Medicare Advantage sales people make money when they get you to switch from Original Medicare to a Medicare Advantage plan. That’s what the Medicare Advantage hype is about – making money for insurance companies.
I’m sure you’ve noticed, like I have, that Medicare Advantage pitches are flooding mailboxes and emails, and phone calls are annoyingly increasing. And, there’s television, too. Ad after ad about Medicare Advantage, with annoying infomercials often shown.
It’s so discouraging to see seniors fawning over extra things they can receive from a Medicare Advantage plan, such as eyeglasses, exercise programs, and even no premiums, when they don’t realize they could have trouble with some Medicare Advantage plans.
From Oct. 15 to Dec. 7, in most states, people on Medicare can:
- Switch from Original Medicare to a Medicare Advantage plan or vice versa.
- Join, drop, or switch a Part D prescription drug plan if they’re on Original Medicare.
- Join, drop, or switch to another Medicare Advantage plan with or without drug coverage or add or drop drug coverage.
What is Medicare Advantage?
It combines Original Medicare and a supplemental or medigap policy. The plans are offered by health maintenance organizations, preferred provider organizations, and private fee-for-service companies. Federal payment are received each month for each person to manage Medicare benefits for recipients.
Most Medicare enrollees are happy with their chosen plans, according to a survey conducted by The Harris Poll for NerdWallet, a personal finance website, with 86 percent of Americans with Medicare saying they were satisfied with their current coverage. The satisfaction rate was the same for those with Original Medicare, 87 percent, and those with Medicare Advantage, 87 percent.
Not everyone was confident about their choice, however. Nearly a third with Medicare, 31 percent, were unsure if they chose the right coverage for them.
What are the disadvantages of a Medicare Advantage plan?
- Comparing insurance policies is challenging. Unless seniors are careful, they could end up paying more money for fewer services.
- Seniors may need to change doctors and hospitals.
- Some Medicare Advantage plans don’t offer prescription drug benefits.
- Seniors may have to wait for the next enrollment period to transfer out of the plan if they don’t like it.
- Many members of Congress think giving private companies extra money to manage Medicare recipients’ benefits is too expensive. As a result, Medicare Advantage plans could be changed significantly or eliminated.
- Insurance companies often use high-pressure sales to get seniors to switch to Medicare Advantage plans.
Problems with how Medicare Advantage plans are administered
Compared to Original Medicare, that doesn’t requires prior authorization for most services, almost all enrollees in Medicare Advantage plans, 99 percent, are required to obtain prior authorization for some services. KFF, a health research group, found that in 2023, 6.4 percent of prior authorization requests submitted to Medicare Advantage plans were denied, while just 11.7 percent of such denials were appealed.
Medicare Advantage insurers are intentionally using prior authorization to boost profits by targeting costly yet critical stays in post-acute care facilities, a report by U.S. Senate Permanent Subcommittee on Investigations issued in October 2024 states.
In addition, unlike Original Medicare, which allows beneficiaries to see any provider who participates in Medicare, Medicare Advantage managed care plans use contracted networks as a way of managing costs, according to a report by the Center for Medicare Advocacy, a Medicare advocacy group. Restricted provider networks often lead to problems for Medicare Advantage enrollees accessing necessary care.
Another problem, health insurers give agents and brokers, from whom many beneficiaries seek assistance, strong incentives to steer beneficiaries to Medicare Advantage plans. Also, it’s very difficult for most beneficiaries, once enrolled in Medicare Advantage, to switch to Original Medicare, according to an article in the JAMA.
Another criticism of Medicare Advantage, in the article, is that Medicare spends about 20 percent more for Medicare Advantage enrollees than it would spend if those beneficiaries were enrolled in Original Medicare, a difference that translates into about $84 billion for 2025. Medicare Advantage was supposed to save the federal government money, but it never has.
Other problems I’ve written about in the past include the federal government has sued a number of large insurance companies, including Aetna, Humana, and Kaiser Permanente, for changing diagnosis codes for people with Medicare Advantage plans to increase their payments.
And, of course, persistent ads are a form of high-pressure sales, a red flag that the insurance companies want to hook you before you can figure out the plan that’s best for you. Bait and switch practices also are common.
Finally, Medicare advocates are concerned about the Trump administration intention to privatize Medicare. While about half of Americans have selected Medicare Advantage, which is turning over the administration of their health care to an insurance company, Trump’s Center for Medicare and Medicaid Services could make insurer-run plans the default enrollment option for Medicare.
What to do
Finding a good plan continues to be difficult.
Contact your state insurance commissioner’s office to get in touch with your state’s State Health Insurance Assistance Program, or SHIP, office. It provides free help to Medicare beneficiaries who have questions or issues with their health insurance. You can call a counselor to help you compare policies or to attend a workshop/presentation in your area.
Be sure to get help to compare policies if you’re going to buy a new medigap policy or switch. Medicare Advantage salespersons don’t have your interests at heart. They just want to make a lot more money.
