Open Enrollment 2022: Disadvantages of Medicare Advantage Plans

Would you switch to a type of insurance known to offer less care, lower quality care, and worse healthcare outcomes? Nearly half of seniors do. Every year, from October 15 to December 7, people with Medicare have the option to switch plans. Unfortunately, many people realize too late that switching to a Medicare Advantage plan (such as Humana, United, or Aetna) means they are no longer in original / traditional Medicare. Moreover, people often do not realize what they are giving up through this switch. Medicare Advantage plans come from commercial insurance companies with marketing departments, advertising agencies, and legions of salespeople to promote their product. Original Medicare, on the other hand, rarely promotes itself – dedicating all its revenue to patient benefits and administration. To help level the information playing field, let’s take a moment to learn what Medicare Advantage plans really are and their disadvantages.

Medicare Advantage Plans Take Away Your Traditional Medicare Benefits

Many people confuse Medicare Advantage plans with Medicare Supplement plans. To the contrary, Medicare Advantage Plans do much more than Medicare Supplement insurance. Medicare Advantage Plans are arrangements where commercial insurance companies take over your Medicare benefits and repackage them. Insurance companies such as Humana, United, and Aetna sell Medicare Advantage Plans. When seniors agree to Medicare Advantage plans, they no longer have their traditional Medicare benefits. They have the repackaged benefits from the insurance company instead. Moreover, seniors who switch, cannot switch back for a year.

Disadvantages of Medicare Advantage Plans

People who move to Medicare Advantage plans often enjoy lower, day-to-day, out-of-pocket expenses, but the trade-off may occur when they become really sick. Patients in Medicare Advantage plans characteristically receive less care, fewer options, and lower quality care. An analysis by Stanford economists was published in the American Economic Journal. It finds that Medicare Advantage plans send 30% of revenue to internal expenses such as executive salaries and shareholder profits, while spending 33% less on patient care. Seniors with a Medicare Advantage plan:

• Are sent straight home from the hospital, without nursing home or rehab facility care, much more often.
• Receive fewer days in the hospital after surgery.
• Must have surgeries as outpatient procedures more often.
• Have fewer choices in home health agencies and other healthcare providers.
• Are less likely to receive home health or hospice care when they are very ill.
• Are more likely to receive home health from an agency ranked as low-quality by Medicare.
• Find themselves in low-quality skilled nursing facilities more often.
• Prove less likely to receive care from specialists.
• End up in emergency departments much more often, which is a sign of lower quality care.
• Are less likely to have in-network benefits in all states and territories.

Original Medicare Offers Fewer Surprises

Investopedia’s Lita Epstein writes, “The most comprehensive coverage, which will likely result in the fewest unexpected out-of-pocket expenses, is a traditional Medicare plan paired with a Medigap policy.”

To switch to a Medicare Advantage plan, call the insurance company of your choice. To switch to original Medicare, call 1-800-MEDICARE.

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