Hidden Costs in Medicare Advantage Plans

Medicare Part C, also known as Medicare Advantage , is a popular alternative to Original Medicare that comes with additional coverage options.

While the benefits of Medicare Advantage plans may sound great at first glance, there are some trade-offs (like with any other plan!) and potential hidden costs baked into them that can surprise beneficiaries. Let’s go through them together.

Advantages & Disadvantages of Medicare Advantage Before we break down the details around costs and coverage, it’s important to look at the bigger picture, or the general advantages and disadvantages of Medicare Advantage.

Enrolling in a Medicare plan can be a complicated process, especially without the help of tools like Healthpilot —that’s why we’re here to help you understand the Medicare ecosystem, so you can feel supported and confident every step of the way.

Advantages of Medicare Advantage Let’s start off by reviewing why Medicare Advantage can be the best fit for individuals depending on their situation:

Medicare Advantage combines Medicare Part A , Part B , and typically Part D all into one plan, giving more coverage than other Medicare plans. Many Medicare Advantage plans offer additional coverage . Out-of-pocket costs are capped under Medicare Advantage (unlike Original Medicare). Some Medicare Advantage plans offer lower premiums and competitive cost structures for individuals who qualify based on their overall health. Disadvantages of Medicare Advantage Like we mentioned, Medicare Advantage comes with its own set of tradeoffs, but understanding these now is the best thing you can do to ensure that you’re fully covered when the time comes to make a decision:

Medicare Advantage plans are HMOs or PPOs with network restrictions. This means higher out-of-pocket costs for services outside of said narrow network. Coverage denial or delays can happen due to slowed preauthorization. Top hospitals and cancer centers can be harder to access . Hidden Costs in Medicare Advantage Plans

Now that we’ve covered the general pros and cons of Medicare Advantage, let’s go a step deeper and review the common hidden costs associated with the plan type:

As we covered above, higher fees, or even full cost , might be incurred if the care you’re seeking is out of Medicare Advantage’s limited network. Certain services and procedures require prior authorization , which can delay treatment, and in some instances, result in a complete denial. This can leave you with responsibility for out-of-pocket costs, or having to forgo a service entirely. Medicare Advantage’s prescription drug plan has tiers . If a prescription you rely on falls into a higher tier, or isn’t covered at all, it drives up the monthly cost of your entire plan. While having the option to add extra coverage is advertised as “included”, there are a variety of limitations placed on additional benefit components in the form of additional fees, even narrower networks, and annual maximums. Skilled nursing and hospital stays are covered due to Medicare Advantage including Medicare Part A coverage, however, there is a limit; some plans charge a daily copay after a set number of days . When compared to Original Medicare, you may end up paying more for procedures like MRIs, physical therapy, or outpatient surgery due to higher coinsurance—costs that can go overlooked until the physical bill arrives at your home. What Do Doctors Think About Medicare Advantage? It’s also worth noting doctors’ perspectives on Medicare Advantage plans. Some physicians have had different experiences with it, reporting challenges like:

Administrative hurdles caused by prior authorization clauses can delay patient care or decrease its quality. Network size may limit patients’ ability to see the doctor they need to see . This causes problems when doctors need to care for long-standing patients or referrals. In some cases, doctors may feel they are not able to recommend the care that patients truly need due to cost concerns for the patient. This forms a barrier to treatment that can be incredibly serious depending on the problem at hand. Why Would I Enroll in Medicare Advantage? At this point, you may be wondering if the tradeoffs exist, why do Americans still choose Medicare Advantage?

The fact of the matter is, finding the right Medicare fit is highly personalized based on individual medical needs and budgets, and Medicare Advantage exists as part of that ecosystem for a reason. Millions of people choose Medicare Advantage every year— 32.8 million in 2024 , to be exact.

Enrolling in Medicare is less about finding “the best plan out there” and more about finding the right plan for you. Medicare Advantage is just one choice that tends to be a great option for individuals who:

Are generally healthy and don’t need to see specialists often . Those who aren’t affected by chronic conditions or seldom see specialists, the network restrictions won’t pose as much of a problem for you. You effectively lower your monthly costs without compromising on which doctors you can and cannot see. Value fitness perks and other wellness benefits . Whether it be a gym membership, bi-yearly dental cleanings, or new glasses, some Medicare Advantage plans offer a host of non-medical benefits that aren’t covered at all by Original Medicare. Need predictable costs or have budget restrictions . Between low to $0 premiums and clear annual out-of-pocket maximums, Medicare Advantage is a great choice for those who want a clear picture of their healthcare costs. Bonus Tip : If this sounds like you, be sure to review and compare copays and deductibles to avoid any hidden costs. Using a tool like Healthpilot can make this easier! Enjoy the care coordination that comes with Medicare Advantage . Medicare Advantage HMOs require individuals to have a primary care physician (PCP), which results in a team-based approach to healthcare that some might find incredibly appealing. Your PCP manages referrals, prescriptions, and follow-ups. This can be very helpful for some people who find they need additional support to manage their health. Rely on local care and don’t travel often . Medicare Advantage is based on regional provider networks, meaning it works best for people who prefer to get their care close to home. How Healthpilot Helps You Compare True Costs The most important part to remember is that Medicare Advantage shouldn’t be treated as a one-size-fits-all solution. While it might work for one person, it may not be ideal for another. This is why personalized support matters so much in healthcare as it augments the plans individuals are relying on.

Trying to find your best fit plan can feel complicated, especially as you’re weighing options, costs, and coverage opportunities. But the good news is, you don’t have to navigate any of this alone—Healthpilot is here to help.

We’ve worked hard to develop a tool that acts as a one-stop shop for all things Medicare:

Our blog gives you vital information about Medicare, including annual changes to plans, definitions of key terms, and other insights. We offer a Medicare plan finder tool that, using information specific to you, like doctors and prescriptions, allows you to compare plans with real costs, not hypotheticals. We partner with vetted, highly-rated carriers to offer unbiased recommendations and plan sign-up directly from our website. After sign-up, Healthpilot continues to act as your support and guidance system for all things Medicare. If you’re looking to switch plans, review your coverage, file an appeal, or have a question—we’re here and ready to help. Ready to get started with Healthpilot? Whether you’re ready to hop right into it with our plan comparison tool , need additional help creating a Medicare enrollment checklist before you get going, or simply want to speak with someone who can help you , we’re here for you.

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