If you’re one of the majority of Medicare beneficiaries in private insurers’ Medicare Advantage plans (the alternative to Traditional Medicare), you’ll want to make smart choices during their Open Enrollment season which started Jan. 1 and ends March 31.
It’s the time when you can switch from your Medicare Advantage plan to a different one or leave Medicare Advantage for Traditional Medicare instead.
Reasons to switch plans
There are many reasons why you might want to make such a move.
Cost, coverage, and network of providers
“Maybe you’re now going to new doctors and health providers. Maybe your plan’s coverage or network of doctors is different than it was,” says Roger Wohlner, a financial advisor in Arlington Heights Ill. “Maybe you’ll be living in another part of the country part of the year, with different doctors. You always want to make sure your Medicare coverage is right for you.”
You may not be thrilled about the chore of comparing Medicare Advantage plans to see if there’s a better one for you. The average beneficiary will have access to 43 plans, according to the KFF health research firm.
But, says Meredith Freed, a KFF senior policy analyst: “It’s worth spending a little time to understand the differences across plans because it might save you money and might be better in terms of the coverage you get. The plans can vary considerably.”
Those differences can be in their cost, coverage and, most importantly, quality. Roughly a third of the plans get just 3 stars or less in Medicare’s 5-star rating system.
If you’ve been unhappy with Medicare Advantage in general, you may want to research dropping your plan for Traditional Medicare and buying a supplemental Medigap and Part D prescription drug plan.
You might be frustrated by Medicare Advantage plans’ limited network of doctors and hospitals or their requirement for prior authorization before seeing specialists.
“What a lot of people find in Medicare Advantage is that the plan delays the care they need or prevents them from seeing the specialist their primary care doctor thinks they need,” says Diane Archer, president of Just Care USA, a health care digital hub.
Despite Medicare Advantage ads touting $0 premiums, your actual out-of-pocket costs with a plan could be steep. “The typical out-of-pocket limit for folks in Medicare Advantage is around $5,000 and that’s for in-network care only,” noted Archer.
Some people with Medicare Advantage have buyer’s remorse
“They get into the plans and don’t like them and feel trapped,” says Joel Mekler, who writes a weekly Medicare column. “That’s the whole idea behind Medicare Advantage Open Enrollment—to give people an option. You might even call it a do-over.”
This is a key year to think about making a switch due to trends in Medicare Advantage plans, rising prescription costs and Medicare itself.
Some Medicare Advantage plans are losing certain doctors and hospitals, so your favorite health providers might no longer be in yours this year. “You’re going to see more and more volatility within those plans,” says Wohlner.
Medicare Advantage plans have curtailed telehealth, too; according to KFF. Just 83% now offer telehealth, down from 97% a year ago. So, if you’d like to be able to see your doctor virtually, you may need to find a different plan.
Your Medicare Advantage plan might be charging more for prescriptions, too
The 3 Axis Advisors research firm found that pharmaceutical companies planned to raise prices on more than 500 drugs from over 140 brands in January 2024. (This year, after your out-of-pocket spending on prescriptions tops $8,000, you’ll pay nothing for your covered Part D drugs; in 2023, after $7,400 in prescription drug costs, you owed 5% in coinsurance.)
On the bright side, Medicare in 2024 is expanding mental health coverage to include marriage and family therapists and mental health counselors. If you’ll be in Medicare Advantage and will want to see one, you’ll need to see which—if any—are in the plan’s network.
Some therapists and counselors will choose not to accept Medicare due to its low reimbursements. “Medicare’s rates are so low [for therapists] that it may still not be possible to get access to the mental health care you need,” cautioned Archer.
Switching to a different Medicare Advantage Plan
Here’s what to know before switching from one Medicare Advantage plan to another:
For help in determining whether there’s a better Medicare Advantage plan for you with lower costs, better coverage or both, start by comparing choices with the Plan Finder Tool at Medicare’s website, Medicare.gov. After entering your ZIP code, select “Medicare Advantage Plan (Part C) and enter the prescription drugs you take. Then, you’ll see a list of the Medicare Advantage plans in your area with details about them.
Each plan will show you its benefits; whether telehealth is offered; monthly premiums; drug costs; copays/coinsurance; out-of-pocket maximums; Medicare star rating plus its phone number and a link to the plan’s website.
Bear in mind, however, that just because a Medicare Advantage plan says it has dental, vision or hearing benefits, that doesn’t mean these benefits are robust. “The data suggests that in a lot of these plans, it’s more sizzle than steak,” says Archer.
To find out exactly how generous the benefits are, you’ll need to read the plan documents section of the Medicare Advantage plan’s site.
Another useful source of free, unbiased information is your State Health Insurance Assistance Program or SHIP. “You can tell a SHIP counselor, ‘These are the things that are most important to me. How can I choose a plan that reflects that?” says Freed.
Medicare Advantage brokers and agents can also guide you to appropriate plans. You won’t pay a fee for their service; they’re compensated by insurers. That’s why you’ll want to ask sharp questions to ensure you won’t be steered to a plan because the person earns more by enrolling you there.
Your primary care physician can also give you the skinny about Medicare Advantage plans where you live. The doctor will likely have personal experience with the prior authorization rules of each plan.
If you learn from a Medicare Advantage physician directory that your specialists are in its plan, call the plan to doublecheck, says Mekler.
Provider directories are notoriously inaccurate, sometimes called “ghost networks.” When the Senate Finance Committee reviewed Medicare Advantage directories in 2023, staffers could only make appointments 18% of the time. More than 80% of the listed, in-network, mental health providers were unreachable, not accepting new patients or not in-network.
Archer also recommends seeing whether a Medicare Advantage plan lets members go to any of the nation’s 72 Cancer Centers on Excellence. “That would be an indication that the plan is actually looking to make sure its enrollees get good care if they’re diagnosed with a costly condition,” she says.
If you have a chronic illness or are on Medicare and Medicaid, you may want to look for a Medicare Advantage Special Needs Plan. This kind of plan may offer special supplemental benefits and will include Part D prescription drug coverage, too.
When you switch from one Medicare Advantage plan to another, you’ll be automatically disenrolled from the initial plan as soon as your new coverage starts. That should happen the month after you take steps to get a new plan.
Switching to Traditional Medicare
Here’s what to know before switching from Medicare Advantage to Traditional Medicare:
Although leaving Medicare Advantage for Traditional Medicare will give you access to more doctors and hospitals and reduce prior authorization problems, it will also likely be more expensive.
Since Traditional Medicare only covers 80% of the Medicare-approved amount of doctor’s bills and home health care and doesn’t include prescription drug coverage, many people who go this route also buy a supplemental medical insurance policy known as Medigap and a Part D prescription drug policy.
The average cost of Medigap policy in 2024 is about $1,650, though some are far more expensive and others less. Premiums for a Part D policy might run about $660 in 2024, but there’s also an annual deductible of up to $545, plus copayments and coinsurance.
“The premium costs could be more than a lot of people can handle,” says Freed.
Another potential problem is that if you have a pre-existing condition, you might be turned down for a Medigap policy or charged a very steep premium to get one. Only four states—Connecticut, Maine, Massachusetts and New York—guarantee the ability to buy a Medigap policy and charge the same for everyone.
Otherwise, each Medigap insurer has its own rules about who’ll be able to get coverage and at what price, as well as who’ll be denied policies.
“If they feel that you’re not profitable, they don’t have to take you,” says Wohlner.
Usually, denial happens when you have a severe or chronic illness, such as COPD, congestive heart failure, Alzheimer’s, Parkinson’s, multiple sclerosis, end-stage renal disease or AIDS. If you have diabetes or cancer, a Medigap insurer will approve or deny coverage depending on its severity.
You’ll likely be declined if you’re receiving home health care or have been hospitalized two or more times in the last two years, according to Boomerbenefits.com.
Conditions such as high cholesterol or high blood pressure probably won’t lead to a Medigap denial if they’re not connected to a more serious condition.
Before dropping your Medicare Advantage plan, find out whether you’ll be able to buy a Medigap policy and at what price. A likely denial or exorbitant cost might lead you to decide to stay with Medicare Advantage.
If you do decide to switch into Traditional Medicare, you can either call Medicare (800-63304227) to disenroll from Medicare Advantage, phone your Medicare Advantage insurer to get a disenrollment form or visit a Social Security office and ask for help to leave the plan.
Just be sure you’ve also signed up for a Part D prescription plan; the Medicare site’s Plan Finder can help you choose one, as can a broker or agent. If you can get, and afford, a Medigap plan, buy one, too.
