Don’t Make the Wrong Medicare Decision

Healthcare can be one of your largest retirement expenses, so it’s crucial to choose the right plan at age 65. Open enrollment for Medicare in 2025 is October 15 to December 7 2024. 

 Below are your  two  choices for Medicare when you turn 65:

What They Don’t Tell You About Medicare Advantage

If you choose a Medicare Advantage plan (all sold by a for profit insurance company) all healthcare decisions are made by a for profit Insurance company. If you have Original Medicare all healthcare decisions are made by the Federal Government.

With Medicare Advantage, a private insurance company makes all healthcare decisions, often leading to denials or delays. Government reports highlight extensive claim rejections, with some care denied that would likely be approved under Original Medicare. 

Medicare Advantage uses “Prior Authorization” to deny coverage and increase profits.

Medicare Advantage companies won’t pay for procedures or drugs unless the patient's physician obtains approval from the insurance company in advance. 

This tactic, used by insurance companies to control costs, is called Prior Authorization

The less care they approve, the more profit they make.

Original Medicare has no prior authorizations.  If your doctor orders a procedure, Original Medicare will approve the treatment.

Medicare Advantage limits coverage to In network Doctors and Hospitals.

This is critical to understand.  Medicare Advantage plans typically limit coverage to a network of specific doctors, hospitals, and other providers.  The top hospitals (Memorial Sloan Kettering, Moffit) and top specialists won’t accept most Medicare Advantage plans because it pays them less and requires Prior Authorizations.  With Medicare Advantage you may not be able to see the best specialists or go to the top hospitals when you are very sick. 

Insurance companies earn significantly more revenue selling Medicare Advantage Plans than  Medicare Supplement  plans

For each enrollee in Medicare Advantage, the federal government pays the Insurance company a fixed monthly rate (around $12,000 annually in 2019). 

Medicare Advantage plans attract new enrollees by promoting low or $0 premiums, plus perks like vision, dental, gym memberships, and hearing aids.

Insurance companies pay multiple times the rate to “Medicare Consultants” to sell Medicare Advantage instead of Medicare Supplement Plans.

I would suggest only working with a Medicare consultant who will recommend a Medicare Supplement and not a Medicare Advantage plan.

Some employer sponsored  Medicare Advantage plans tout that you can go out of network and see any doctor you want. However read the fine print and they will tell you “provided that the service provider will accept this” (lower rate).

Many healthcare providers won’t accept this lower rate. With Original Medicare you can see any healthcare provider  that takes Medicare. Most do.  All hospitals take Original Medicare.

You may not be able to switch to a Medicare Supplement  policy after the initial enrollment period when you are 65.

When you initially enroll in Medicare at age 65, you have a guaranteed right to purchase a Medicare Supplement  plan . Insurers cannot ask about pre-existing conditions. Insurers are required to renew coverage each year as long as you continue to pay your premiums.

There are exceptions. Connecticut, New York, Maine, and Massachusetts require insurers to sell Medicare Supplement plans to all Medicare beneficiaries aged 65 and older, regardless of health history.

Cost Risks of Medicare Advantage

Although some Medicare Advantage plans have $0 premiums, out-of-pocket costs can add up if you need significant care. 

Final Thoughts

Open enrollment for Medicare in 2025 is October 15 to December 7 2024.   Make an educated Medicare choice that is in your best interest and not the insurance companies.

NOT FINANCIAL ADVICE

The information contained in this article is for informational purposes only and shall not be understood or construed as financial advice. I am not an attorney, accountant, or financial advisor, nor am I holding myself out to be. I do not accept any fees or commissions from anyone or any financial institution. 

I’d love any feedback on these articles.