Mon, Apr 1, 2019

Some Surprising Risks of Medicare Advantage Plans

Are you considering signing up for a Medicare Advantage plan? A growing number of seniors are choosing these private insurance plans, which typically offer low or zero premiums – and sometimes more services – than traditional Medicare.

While lower costs sound good, there are downsides and risks to Medicare Advantage. You should know what they are and how they might affect you and your healthcare if you decide to enroll.

Medicare Advantage Plans Explained

First, it’s worth understanding just what a Medicare Advantage plan is and how it works. Medicare Advantage is an alternative to traditional Medicare. It is administered by private insurers rather than by the government.

Medicare Advantage plans are typically either health maintenance organizations (HMOs) or preferred provider organizations (PPOs). Both offer hospital and medical coverage (Medicare Part A and Part B). In many cases they also offer prescription drug coverage (Medicare Part D), dental and vision coverage and even gym memberships.

Into the Great Unknown

However, as the Henry J. Kaiser Family Foundation noted in a report titled Medicare Advantage Hospital Networks: How Much Do They Vary?, there is so much variation in the size of hospital networks and the services they offer, depending on the plan, that the whole selection process can become quite confusing. Worse yet, you may not even be able to see the differences between plans when reviewing plan directories – many of which are out of date or contain incorrect information, according to the Kaiser study. And your yearly costs are harder to predict because of the many copays that kick in once you get sick, receive treatment or require hospitalization.

Size Matters

The Kaiser study looked at 409 Medicare Advantage plans in 20 counties. Of those plans, 23% featured what Kaiser defined as broad networks that included 70% or more of the hospitals in the county. Roughly 61% had medium-size networks that included between 30% and 69% of all hospitals in the county. About 14% had what Kaiser characterized as “narrow” networks, with less than 30% of hospitals included, and 2% had “ultra-narrow” networks including less than 10% of hospitals in a given county. Traditional Medicare is likely to give you a wider choice of hospitals (including facilities all over the U.S., not just in your county), but the only way to find out for sure is to check with the hospitals you’d hope to use.

Services Might Matter More

Kaiser found that, in general, size relates to services offered, which can be important if you have a rare or complicated condition. Although some of the plans with narrow networks received good ratings from the Centers for Medicare and Medicaid Services (CMS) for preventive care and customer service, narrow networks tend to exclude hospitals that specialize in treating complicated conditions. Specifically, Kaiser said, 75% of narrow networks excluded National Cancer Institute Cancer Centers, 49% excluded academic medical centers and 21% contained no hospitals with accredited cancer programs.

Costs Can Escalate

What all this means is that if you enroll in a Medicare Advantage plan whose hospital network doesn’t treat your condition, you may have to go “out of network” at great personal expense or, worse yet, avoid treatment altogether. This is why knowing as much as possible about your Medicare Advantage plan, including the size and services offered by the hospital network, is so important to your financial and physical health. Also, there are multiple copays associated with Advantage Plans that could mean thousands of dollars out-of-pocket if you get sick and require hospitalization. These (often hidden) copays can add up fast so be sure to read all the fine print.

It’s on You

Meanwhile, when evaluating a Medicare Advantage plan, you should ask questions when something is unclear. For example, ask how frequently the plan you are considering refers patients out of network for care. Ask about their physician networks, hospital networks, and all their copays. For additional help, contact the State Health Insurance Assistance Program (SHIPS) for your state or call TARCOG at 256- 830-0818.

The Bottom Line

Medicare Advantage plans can be cost effective while providing the care you need. If considering such a plan, be sure to do your homework and stay alert for changes from CMS that will make the comparison of Medicare Advantage plans easier for you.

Finally, it’s worth noting that if you find your Medicare Advantage plan to be inadequate, you can switch to another Advantage plan or to traditional Medicare plus a Supplement during the annual election period that takes place between Oct. 15 and Dec. 7 each year. If you’re in an a Medicare Advantage plan, use that time to review the size of your plan’s hospital network and compare it to other options.

Another option is to choose a Medicare Supplement instead of an Advantage Plan. A part of Original Medicare, Supplements do just what they say, they supplement or pick up the eligible expenses that Medicare does not cover – usually the 20% of costs (Medicare covers approximately 80%). And while your monthly premiums will be more than an Advantage Plan, most seniors feel it’s worth knowing that if you get sick and are hospitalized, you won’t be stuck with a lot of unexpected copays and extra charges. Because even though you may be healthy now, you never know what can happen – so why gamble with your healthcare?

To talk to someone about which Plan is right for you, call Karen at FirstCommunity Medicare Supplement 256-532-2785. Karen is happy to sit down with you, answer all your questions and help you find the best plan – no pressure, no obligation. Call today or stop by their convenient office at 699-A Gallatin Street in Huntsville, Alabama.


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