Unhappy with Your Medicare Advantage Plan? There's Time to Switch but also Rules to Know

Excerpts from yahoo!finance, 06/15/24: "About half of Medicare Advantage beneficiaries jump ship from the Medicare Advantage program they initially enrolled in after five years." ...and... If you’re enrolled in a Medicare Advantage plan, it’s time to decide if you want to make a change to your coverage. The federal government offers two enrollment periods every year for switching plans. Right now, Medicare Advantage enrollees can switch plans or transfer to traditional Medicare during the open enrollment period ending March 31. You cannot, however, switch from original Medicare to a Medicare Advantage plan. That enrollment period pops up in the fall.”

Changing plans isn’t just for cranky consumers. It’s a common thing. About half of Medicare Advantage beneficiaries jumped ship from the Medicare Advantage program they initially enrolled in after five years, according to a study published in the JAMA Health Forum.

Most of those enrollees switched to another Medicare Advantage plan rather than traditional Medicare. Only a fraction, 15%, moved to the traditional Medicare program, according to the report.

I bring this up because I’ve been hearing from an increasing number of retirees on Medicare Advantage who feel trapped in their current plans...the angst when a specialist they’ve been referred to isn’t part of their Medicare Advantage plan network. The delay in getting the authorization is frustrating or simply doesn’t happen…”

Our take: Kudos to Yahoo! Finance for shedding light on the current enrollment period and generally explaining the plan changes a current Medicare enrollee can make between January 1 and March 31 each year. However, the author—and the video—seemed to, in our opinion, understate the difficulty for a current Medicare Advantage participant to transition back to the combination of Original Medicare + a Medigap (Medicare Supplement) plan choice, especially after the five years mentioned by the authors. Requalifying for Original Medicare + a Medigap plan can be quite difficult, and if the applicant has even a single "yes" answer to the list of medical qualification questions, certain insurance carriers automatically decline. The only 'guaranteed issue' (GI) period to enter Original Medicare and add a Medigap / Medicare Supplement plan is during your initial entry into Medicare (or the privatized Medicare Advantage version) and up to a single full year thereafter. Consult a licensed agent or CMS to validate eligibility for the different programs and plans. Read and listen to full article.

10 Reasons Why Medicare Advantage Enrollment is Growing and Why It Matters

Excerpt from KFF, 04/30/24: For the first time in Medicare’s history, more than half of all eligible people with Medicare, or 30.8 million people in 2023, are enrolled in private Medicare Advantage plans. Medicare Advantage plans are offered by private health insurance companies that receive payments from the federal government to provide Medicare-covered services. People with Medicare have a choice between traditional Medicare (sometimes called fee-for-service Medicare or Original Medicare) and Medicare Advantage plans. The growth in Medicare Advantage enrollment is driven by a number of factors, including the Medicare payment system, which has served to attract and retain insurers and beneficiaries, rather than reduce Medicare spending.

Our take: The article highlights the surge in Medicare Advantage (Part C) plan enrollment, driven by incentives and aggressive marketing. However, it primarily compares Medicare Advantage plans to 'original Medicare,' which inherently has coverage gaps, with these gaps themselves leading to the actual introduction of Medicare Advantage plans (to address these gaps). With Medicare Advantage plans being a privatized alternative run as for-profit business by insurers the article seems to overlook key advantages of Medigap plans (also known as Medicare Supplement Plans), such as no restrictive networks, few referrals, no cancer copay (compared to 20% on non-Medigap plans), and low out-of-pocket maximums (contrasting with up-to-$8000/year deductibles on Part C plans)...all for a modest monthly premium (usually between $125 and $250/month). The added burden that all Medicare plans (including substitute plans like Medicare Advantage) must also satisfy the qualifications of Part A and pay for Part B ($174.74 base rate in 2024) perpetuates misconceptions about "free" Part C plans. As costs soar for providers, equipment, prescriptions, procedures, etc., the increasingly complex landscape policymakers must navigate is revealed. Read full article.