Unraveling The Complexities of Medicare Advantage Plans

Hello and Welcome to Medicare School Daily! Today’s post will explore the three key reasons why I am personally hesitant to select an Advantage Plan for my Medicare coverage, which I am due to start in just three years. Surprisingly, my findings suggest that an Advantage Plan may not suit everyone due to its specific limitations and restrictions. However, by using this post as a guide, you can determine which plan is the most suitable for your needs.

Is An Advantage Plan A Good Option?

There’s no denying that Advantage Plans are suitable option for some Americans. In fact, it has proven to be an excellent choice for many, and my team and I have successfully assisted hundreds of people each month in finding the perfect Advantage Plan to suit their needs. What I am about to discuss, however, are three areas that might raise some concerns for individuals considering this option.

1. The Network Challenge

The first reason that an Advantage Plan could pose a problem is its inherent dependency on networks. Every Advantage Plan, whether it’s an HMO (Health Maintenance Organization) or PPO (Preferred Provider Organization), comes with its own network that you must use in order to access care.

HMOs: A Compact Network

The HMO network is frequently depicted with a small box diagram, indicating fewer options for doctors, hospitals, and healthcare providers willing to accommodate HMO patients.

PPOs: A Broad Spectrum

Contrarily, the PPO depiction uses a larger box due to its wider network of options. This is because PPO networks tend to provide better pay to their providers, encouraging more doctors to participate.

Now, here is where the problem presents itself. Networks carry with them restrictions, limitations, and rules. For instance, those on an HMO network cannot seek care outside their network. If they do, they bear 100% of the out-of-pocket costs, as HMO coverage does not extend beyond its network.

PPOs offer a bit more leniency, allowing visits outside the network, but at a significantly higher cost. For instance, remaining within the PPO network may cost someone $5,000 per year, whereas seeking care outside the network could rise up to $10,000 per year.

For individuals who prioritize freedom of choice above all else, network restrictions might not be worth it.

Avoiding the Network Issue with Medicare A, B, and Supplemental Plans

Fortunately, by opting for A and B Medicare supplemented with a Medigap plan, you free yourself from network limitations. Once you identify a provider that accepts Medicare, you can visit them free from any geographical restrictions.

Now,

“You don’t have to ask them, ‘Do you accept my supplemental plan?’ You simply have to ask, ‘Do you accept Medicare A and B?'”

If a provider accepts Medicare, you can rest assured they will also accept your supplemental Medigap plan.

2. Preauthorization Predicament

The second issue with Advantage Plans lies in pre-authorizations – an industry term indicating the necessity for insurance approval before a procedure can occur. Around 72% of medical services require preauthorization. This includes procedures like MRIs, CAT scans, hospital admissions, outpatient surgeries, etc.

In such a situation, your doctor, doesn’t necessarily have the final say. The insurance company holding the Advantage Plan reserves the final decision, often resulting in alternative treatment recommendations or direct denial.

Here’s a classic case study for reference:

“A lady needed a full hip replacement on an Advantage Plan, and it had to be approved, of course. The Advantage Plan decided against a full replacement, recommending a rod insertion into the hip instead. Despite her doctor’s professional advice, she was only able to get the rod as it was the only procedure approved by the insurance company.”

Another advantage of combining Medicare A, B, and Medigap plans is that you are not subject to pre-authorization requirements. This means that your healthcare provider has the final say in determining your treatment, rather than your insurance company. By choosing this combination, you have more control over your healthcare decisions and can receive the treatment that is best for you according to your physician.

3. Is the Advantage Plan Permanent?

The third issue arises around the permanency of Advantage Plans. It may come as a surprise, but there are situations where a Medicare Advantage Plan has the potential to become your lifelong healthcare plan.

 

When you first sign up for Medicare at age 65, you are allowed to try out an advantage plan for year. During this 12-month trial period, also know as a Trial Right, you can make the switch to a supplemental policy at any time without being subject to medical underwriting. However, once you cross the 12-month trial period with your Advantage Plan, rules change. Now, in order to make the switch to a Supplemental Plan, you will need to do so within the designated Open Enrollment Period, which runs from October 15th to December 7th. It’s important to note that during this time, you will be required to undergo medical underwriting.

Underwriting, as you may recall, involves an investigative process where you are asked approximately 30 or so questions related to your health history, medications, doctors’ statements and more. If you pass underwriting, your switch to a Supplemental Plan will be effective in the following year. However, if you face any health-related issues, the insurance company might deny your application for coverage. This could mean that your Advantage Plan becomes a permanent policy that you must rely on to access your healthcare.

Please note, there are some exceptions to how this Trial Right functions based on state-specific rules and timeframes when you first started Medicare.

Don’t forget, there another window where underwriting can’t be used to denied your coverage known as the Medigap Open Enrollment Period. This six-month period provides you with the opportunity to easily switch between plans or apply for a new one, all without the worry of being denied coverage. It begins as soon as your Part B becomes effective and is widely regarded as the most convenient and stress-free time to enroll in a supplemental policy.

Conclusion

Choosing a healthcare plan is a decision that can shape your life. The idea of being tied down by networks, restrictions, and endless rules may not be appealing to everyone. While an Advantage Plan comes with its own set of regulations, including pre-authorizations and a potential lifelong commitment, it may still be the preferred option for some individuals. It’s up to you to make an informed decision, but we’ll be here by your side to guide you step-by-step.

Thank you for investing your time in one of our more lengthier posts! We hope these resources help you better understand all of the options available to you. Stay tuned for more helpful insights into the world of Medicare, coming your way soon!