About half of all Americans that choose additional Medicare coverage will go with an Advantage plan. While these plans work well for many people they are not without their flaws. Today, let’s dive into the top 3 disadvantages of these plans.
Benefits of Advantage Plans
Now before we go into the three downsides of Advantage plans, I think it’s fair to first examine why so many buy these plans for a bit of context.
Low Premiums
First, people like Advantage plans for their low monthly premiums. Many Advantage plans still have no monthly premium, and even the plans that do have a premium usually keep it very low. In many areas, one of the higher premiums you might see for an Advantage plan is around $40–$50 per month. For a lot of people, that low or $0 premium remains one of the biggest incentives.
Perks
Second, many people choose Advantage plans because of the added perks. Advantage plans continue to include things like dental benefits, vision benefits, hearing aid allowances, gym memberships, and other wellness extras. While these perks aren’t usually comprehensive, they are attractive and give the plans strong marketing appeal.
Three Disadvantages of Advantage Plans
Despite these perks and lower premiums, there are some downsides to Advantage plans. Let’s talk about the three main disadvantages. Keep in mind, we’re not trying to steer you away from going with an Advantage plan (they can be a great option for some people), rather, we want you to have all the information so you can make your own choice. Unfortunately, many agents aren’t upfront and honest about the negative side of Advantage plans, so many people purchase the plan without having all the necessary details. We’re here to change that.
Networks
The first downside to Advantage plans is the network system. When you go on a Supplemental plan Medicare is your only network. This means you can go to any doctor, hospital, or healthcare provider who accepts Medicare. Advantage plans are a bit different. With an Advantage plan, you are required to stay within a specific network (either an HMO or PPO network), of doctors and health care providers. While many hospitals and doctors are within one of the Advantage plan networks, not all of them are, so you are limited when it comes to choosing a health care provider.
Now if you choose a PPO Advantage plan, you are allowed to go to a doctor or hospital out of the network, but you will have to pay extra for it.
Pre-Certifications
The second downside to Advantage plans is pre-certifications. These requirements have actually increased in recent years as CMS pushes for more oversight of medical necessity.
Let’s say your doctor says you need a CT scan or a hip or knee replacement. On an Advantage plan, your doctor must get the procedure pre-approved by the insurance company. The insurer may approve it—or they may require you to try additional steps first, like physical therapy, injections, or imaging.
Not everything requires pre-certification. You can still go to your primary care doctor or specialist without prior authorization. But for many non-emergency procedures, surgeries, tests, and even some advanced imaging, the insurance company—not your doctor—has the final say.
These examples remain accurate today:
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A client of ours needed a hip replacement, but her Advantage plan required months of physical therapy first before reconsidering surgery.
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Another client needed an MRI for chronic back pain, but the insurer denied it initially and required several weeks of therapy first.
On a Supplemental plan, none of this exists. There is no pre-certification. If your doctor orders a test or procedure, you get it—no questions asked.
Switching Plans
The third and final disadvantage to Advantage plans is their switching policy. Every year, Medicare has an open enrollment period from October 15th to December 7th. Most people think that during this open enrollment time they can switch to whatever new plan they want without any problems. Unfortunately, this is not true if you’re on an Advantage plan.
Let’s say you’re on an Advantage plan but would like to switch to a Supplemental plan. The problem is, if you’ve been on the Advantage plan for one year or more, you have to be approved by the insurance company to make the switch. You’ll be asked a series of 20 to 25 health questions, the insurance company will need to check all your medications to see what you’re being treated for, and they’ll require a statement from your doctor. Unfortunately, if the underwriter doesn’t qualify you, you won’t be able to switch to a different plan.
Conclusion
As you can see, there are several benefits to getting on an Advantage plan, like added perks and lower monthly premiums, but there are several disadvantages to the plan as well. First, you’ll be limited to which doctors and hospitals you can choose from, you’ll have to get pre-certified to have certain procedures and tests done, and if you want to switch to a Supplemental plan in the future, you’ll have to medically qualify.
If you are interested in learning more about Advantage plans please click here to read our article on how to choose the best one. Instead, if you are now more curious about Supplemental plans we have you covered. Simply click here to learn more about Supplemental Plans.
As always, if you would like some free assistance in choosing the right option for you our Medicare School Guides would love to help. They help people each day decide which option is best and can even help you enroll right over the phone. Find a time to speak with a Guide today, or give us a call at (800) 864-8890.