Why Medicare Advantage Plans Are Bad: 7 Facts to Know

Greg Wilson

Updated on:

    The popular question is, are Medicare Advantage Plans bad? We answer this question for you and point out seven facts. 

    Have you seen commercials for zero-dollar premium plans? They claim to have all the necessary coverage, including prescription drug coverage, vision, dental and hearing benefits, and other perks. 

    Some people don't care for these plans, but let's point out that Advantage plans don't have to be bad, like everything; they are not for everyone. So we will help you understand more about these plans.

    Why Medicare Advantage Plans Are Bad?

    There could be many reasons people don't like Medicare Advantage plans, but it comes down to who you ask. 

    Doctors may not like Medicare Advantage plans because it could be harder for them to get paid by private insurers. 

    Your friend may not like it because of the limitations and annual changes to the policy terms. 

    Still, most people would say their primary complaint is they thought the plan was free.

    Why Are Some Medicare Advantage Plans Free? 

    Like most things, please remember that nothing is free, and zero-dollar premium plans are not free either. Remember this: there are no free Medicare plans. 

    I'll explain how it works: Medicare contributes a certain amount of premium per person to the Medicare Advantage carriers to take on your health risk, so they don't have to. Then the Advantage carriers create plans to look attractive to convince you to sign-up. 

    The Advantage plan replaces Medicare Parts A and B using cost-sharing to compensate for the zero-dollar premiums. Medicare Advantage plans have out-of-pocket co-payments you must pay when you visit the doctor, have a test performed, or have any service. 

    Don't think just because you have a zero-dollar premium plan, you still need to make the Medicare Part B premium payment unless you pick a plan that includes a Part B premium reduction. 

    How Do Medicare Advantage Plans Make Money?

    Medicare has the insurance carriers make bids on medical services. They compare all the proposals to create a benchmark that varies from county to county, and they pay a certain amount per person based on these benchmarks, which is why some Advantage plans are free and others have a monthly premium.

    Is Medicare Advantage a Good Deal? 

    Having some coverage is wise if you have no coverage, you never know what could happen.

    For some people on a limited budget and can't afford the monthly premium of a Medigap plan, choosing a Medicare Advantage plan with good coverage that fits your needs would be a good decision. If you think you'll use your benefits often, it may not be a good deal since you'll contribute to every service out of pocket. 

    Holes in Medicare Advantage Plans

    Some people experience frustration with the Medicare Advantage plan's frequent changes, unlike the Medigap plan. You'll have to stay on top of these changes, or you could face issues when you seek services. 

    Even though some plans claim to include dental, vision, and hearing care, some people are later disappointed by the cracks in the coverage. Then you'll have to pay more than you planned and sometimes for services you believed were covered. 

    Can't Travel With This Coverage

    If you are traveling, this coverage won't work for you; it's not like Medicare Supplemental insurance. If you have health problems, you could pay a lot of out-of-pocket for services. 

    Networks of Doctors Are Too Small

    Unlike Medigap plans, which will pay for services nationwide to anyone who accepts a Medicare assignment, Medicare Advantage plans have a small network of doctors than Medigap. Therefore, you should always check your Advantage plan's provider directory before you sign-up to ensure ALL of your doctors are in that plan's network.

    Also, it would be best if you communicated with your doctors to make sure they plan to stay in the network, as they are free to leave the network at any time, leaving you stuck in the plan until the next Annual Enrollment Period.

    You have two options: to pay 100% of your medical costs and keep your doctor or to find a new doctor in your plan's network.

    The Out-of-Pocket Costs Add Up 

    The good part is Medicare Advantage plans have a maximum out-of-pocket amount; the bad part is that amount can be high enough to strain some people. This may not be your plan if you don't have any savings. 

    Medigap plans don't have out-of-pocket maximums; the Medicare Supplement plans won't nickel and dime you like Advantage plans. 

    why medicare advantage plans are bad

    Advantage Plan Benefits Change Annually 

    Keep in mind that, unlike the Medigap plans, the Advantage plans change annually; you can stay on top of this by reviewing your plan's Annual Notice of Change every September to make sure your plan has the same benefits for the upcoming year.

    Do Doctors Like Medicare Advantage Plans? 

    Since Advantage plans put the patients' financial risk on the doctors, which is called global risk or full risk, most physicians may surprise you and express their dislike for the Advantage plans, which is a way to keep costs down and provide less care. 

    Are Medicare Advantage Plans Worth It? 

    If you are healthy, live in a prime Medicare Advantage area, and prefer to pay-as-go, Medicare Advantage plans might work for you. They are worth the zero-dollar premium, but it's up to you if the coverage meets your needs. 

    Choosing your plan based on its value depends on your healthcare needs, budget, location, and preferences. People also decide to leave Medicare Advantage plans for good reasons. 

    What Are The Worst Medicare Advantage Plans? 

    The worst plan would be that you chose without thoroughly reading the terms and conditions and understanding the plan. 

    If you have many health issues and many doctors, you should check out a PPO policy, and if you are relatively healthy with only one doctor, you should try an HMO policy. 

    Fortunately for you, they use a 5-star rating system that helps you identify the quality and popularity of a plan and what to avoid. 

    Many people are disappointed with the constant need to pay co-pays and wait for referrals for services to a small network of doctors; with these issues, be sure to research before choosing a Medicare Advantage Plan. 

    Can I Enroll in a Medigap Plan Later if I Enroll in a Medicare Advantage Plan Now? 

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    Yes, you can enroll in a Medicare Advantage plan and a Medigap plan later. Still, you'll have to wait for either the Annual Enrollment Period or the Medicare Advantage Open Enrollment Period to make changes. 

    Remember that most people only get a one-time Medigap Open Enrollment Period, which is your only chance to enroll in a Medigap plan without answering health questions. 

    Still Have Questions?

    If you qualify for Medicare but don't know where to start, we have licensed insurance agents ready to answer your questions and help you enroll in Medicare Advantage, Medicare Supplement Insurance, and Prescription Part D plans.


    What Are The Disadvantages of Medicare? 

    There is no vision, hearing, or retail prescription drug coverage

    Will I pay more out-of-pocket for a Medicare Advantage plan than a Medigap plan? 

    Some people are put off by the higher premium of Medicare Supplemental plans at first, but your out-of-pocket costs each year could end up being higher on a zero-premium plan because of the smaller network of doctors and out-of-pocket co-pays. Sometimes, paying the upfront monthly premium could help you save money.

    Why are Medicare Advantage plans pushed so hard?

    Advantage plans are heavily advertised because of how they are funded. These plans' premiums are low or nonexistent because Medicare pays the carrier whenever someone enrolls. In addition, it benefits insurance companies to encourage enrollment in Advantage plans because of the money they receive from Medicare.


    Medicare Advantage is not the best solution for everyone, and most costs are paid out of pocket when you seek health care services. 

    With Original Medicare and Medigap, most of your costs are paid in advance. 

    A Medicare Advantage plan can help you save money and provide some coverage in some cases.

    Medicare Advantage plans are more beneficial when you're healthy and receive assistance paying the shared cost. 

    If you qualify for Medicare and Medicaid, you may find a Medicare Advantage Special Needs Plan affordable. 

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