic footwear helps regulate circulation and reduce the danger of neuropathy. Medicare will pay for one pair of custom-molded shoes and inserts and a pair of extra-depth shoes if they’re prescribed and provided by a podiatrist or other qualified health professional. Your insurance will also cover another two pairs of inserts for your custom-molded shoes and three pairs of inserts for extra-depth shoes each calendar year.
9. Wheelchairs and Scooters
Wheelchairs and mobility scooters are important tools to help those with debilitating conditions lead normal lives. Medicare will pick up the cost under certain circumstances. The wheelchair or scooter must be considered medically necessary. Your doctor would need to certify that you are unable to walk without difficulty. The physician would be required to write a prescription for the vehicle or wheelchair after giving you an exam.
10. A Walk-In Bathtub (Maybe)
A walk-in tub can help those with joint problems or other issues that make climbing into a traditional bathtub difficult or impossible. Medicare may help with the cost of a walk-in tub, even though the tubs are not on the list of “durable medical equipment” that Medicare will cover, including wheelchairs, oxygen equipment, and hospital beds. In order for you to obtain coverage, your doctor would have to attest that a walk-in tub is an absolute medical necessity. Medicare wouldn’t provide assistance upfront — after you buy the tub, you’d submit the bill for possible reimbursement. But there’s no guarantee that you’ll get your money back.
Medicare Plan G coverage is very similar to Plan F, which is no longer available for people new to Medicare on or after January 1, 2020. Plan G offers great value for beneficiaries willing to pay a small annual deductible. After that, Plan G provides full coverage for all of the gaps in Medicare. It pays for your Medicare Part A hospital deductible, copays, and coinsurance. It also covers the 20% that Medicare Part B doesn’t cover. Doctors and other healthcare providers must accept a Medigap Plan G if they accept Original Medicare. Plan G policies can be used across the U.S. since they do not have network limitations, and the premium costs can be very reasonable for the coverage you receive.
What Medical Services Does Plan G Cover?
Medicare Supplement Plan G covers your percentage of any medical benefit that Original Medicare covers, except for the outpatient deductible. So, it helps to pay for inpatient hospital costs, such as the first three pints of blood, skilled nursing facility care, and hospice care. It also covers outpatient medical services such as doctor visits, lab work, diabetes supplies, cancer treatment, durable medical equipment, x-rays, ambulance, surgeries, and much more. This means Plan G covers the coverage gaps with Original Medicare, and all Plan G products must provide you with the exact same coverage.
Medicare pays first, then Plan G pays the remaining amount after you pay the once-annual deductible. In addition, Plan G Medicare Supplements offer up to $50,000 in foreign travel emergency benefits (up to plan limits).
Medigap Plan G: A Small Deductible = Big Savings
Medicare Plan G, also called Medigap Plan G, is an increasingly popular Supplement for several reasons.
First, Plan G covers each of the gaps in Medicare except for the annual Part B deductible. This deductible is only $233 in 2022. In fact, if you have a Plan F that has been in place for years, we can probably help you on premiums by looking at Plan G. When we help you shop rates at Boomer Benefits, we can often find a Supplement Plan G that saves quite a bit in premiums over Plan F, usually substantially more than the $233 deductible that you’ll pay out. You pocket the difference.
Second, it has great coverage. For hospital stays, it covers all your hospital expenses. Most importantly, it pays the hospital deductible, which is over $1,556 in 2022. It also covers the expensive daily copays that you might encounter for a hospital stay that runs longer than 60 days. It provides an additional 365 days in the hospital after your Medicare benefits run out, and it covers your skilled nursing facility co-insurance, too.
Medicare Supplement G usually costs more than Plan N because it covers more. People seem to like the security and peace of mind that a comprehensive policy like Plan G appears to offer and, therefore, are willing to pay the higher premium cost.
Medicare Plan G Case Study: Amazing Coverage
Frank is a diabetic who has Medicare Supplement Plan G. He sees his primary care doctor once per year but visits his endocrinologist several times a year to renew his prescriptions. In January, he goes to his first doctor visit for the year. The specialist bills Medicare, which pays 80% share of the bill except for the $233 outpatient deductible, which is billed to Frank for payment. His Medicare Supplement Plan G pays the rest. Frank’s coverage even provides his lancets, test strips, and a new glucose meter at no charge to him. Medicare and his Supplement work together to pay 100% of the costs for these diabetes supplies.
For the rest of the year, Frank will owe absolutely nothing out of pocket for covered Part A & B services. His Medicare Plan G coverage takes care of the cost-sharing amounts for him. His only copays will be for his medications under his separate Part D prescription drug card. This means he doesn’t have to worry about any more doctor copays. He won’t pay for lab work or imaging. If he has surgery, Medicare will cover 80% of the cost and his Plan G will cover 20%. Plan G is a really great Medigap plan in this respect.
How to Enroll in a Plan G
There are a few different ways to apply for a Medigap Plan G policy. A majority of enrollees will use the Medigap Open Enrollment period to apply for a policy. When you enroll during this window, you will not have to answer health questions on the application and the insurer cannot deny you coverage. It is a six-month window from your Part B effective date. Those who qualify for Medicare before 65 due to disability will have an additional Open Enrollment window when they turn 65.
However, you may need to answer health questions, and your approval is not guaranteed when you are outside that window. So, you could be denied based on certain health conditions. Additionally, the price could change if the insurance company decides to approve you but rate you up.
Some states have exceptions to this rule, such as California and Maine. The state law for both states allows enrollees to change their policy with no health questions from year to year. However, rules will vary with each state as well as the Medicare Supplement insurance company. Residents in these states can take advantage of this exception when the cost of premiums increases each year.
Medigap enrollments are different from Medicare Advantage plan enrollments as you can only apply for an Advantage plan during specific times of the year.
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