3 Major Medicare Advantage Plan Flaws Retirees Should Know About

Once you retire, you may find that healthcare is one of your biggest ongoing expenses. And it’s important to do what you can to keep your costs down.

Part of that means choosing your Medicare coverage carefully. And to that end, you have options.

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You could stick with original Medicare, which includes Part A hospital coverage and Part B outpatient coverage. If you go this route, you’ll need a Part D drug plan as well.

Another option to look at is Medicare Advantage. With a Medicare Advantage plan, you typically get all-in-one coverage, including prescriptions — and sometimes much more.

One benefit of Medicare Advantage plans is that they commonly offer coverage beyond what original Medicare offers. Original Medicare, for example, won’t pay for dental care, eye exams, and hearing aids, but Medicare Advantage plans often cover these services.

Another huge Medicare Advantage perk is that these plans cap your annual out-of-pocket spending. Many retirees are limited to a fixed income that consists largely of Social Security. Having a limit on annual spending makes it easy to stretch that income.

But if you’re interested in signing up for a Medicare Advantage plan, you should know that there are some pitfalls you may encounter. Here are three major Medicare Advantage drawbacks all retirees need to be aware of.

1. Limited provider networks

When you enroll in original Medicare, you can generally see any provider in the country that takes Medicare. One of the biggest differences between original Medicare and Medicare Advantage is that with the latter, you’re generally limited to a specific provider network.

Going outside of your plan’s network could mean facing huge costs. But limiting yourself to that network could mean not getting to see the providers you know and trust. It could also mean running into issues when you travel or spend a substantial amount of time in a different part of the country than your regular ZIP code.

2. Coverage denials

Many retirees are drawn to Medicare Advantage plans not just for the wider scope of coverage and caps on out-of-pocket costs, but the low premiums. Many Medicare Advantage plans even have a $0 premium, which can be enticing, as it sometimes means getting expanded coverage at no extra cost up front.

The problem is that it’s common for Medicare Advantage plans to require prior authorization for a number of tests and procedures. That could lead to delays in care, as well as flat-out denials.

3. Difficulty getting Medicap if you want to make a switch

If you’re interested in signing up for a Medicare Advantage plan, you may be inclined to give one a chance thinking you can always switch over to original Medicare if you end up unhappy. What you may not realize is that by moving off of a Medicare Advantage plan and onto original Medicare, you may have trouble getting an affordable Medigap plan.

Medigap is supplemental insurance that’s compatible with original Medicare. It’s not compatible with Medicare Advantage, though.

If you enroll in Medicare Advantage and make a switch to original Medicare after the fact, you may be beyond your initial six-month Medigap enrollment period, which begins the month you turn 65 and are enrolled in Part B. This means that you may be denied Medigap coverage due to a pre-existing condition. And even if you are able to get coverage, you might pay a lot more for it.

There are plenty of good reasons to look at getting a Medicare Advantage plan. But before you sign up, make sure to familiarize yourself with some of the pitfalls involved. Having the right information could help you make a savvy decision — one that works to your financial benefit at a time in life when that’s so important.

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