Some Seniors are Seeing Drawbacks in their Medicare Advantage Coverage

Real-life stories frequently emerge about Medicare recipients encountering problems with their Medicare Advantage (MA) plans. KFF Health News in early 2024 reported on a 76-year-old who switched from traditional Medicare to a MA plan because he liked its lower premium and what seemed to be broader coverage and a few other perks. But when he unexpectedly developed malignant melanoma, he found that his Blue Cross MA plan had a limited network of doctors he could use, and he’d have to get preapproval for treatment. Getting care was more difficult than he expected. Traditional Medicare allows beneficiaries to go to nearly any doctor or hospital in the U.S., and in most cases enrollees do not need approval to get services. (KFF also noted that a recent federal study found nearly half of MA plan directories contained inaccurate information on what providers were available.)

When the melanoma patient looked into going back to traditional Medicare, he learned that would be too expensive. In traditional Medicare, enrollees pay a monthly premium and, after reaching a deductible, in most cases are expected to pay 20% of the cost of each nonhospital service or item they use. There is no limit on what that 20% can run to. Enrollees can sign up for supplemental insurance, often called Medigap coverage, but the catch is Medigap insurers can deny coverage to beneficiaries transferring from MA plans or can base their prices on medical underwriting, which can result in rejecting coverage for preexisting conditions (like melanoma) or substantially increasing the insurance plan premium. Only four states prohibit insurers from denying a Medigap policy due to preexisting conditions; Colorado is not one of them.

The patient in the KFF story was left feeling he had few options, none of them good, and he believes people are not understanding what Medicare Advantage is all about. Enrollment in MA plans has grown substantially in the past few decades, with more than half of eligible people, primarily those 65 or older, having signed up with them, usually when they’re quite healthy. The trouble can come when their health changes. One study found that about 50% of MA enrollees left their contract by the end of five years, either switching to another MA plan or going back to traditional Medicare, suggesting widespread “buyer’s remorse.” The federal government does offer specific enrollment periods every year for switching plans. During Medicare’s open enrollment period, from Oct. 15 to Dec. 7, enrollees can switch out of their private MA plans to traditional, government-administered Medicare. MA enrollees can also switch plans or transfer to traditional Medicare during another open enrollment period, from Jan.1 to Mar. 31each year. But KFF notes that a lot of people considering such switching say they’d love to come back to traditional Medicare but either can’t get Medigap coverage anymore or can’t afford it. (Note: KFF Health News is a national newsroom focused on health issues.)