Medicare Advantage plans have significant downsides:

After 45+ years of selling and working in health insurance, I can tell you that the one thing all people age 65 and over want, is to be able to go to sleep at night not worrying about their health coverage.  This is why I will only sell Medigap/ Medicare Supplements.  Medicare Supplement plans provide greater flexibility, stability, and value for you than the heavily promoted Medicare Advantage insurance plans.  Below are some of my reasons why I won’t sell MA Plans.

(This information is from Kiplinger Retirement/Financiall magazine, Journal of Internal General Medicine, and Bob’s own experience.)

Medicare Advantage plans (MA Plans) are Medicare approved plans from private insurance companies that offer an alternative to Original Medicare for your health and drug coverage. These “bundled” plans include Part A, Part B, and usually Part D. They can be HMO’s, PPO’s or fee for service plans. The US Government/ Medicare pays a fixed amount for your care every month to the companies offering Medicare Advantage Plans.

Higher costs for taxpayers. By one estimate, taxpayers pay 22% more per Medicare Advantage enrollee than the cost of traditional Medicare.  Who Knows if DOGE will be looking into this situation, but at this time, insurance companies are making huge margins on this program. Another note, insurance brokers are paid higher commissions on MA Plans by 3 or 4 times that of a Medicare Supplement.  This is a big reason why the insurance companies and the brokerage community heavily promote Medicare Advantage plans over the standard Medicare Supplement plans.

Provider network drawbacks. MA has limited provider networks that can change, sometimes leaving beneficiaries unable to keep their doctors. This is especially true as health care systems around the country increasingly stop accepting MA insurance contracts. Also, MA plans can only be sold in specific counties. So, if you move to an unapproved county, or out of state, you may need to change from MA to a Medigap/ Medicare Supplement policy to continue to receive coverage.  Patients with traditional Medicare face no such limitations and can use any doctor who accepts Medicare.

Preapprovals and denials. MAs increasingly require that some kinds of care be pre-approved. This process, a U.S. Senate report concluded, “has become not just a bureaucratic maze, but a potential threat to [beneficiaries’] health.”  These plans have been accused of denying medically appropriate services, particularly rehabilitation after hospitalization. The Senate report noted that some insurers’ denials of coverage surged as companies increased their use of artificial intelligence tools.

The hard sell. Aggressive MA marketing practices may mislead beneficiaries, who then believe they can get plan extras advertised in their areas, only to find the extras unavailable.  “Medicare Advantage was created, ostensibly, to improve costs, choice and the quality of care,” three authors wrote in the Journal of Internal General Medicine. “However, hearings and reports suggest that many MA plans may be falling short on all three metrics.”

The Medigap trap. If you have had a Medicare Advantage plan for over a year and want original Medicare and a Medigap/ Medicare Supplement policy instead, you may face the Medigap trap. In most states, Medigap/ Medicare Supplement plans are available only in the first six months after you become eligible for Medicare. After that, plans may require a health screening. You may be denied coverage or be charged higher rates if you have significant health problems or pre-existing conditions.  Luckily, Blue Cross Blue Shield of Illinois’ current underwriting practice is to have all their Medicare Supplements be “Guarantee Issue” with no medical questions and cover all “Pre-existing Conditions” from day one.  We have no problems at this time in Illinois, but other states may not have this type of underwriting guideline, so… if you move and want to go back to original Medicare and a Medigap/ Medicare Supplement policy in other states, you may be out of luck.