What you should know about the Medicare Advantage trap

Dear Savvy Senior: I will be enrolling in Medicare in a few months and would like to know if I initially enroll in a Medicare Advantage plan, am I able to switch back to original Medicare and get a supplemental (Medigap) policy and prescription drug plan later with without paying a penalty? — Almost 65

Dear Almost 65: You won’t be subject to any penalties for switching Medicare plans, but you will be subject to medical underwriting for the supplemental (Medigap) policy. That means the private insurance companies that offer these plans can deny you coverage or charge you a lot more for pre-existing conditions. This is known as the Medicare Advantage trap.

Here’s what you should know.

Understanding Advantage plans

Medicare Advantage plans (also known as Medicare Part C) are government-approved health plans sold by private insurance companies that you can choose in place of original Medicare. The vast majority of Advantage plans are managed-care policies such as HMOs or PPOs that require you to get your care within a network of doctors.

If you join an Advantage plan, it will provide all of your Part A (hospital insurance) and Part B (medical insurance) coverage like original Medicare does. But many Advantage plans also offer extra health perks such as dental, hearing and vision coverage along with gym/fitness memberships, and most plans include prescription drug coverage.

Medicare Advantage plans are also cheaper than if you got original Medicare plus a separate Part D drug plan and a Medigap policy. This can be very attractive to new enrollees who are relatively healthy and don’t require much medical care.

But the benefits and networks of Advantage plans can change from year to year. And if you get care outside the networks, you’ll usually pay more — sometimes a lot more. Advantage plans are also criticized for pre-authorization requirements that can delay or deny patient access to medical care.

The rap on Medicare Advantage plans has always been that they’re great when you’re healthy and don’t require much health care but, depending on the plan, may not be so great if you get sick.

With original Medicare, benefits remain the same and you can use any provider that accepts Medicare (most doctors do). But original Medicare has coverage gaps (deductibles, coinsurance and copayments) that can be very expensive, which is why you’ll need a supplemental plan offered by a private insurer.

If you opt for original Medicare when you’re first eligible, insurers are required to issue you a Medigap policy and can’t charge you more based on your health status. In most states, Medigap plans are automatically available only in the first six months after an enrollee becomes eligible for Medicare.

But if you enroll in a Medicare Advantage plan when you’re first eligible, you’ll miss the Medigap enrollment window, which means an insurer can refuse to write you a Medigap policy or charge you a lot more for signing up later. And in case you’re wondering, you can’t buy a Medigap policy while you’re in a Medicare Advantage plan.

For more information on how Medigap works, visit Medicare.gov.

Send your senior questions to: Savvy Senior, P.O. Box 5443, Norman, OK 73070, or visit SavvySenior.org.