Many people say they enroll in Medicare Advantage–Medicare coverage through private health insurers- thinking it is a lower cost alternative to Traditional Medicare. Certainly, the Medicare Advantage plans want you to think that. But, a new report in the Annals of Internal Medicine by Sungchul Park, Amal Trivedi, and David Meyers shows that people in Medicare Advantage face about the same costs as people in Traditional Medicare; overall, the difference in spending is a wash!!!
The researchers looked at costs for people in Traditional Medicare as compared to costs of people who switched from Traditional Medicare to Medicare Advantage. They found that “[d]ifferences in financial outcomes between beneficiaries who switched from TM to MA and those who stayed with TM were small. Differences in financial burden ranged across outcomes and did not have a consistent pattern.” The findings are particularly significant because people too often assume they will save money in Medicare Advantage and fail to appreciate the challenges they could face getting the care they need from the physicians and hospitals they want to use in Medicare Advantage.
To be clear, there’s no question that if you need few or no health care services, you will have few if any costs in a Medicare Advantage plan. But, you would have few if any costs in Traditional Medicare as well if you did not buy supplemental coverage. The question you should consider when deciding whether to enroll in a Medicare Advantage plan is whether you are willing to trade the cost of supplemental coverage in Traditional Medicare to pick up your out-of-pocket costs for a serious gamble as to whether you will be able to get the care you need at a price you can afford in a Medicare Advantage plan.
There are four big issues facing people in Medicare Advantage that people in Traditional Medicare do not face.
- Even though you are supposed to get the same benefits in Medicare Advantage as in Traditional Medicare, Medicare Advantage plans often inappropriately delay and deny care, forcing you to get prior authorization before receiving services and, sometimes, challenge denials of care your treating physicians say you need. In some cases, your only choice is to pay out of pocket for the full cost of those services.
- Traditional Medicare covers your care from almost any physician or hospital you want to use. Medicare Advantage plans restrict your access to physicians and hospitals, sometimes not covering care in cancer centers of excellence or from top specialists. In some cases, your only choice is to pay out of pocket for the full cost of services from the physicians or hospitals you want to use.
- Traditional Medicare covers your care anywhere in the United States. So, if you are traveling or have a second home or want to receive your care away from home and near a friend or family member, Traditional Medicare will cover it. But, if you are in a Medicare Advantage HMO, it will only cover your care out of your area if it is an emergency. And, if you are in a Medicare Advantage PPO, it will only cover at best 60 percent of the cost of your care out of your area, except in emergencies.
- Some Medicare Advantage plans might meet your needs and others might not. But, the data is not available to let you know which ones are better than others. You should avoid all Medicare Advantage plans that are not five stars, but five star plans could still have high denial, high delay and high mortality rates.
Here’s more from Just Care:
- Issues with network adequacy and prior authorization in Medicare Advantage persist
- Medicare Advantage plans denied two million prior authorization requests in 2021
- If Medicare Advantage can’t offer adequate provider networks and accurate directories, why are they in business?
- OIG finds widespread inappropriate care denials in Medicare Advantage
- What we don’t know about Medicare Advantage
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