The Darker Side of Medicare Advantage Plans

Q. Last year, during the Medicare Open Enrollment Period, my wife and I saw a commercial on television for a Medicare Advantage (MA) plan that sounded almost too good to be true. The company seemed reputable, so we took the claims for better prices and a wider range of services at face value and quickly decided to switch to that plan. Boy, were we surprised! We’ve come to realize that people may get the care they need with a MA plan, but not always with the doctors or in the facilities they want. We also realized not to listen to those commercials on TV! I thought that last year, the ads for MA were being better regulated. Perhaps more needs to be done! I’m wondering if we can get out of the plan we chose and switch back to Original Medicare. Thanks for your help and for the information that you provide!

A. First off, let’s get some basic definitions in place. When most Americans turn 65, they sign up for Medicare, called Original Medicare. At that time, they also choose a Medicare Supplement plan, which is either a brand-new policy they select or their prior private or group health insurance policy, which at that point becomes a supplemental policy to Original Medicare. When you turn 65 and apply for a Medicare Supplement plan, no plan can deny you coverage because of preexisting conditions. This is critical to understand, which I will explain in a moment.

The alternative to “Original Medicare with a Medicare Supplement policy” is  called a “Medicare Advantage” plan, which is a private insurance plan that theoretically combines the benefits of “Original Medicare along with a Medicare Supplement policy.” However, don’t let the word “advantage” in Medicare Advantage fool you. As this article will explain, these so-called Medicare Advantage plans rarely offer a true “advantage” over Original Medicare with a Medicare Supplement plan. And as I will discuss more below, if you ever try to switch back from a Medicare Advantage plan to Original Medicare, you can be denied because of preexisting conditions.

As of 2023, more than half of seniors were enrolled in Medicare Advantage plans. Similar to your situation, the plans hid some serious problems that the enrollees learned about later on, after signing up for them.

The Kaiser Family Foundation (KFF) reported that there were 9,500 daily ads for Medicare Advantage (MA) during last year’s open enrollment period. No wonder you could see them on almost every channel! And a survey by the Commonwealth Fund discovered that 30 percent of seniors received seven or more phone calls from MA salespeople for the 2024 coverage period alone! And with all of this marketing, you are not alone in your complaint! According to a Senate Finance Committee report by US Senator Ron Wyden, customer complaints about Medicare Advantage’s marketing skyrocketed to double, bringing the total to 41,000.

Last year, the Centers for Medicare & Medicaid Services (CMS) Approved a New Rule that Medicare Advantage Companies Had to Modify their Ads

Medicare Advantage (MA) plans are a privatized version of the federal Medicare program that American employees pay into during their career and typically sign up for at age 65, called Original Medicare. These so-called Medicare Advantage plans were unfortunately poorly named when the federal government first decided what to call them, because they definitely do not always offer an “advantage” over original Medicare, so the basic names of these plans are inherently misleading. Taking “advantage” of their misleading label, MA plans routinely tout their alleged “advantages” over Original Medicare. MA plans routinely advertise that they allow seniors to pay lower premiums and get better benefits than Original Medicare, such as adding vision and dental coverage on top of basic health care benefits. But what many seniors don’t realize is that there are almost always hidden downsides of MA plans, such as higher out-of-pocket payments for treatments and a limited number of doctors, hospitals, and rehab/nursing facilities that accept the MA plan.

As you mentioned, last year CMS issued new rules on MA marketing, but so far it is unclear if this is impacting what seniors are being told when marketers call and how seniors are choosing between various coverage options.

In a move intended to protect consumers from being persuaded by potentially misleading marketing practices, the rules issued last year by CMS were designed to govern how MA insurers advertise their plans. These changes were enacted to protect beneficiaries from confusing advertising and from receiving unwanted and ongoing contacts from marketers. The reason for the new rule was that many of the consumers who signed up for an MA plan believed the promises made in the ads and did so without a full understanding of the implications of their decision, and many of these consumers signed up for a plan that was not suitable for their needs.

Current rules for third-party marketing organizations stipulate they must record calls and offer standard disclaimers. Agents who speak to many customers at educational meetings are also barred from setting up Medicare sales appointments immediately after. Despite the new rules, seniors are still being misled by the claims of MA companies. These are some of the issues seniors are still experiencing:

  • A growing number of Americans are finding insufficient coverage means overall significantly higher medical bills after signing up for MA.
  • MA companies don’t always explain that for some, opting for these plans will make your treatment much farther away and not with a doctor of your choice.
  • Those with MA who need expensive medical care often have to wait for “prior authorization” approval from the insurance company, which adds time and often other difficult obstacles to getting necessary health care, such as needed procedures and surgery, something the marketers of course typically don’t mention.
  • One in five seniors reported issues getting care due to the “prior authorization” requirement, according to a recent Retirement Living study. Another study found half of MA participants switched to a different MA plan after five years.
  • Medicare Advantage plans are so complicated that most individuals, when it comes time to enroll, find it very difficult if not impossible to select the appropriate plan for their needs, so unfortunately they rely on shady marketing tactics when making this extremely important decision.
  • More than half of seniors feel that they are “stuck” in Medicare Advantage plans. They were not aware before signing up or don’t even know when they have signed up for Medicare Advantage. “A lot of the complaints we have heard come from clients who were called on the phone and convinced into enrolling whether knowingly or unknowingly,” said Chris Fong, an insurance specialist.

Seniors Aren’t Necessarily “Stuck” with Their Medicare Advantage Plan — How to Protect Yourself

MA plans are undoubtedly not the right choice for everyone. Before you commit to anything, you should compare plans and find out if your doctors will remain in your network. You may get free dental and a gym pass with your MA plan, but among some of the real issues are denial for expensive care and doctors, hospitals, and rehabilitation facilities that are far away and often subpar. If you’re unsure about some of the information you received from a Medicare Advantage sales person, you can call 1-800-MEDICARE for more assistance, or work with an experienced and independent health insurance agent who sells both Medicare Advantage plans and Medicare Supplement plans, which are very different. An experienced and independent health insurance agent can explain to you the differences between Original Medicare combined with a Medicare Supplement policy (sometimes called a Medigap policy) and any MA plans that you might be looking at.

The open enrollment period for Original Medicare was from October 15 to December 8, but there’s another enrollment period from January 1 to March 31 for anyone unhappy with their Medicare Advantage plan who wants to switch to a different MA plan or revert to Original Medicare.

If You Have Medicare Advantage, Consider Switching Back to Original Medicare ASAP — While You Are Still Healthy!

As you can see, you can switch from an MA plan back to Original Medicare plus a Medicare Supplement plan, but it can be difficult because in order to get a Medicare Supplement plan after being enrolled in an MA plan, you must still be relatively healthy because in order to get a good Medicare Supplement plan after being on an MA plan, you must pass through a medical underwriting process, and you can be completely denied because of one or more preexisting medical conditions. This is the little known “gotcha” when switching from Original Medicare with a Medicare Supplement plan to an MA plan, because by the time many people realize they should have stuck with Original Medicare with a Medicare Supplement plan, they are too unhealthy to qualify for a Medicare Supplement plan, and therefore they are stuck with their MA coverage, although they are still free to switch from one MA plan to another MA plan without risking a denial for preexisting conditions.

If you do switch from an MA plan back to Original Medicare with a Medicare Supplement, your coverage under Original Medicare will begin January 1 of the following year. You can also make this change during the Medicare Advantage Open Enrollment period, which runs from January 1 through March 31. If you make this change, be sure to also sign up for a Medicare Part D stand-alone prescription drug plan (PDP), unless you have creditable drug coverage from another source. If you do not, and you decide to sign up for Part D PDP coverage later on, you may face a penalty for late enrollment.

The best time to buy a Medicare Supplement policy is during your initial six-month Medigap Open Enrollment Period. You generally will get better prices and more choices among policies. During that time, you can buy any Medicare Supplement (Medigap) policy sold in your state, even if you have health problems and one or more preexisting medical conditions. This period automatically starts the first month you have Medicare Part B and you’re 65 or older. It can’t be changed or repeated. After this initial enrollment period, you may not be healthy enough to purchase a Medicare Supplement policy at all or, if you’re able to buy one, it may cost much more due to past or present health problems.

Therefore, you should contact a few Medicare Supplement insurers directly to ensure you’ll be able to purchase a Medicare Supplement policy if you’re thinking of switching back to Original Medicare. Or, to make your life much easier, work with an experienced Medicare health insurance agent who can help you shop for a Medicare Supplement policy, and help you get the best possible policy at the least possible cost.

At the Farr Law Firm, we work with Retirement & Medicare Together to serve the Medicare needs of our clients. If you are turning 65 and getting ready to enroll in Medicare, please reach out to them or another experienced and independent Medicare insurance agent. In addition, if you or a loved one have not yet done Incapacity Planning, Estate Planning, or Long-Term Care Planning, please contact us:

Northern Virginia Medicare Planning: 703-691-1888
Fredericksburg, Medicare Planning: 540-479-1435
Rockville, MD Medicare Planning: 301-519-8041
Washington, DC Medicare Planning: 202-587-2797

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About Evan H Farr, CELA, CAP

Evan H. Farr is a 4-time Best-Selling author in the field of Elder Law and Estate Planning. In addition to being one of approximately 500 Certified Elder Law Attorneys in the Country, Evan is one of approximately 100 members of the Council of Advanced Practitioners of the National Academy of Elder Law Attorneys and is a Charter Member of the Academy of Special Needs Planners.

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