Beware of Medicare Advantage’s disadvantages
During the annual Medicare open enrollment period (Oct. 15-Dec. 7), senior Americans are inundated with advertisements, phone calls and other gimmicks to persuade them to enroll in a Medicare Advantage plan rather than traditional Medicare. Those ad campaigns apparently work: The market share of Medicare Advantage plans has increased from 13% in 2004 to more than 50% in 2023.
But many U.S. seniors may not understand what they’re signing up for.
Traditional Medicare is the U.S. government’s not-forprofit health care plan for people 65 and older, or who have disabilities. Medicare Advantage plans are operated by for-profit private insurance companies.
For healthy individuals, the choice doesn’t make much difference. But most Americans will encounter serious illnesses as they age: Most over the age of 65 have at least one chronic condition, and more than 80% have two or more.
For people with serious medical problems, we believe traditional Medicare is far better.
The most important attribute of traditional Medicare is its wide network. It is accepted by the vast majority of U.S. hospitals and providers, and patients can choose anyone that accepts it. This gives individuals flexibility and access to the best experts and treatments. It includes coverage of a wide range of health care services (hospital stays, clinic visits, diagnostic tests and prescription drugs).
For the best chance of survival, many cancers and other serious medical conditions require immediate transfer to specialized centers with high expertise and optimal infrastructures. However, once patients are stabilized, if they are out of their insurance covered network, they are
often required to transfer to the care of the contracted networks and physicians.
We find this process to be potentially harmful: Care is interrupted and often delayed; patients and physicians are confused; and it is frequently difficult to find innetwork experts and facilities with the expertise and willingness to take over care. Thus, in situations of lifethreatening medical conditions, cancer, and specialized procedures where expertise is particularly important, traditional Medicare is a far better choice. Equally important is that there are no bureaucratic delays in care: Traditional Medicare does not require pre-approval of every hospital stay, procedure or medication.
So what attracts senior Americans to Medicare Advantage plans, other than the ads and the word “Advantage”?
As long as individuals are healthy, the plans do, in fact, offer advantages: lower premiums; coverage for dental, vision and hearing; and automatic enrollment in Medicare Part D (prescription drug benefits). Many Medicare Advantage plans offer lower deductibles and co-pays.
But once patients are sick, a Medicare Advantage plan turns into a Medicare disadvantage. That’s how for-profit organizations can promise to do more while being paid less.
What are those disadvantages? Their networks of health care providers are narrow. Particularly in nonurban areas, that may force patients to travel long distances. Equally important, the available facilities may not have the infrastructure or expertise to handle the illness, be it cancer, a chronic condition, a rare disease or an ailment that requires highly specialized procedures or investigational therapies.
Another serious issue is the requirement for repeated pre-approvals of procedures, visits or treatments. Delays for such authorizations can take weeks. Denials are frequent and must be appealed, causing potentially harmful delays in patient care, treatment interruptions, and worse overall outcomes.
These processes often involve peer reviews by the insurer’s staff (possibly financially incentivizing them to deny care). Over a period of two months Cigna denied more than 300,000 claims through an algorithm that allowed their doctors to spend an average of only 1.2 seconds reviewing each case.
Also, Medicare Advantage contracts can change from year to year. Patients can be forced to change physicians or relocate to different facilities. They may find that a medication they take is no longer covered.
After the Centers for Medicare and Medicaid Services reported that complaints against Medicare Advantage had more than doubled between 2020 and 2021, the U.S. Senate Finance Committee launched an inquiry. It found that Medicare Advantage plans are sold through widespread marketing scams, aggressive tactics, and false and misleading information. So keep your eyes open, and resist the hard sell.
Traditional Medicare (plus buying coverage for hearing, vision, dental, drug plan Part D and additional MediGap coverage) offers broader networks, access to the best experts, prompt care not encumbered by pre-approvals and denials, and stable networks and physicians.
Choosing traditional Medicare may be more expensive in the short run, but it’s ultimately a better value.