Seniors Beware – Medicare Advantage Plans – Part 1

By Stephen J. Silverberg
New York Elder Law Attorney

Seniors who sign up for a Medicare Advantage plan may find themselves in a world of trouble – the complete opposite of what they expected.

Once you turn 65, you are eligible to sign up for health coverage under Medicare. You can choose traditional Medicare (Parts A, B, and D) or Medicare Advantage (Part C).

Traditional Medicare is administered by the federal government while Medicare Advantage allows insurance companies to manage their policies. The insurance companies spend enormous amounts on marketing Medicare Advantage plans. Ad campaigns focus on how your out-of-pocket spending will be much smaller with an Advantage plan than with original Medicare. Last year, the Center for Medicare and Medicaid Services (CMS – the government agency that administers Medicare and Medicaid) found the television advertising for Medicare Advantage to be misleading and confusing. This year, CMS imposed severe restrictions on how Medicare Advantage plans are marketed.

The better choice is to go with traditional Medicare and purchase a Medigap policy. Here’s why.

With traditional Medicare, you can see any doctor who accepts Medicare, but Medicare Advantage plans limit your healthcare providers to a specific network of hospitals, doctors, and pharmacies. Go out of network, and your costs could skyrocket.

Provider networks for Advantage plans can change from one year to the next. So just when you’ve finally found a doctor you like one year, they can be out of network the following year.

Other benefits heavily marketed to seniors include supplemental benefits, like dental coverage, fitness club benefits, and meal delivery services. But to qualify for some benefits, you need a documented medical condition justifying your ability to receive them. If you have diabetes, for instance, you may qualify for meal delivery services. But if you don’t, you’re paying for something you can’t use.

Most Medicare Advantage programs require prior authorizations for many services. Medicare doesn’t have this requirement. You are paying more for an additional level of stress, which could lead to delayed essential treatment or diagnosis because of this extra step.

What if your local hospital system doesn’t accept your Advantage plan? Many hospital systems are dumping Medicaid Advantage because of high prior authorization denial rates and slow insurer payments. Last year, Mayo Clinic dropped Advantage plans in certain states, and Scripps recently notified patients it’s terminating many Medicare Advantage contracts. The Hospital for Special Surgery and Memorial Sloan Kettering do not participate in Medicare Advantage.

Do your research before you make this critical decision. It could affect not only your wallet but your health.

Reference: The Motley Fool “4 Pitfalls You Might Encounter With a Medicare Advantage Plan”

About the Author
Stephen J. Silverberg is nationally recognized as a leader in the areas of estate planning, estate administration, asset preservation planning, and elder law. He is a past president of the prestigious National Academy of Elder Law Attorneys (NAELA), and a founding member and past president of the New York State chapter of NAELA.