Worst Medicare Advantage Plans Available in 2024

by David Bynon, last updated

Navigating the world of Medicare Advantage plans can be a daunting task. Some private health plans are great, but many aren’t. You need to learn how to identify and weed out the worst Medicare Advantage plans from your list of options.

Avoiding the Worst Medicare Advantage Plans

In recent years, the popularity of Medicare Advantage plans has surged, with nearly half of Medicare beneficiaries choosing this option. The appeal lies in the promise of affordable healthcare, enhanced coverage, and a wide array of supplementary benefits.

However, beneath the surface, there are potential pitfalls that everyone on Medicare should be aware of.

Every year, Medicare publishes a list of sanctioned Medicare Advantage plans. These are the worst Medicare Advantage plans. They also publish 5-star ratings for all Medicare Part C and Part D plans.

This is the first year since MedicareWire was founded in 2012 with no sanctioned plans. And, even more importantly, we have more 4.5- and 5-star plans this year than ever. With an average of 43 plans in most areas, how do you identify the bad ones?

Simply avoiding sanctioned plans and comparing plans by star ratings does not guarantee you will avoid enrolling in the worst Medicare Advantage plan.

Also See: Why Medicare Advantage Plans are Bad

Costs vs. Benefits

Medicare Advantage plans are a delicate balance between costs and benefits. Private insurance companies can offer more benefits and services than Original Medicare, but they can also set the out-of-pocket costs for their plans.

As a result, some MA plans are less beneficial for some people than they might be for others. For this reason, it isn’t fair to say that a plan is bad because it costs one member more than another.

In reality, a plan can be both the worst option for one person and the best for another. How can this be?

It all comes down to matching out-of-pocket costs and additional benefits to the beneficiary’s individual needs. Let’s face it: a zero-dollar premium HMO plan that charges 20% coinsurance for doctor and specialist visits, and 40% coinsurance for hospital stays, probably isn’t a good option for an aging diabetic with compounding health conditions.

Yet, every day, people jump into a plan they have no business in because they look at the monthly cost, not the overall cost and their healthcare needs. Then they turn around and bash the plan for doing what it is supposed to do, cutting costs for a healthy individual who needs basic health maintenance.

Pitfalls to Watch Out for When Considering Medicare Advantage Plans

While Medicare Advantage plans have their share of advantages, it’s essential to be aware of potential pitfalls. Medicare Advantage plan pitfalls can significantly impact your healthcare coverage and financial well-being. Here are some key pitfalls to watch out for:

  1. Limited Provider Networks:Most Medicare Advantage plans have specific provider networks, meaning you must seek care from in-network doctors and hospitals to receive full coverage. If you have a preferred healthcare provider who is outside the plan’s network, you may face higher costs or even full out-of-network expenses.Tip: Before enrolling in a plan, please check the network to ensure your preferred healthcare providers are included. If choice and flexibility are crucial, consider a Preferred Provider Organization (PPO) plan, which allows for out-of-network care at a higher cost.
  2. High Out-of-Pocket Costs: While Medicare Advantage plans often offer lower premiums than traditional Medicare, they can have higher out-of-pocket costs. Pay attention to deductibles, copayments, and coinsurance, as these can add up quickly, especially if you require frequent medical care.Tip: Assess your healthcare needs and budget carefully. If you anticipate regular doctor visits, treatments, or hospital stays, consider a plan with lower out-of-pocket maximums to limit your financial exposure.
  3. Coverage Gaps: Medicare Advantage plans, like traditional Medicare, may have coverage gaps. While there is an annual cap on in-network and out-of-network costs, the specific cost-sharing for services can vary between plans. Some services may have coinsurance rates higher than 20%, potentially leading to unexpected expenses.Tip: Review each plan’s summary of benefits to understand the cost-sharing structure for services you commonly use. Pay attention to services with higher coinsurance rates and consider how these may impact your budget.
  4. Quality Ratings: The Centers for Medicare and Medicaid Services (CMS) provides ratings for Medicare Advantage plans based on various metrics. While a plan may have an overall high rating, it’s essential to dig deeper into individual rating categories, such as customer service and member experience. A high overall rating could mask deficiencies in specific areas.Tip: Don’t rely solely on the overall plan rating. You can explore individual metrics for a more comprehensive view of the plan’s performance, making sure it aligns with your expectations.
  5. Change in Provider Networks: Medicare Advantage plans can adjust their provider networks and formulary lists annually. This means your preferred doctor or medications may not be covered in the upcoming year. Reviewing the plan’s annual notice of changes is vital to anticipate any disruptions.Tip: Stay proactive and review plan updates every year during the Annual Enrollment Period (AEP). This allows you to assess whether the plan continues to meet your healthcare needs.
  6. Understanding Extra Benefits: While Medicare Advantage plans often tout extra benefits like dental, vision, and gym memberships, the devil is in the details. These additional benefits may have limitations, such as coverage caps or restrictions on the types of services or providers you can use.Tip: Read the fine print regarding extra benefits and understand the extent of coverage. If dental or vision coverage is essential, please ensure the plan provides adequate benefits in these areas.
  7. Supplemental Coverage Needs: In some cases, Medicare Advantage plans may not adequately cover all your healthcare needs. If you have specific health conditions or anticipate high medical costs, consider supplemental coverage options like a Medigap policy, accident insurance, or cancer policies to fill potential gaps.Tip: Assess your unique healthcare needs and budget to determine if supplemental coverage is necessary. Consult with a Medicare advisor or insurance expert for personalized guidance.

Awareness of these potential pitfalls and taking proactive steps to address them will empower you to make an informed decision when selecting a Medicare Advantage plan. Remember that what works best for one person may not be the right choice for another, so prioritize your healthcare needs and financial circumstances when selecting.

Avoid Plans with High Out-of-Pocket Costs

Let’s be honest about what Medicare Advantage plans are. They are a product that makes money for the companies offering them.

As previously mentioned, Medicare Advantage plans are a balance between costs and benefits. Said another way, plans that give you more freedom generally have higher copays and out-of-pocket maximums.

In this case, freedom might mean using services without prior approval or choosing a provider that isn’t in a plan’s network. This is the difference between Health Maintenance Organization (HMO) plans and Preferred Provider Organizations (PPOs).

HMOs are very rigid. All services must be in-network, or you pay all costs. PPOs have higher costs in most areas but allow both in-network and out-of-network healthcare services. However, PPOs generally have high out-of-pocket limits on out-of-network services.

Free Plans are Not Free!

If you have been shopping for Medicare Advantage plans, you have probably seen plans with a zero-dollar premium. These plans are not free. Many of these plans are the most expensive due to their high out-of-pocket costs.

Here’s what you need to know. When you join a Medicare Advantage plan, you continue paying your Medicare Part A and Part B premiums. If a Medicare Advantage plan has a premium, it pays for the additional benefits it includes.

Also See: Are Free Medicare Advantage Plans Really Free?

Beware of Plans with Limited Provider Networks

Unlike Original Medicare, most Medicare Advantage plans have local provider networks. In some cases, the availability of certain specialists may be very limited or unavailable in the network. This is particularly true with HMO plans in rural areas.

Additionally, HMO plans tend to have more obstacles to specialist care and certain procedures. Referrals are required to schedule appointments with specialists, and plan https://medicarewire.com/wp-content/uploads/2024/06/Geisinger-logo-1.svgistrators decide which services are approved.

HMO plans often include additional benefits and lower monthly costs, but they come at the cost of freedom and choice. These plans work best for healthy enrollees whose primary need is health maintenance. PPO plans work better when you need more choice.

Plans Have Low-Quality Ratings for a Reason

Every year the Centers for Medicare and Medicaid Services (CMS) publishes comprehensive 5-star ratings on all Medicare Advantage and Medicare Part D (prescription drug) plans. One of the problems with these ratings is that they get rolled up into a summary rating.

Unfortunately, people look at the summary rating and make a snap decision about the plan. This is why MedicareWire publishes each rating category CMS uses to create the summary.

Each health plan is rated overall on the following metrics:

  1. Staying Healthy: Screenings, Tests, Vaccines
  2. Managing Chronic (Long Term) Conditions
  3. Member Experience with Health Plan
  4. Complaints and Changes in Plans Performance
  5. Health Plan Customer Service

Prescription drug plans are rated using four major metrics:

  1. Drug Plan Customer Service
  2. Complaints and Changes in the Drug Plan
  3. Member Experience with the Drug Plan
  4. Drug Safety and Accuracy of Drug Pricing

As a result, an insurance plan that includes Part D prescription drug coverage receives a summary rating that includes all 9 metrics. This can mask bad customer service ratings. For this reason, it is very important to look at the individual metrics, not just the summary.

Coverage Gaps are Your Enemy

Just like Medicare Part A and Medicare Part B have coverage gaps, Medicare Advantage plans have coverage gaps. The difference is that all Medicare Advantage plans have an annual cap on in-network and out-of-network coverage.

However, this is a big issue to be aware of. The coverage gap on a specific service may be more or less than 20% with a Medicare Advantage plan.

How can this be?

Simple. Medicare Advantage plans are allowed to set their rates for each specific service.

There’s a growing trend with private Medicare plans on hospitalization. More and more there are plans with a 20 to 40% coinsurance.

This might make sense if you are an exceptionally healthy person and buy additional insurance for accident coverage or hospitalization. But, if you got into a plan with a high coinsurance for hospitalization because you didn’t carefully consider all the costs, you could be in for a whopper of a bill for a 5-day stay (the average).

MedicareWire publishes all out-of-pocket costs on every Medicare Advantage plan. And we allow you to download this information as a PDF to print it and compare plans side-by-side.

How to Choose the Best Medicare Advantage Plan

Selecting the best Medicare Advantage plan requires careful consideration of your unique healthcare needs, preferences, and financial circumstances. Here’s a step-by-step guide to help you make an informed choice:

1. Evaluate Your Healthcare Needs

Before you start comparing plans, take stock of your health. Consider factors such as:

  • How often do you visit your doctor?
  • Do you have any chronic conditions or specific healthcare requirements?
  • Are you currently taking prescription medications?
  • Do you need coverage for services like dental care, vision, or fitness memberships?

Understanding your healthcare needs will help you choose a plan that provides the required coverage.

2. Review Available Plans in Your Service Area

Research the Medicare Advantage plans available in your service area. You can use the Medicare Plan Finder tool on Medicare.gov, our plan finder tool, or seek assistance from a licensed insurance agent. Pay attention to the following aspects:

  • Provider Networks: Check if your preferred healthcare providers are in-network.
  • Coverage: Examine the benefits, including prescription drug coverage, preventive services, and extra benefits.
  • Costs: Compare premiums, deductibles, copayments, and coinsurance for each plan.
  • Prior Authorization: Examine the services that require prior authorization as this requirement can delay treatment.
  • Ratings: Review the plan’s quality ratings provided by the Centers for Medicare and Medicaid Services (CMS).

3. Understand Plan Types

Medicare Advantage plans come in different types, including Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), HMO Point of Service (HMO-POS) plans, Private-Fee-for-Service (PFFS) plans, and Special Needs Plans (SNPs). Understand the key features of each type:

  • HMOs often have strict network restrictions but may offer lower costs.
  • PPOs provide more flexibility in choosing healthcare providers but come with higher costs for out-of-network care.
  • HMO-POS plans offer coverage for members who travel a lot within the country. Members generally pay higher costs when using the point-of-service option (out-of-network providers).
  • A PFFS plan sets the rates it will reimburse doctors, healthcare providers, and hospitals and your out-of-pocket expenses when you receive medical services.
  • SNPs cater to individuals with specific conditions, limited incomes, or institutional needs, offering tailored benefits and support.

Choose a plan type that aligns with your preferences for network flexibility and cost control.

4. Compare Costs

Consider the total cost of a Medicare Advantage plan, including premiums, deductibles, copayments, and coinsurance. Pay attention to:

  • Monthly Premium: This is the amount you pay monthly to be in the plan.
  • Maximum Out-of-Pocket Limit: Determine the most you’d have to pay in a year for covered services.
  • Cost-Sharing: Understand how much you’ll pay for common healthcare services, such as doctor visits and hospital stays.

You can balance your budget with your healthcare needs to find a plan that offers affordable coverage. If you focus on your primary care instead of plan options that are nice perks, it will be easier to pick the right plan.

5. Check Drug Coverage

If you take prescription medications, ensure the plan includes your drugs on its formulary (list of covered medications). Consider:

  • Tier Structure: Review how drugs are categorized into tiers, affecting your copayments.
  • Coverage Gap: Understand the plan’s coverage during the Medicare Part D coverage gap (often referred to as the “donut hole”).
  • Preferred Pharmacies: Check if the plan has preferred pharmacies for lower drug costs.

Look for comprehensive and cost-effective prescription drug coverage if you have costly prescriptions. Your best option may be a stand-alone Part D plan.

6. Examine Extra Benefits

Evaluate the plan’s extra benefits, such as dental care, vision, hearing, fitness memberships, and transportation services. Determine if these benefits align with your wellness and healthcare needs.

7. Review Quality Ratings

Look beyond the overall plan rating and delve into specific CMS metrics related to customer service, member experience, and health outcomes. A higher-rated plan may provide better overall satisfaction.

8. Consider Future Needs

Think about how your healthcare needs may change over time. While predicting every future health issue is impossible, consider whether the plan provides flexibility to accommodate potential changes.

9. Seek Professional Guidance

If you find the selection process overwhelming or have specific questions, consult a licensed insurance agent or a Medicare advisor. They can provide personalized guidance based on your circumstances.

10. Enroll During Appropriate Open Enrollment Periods

Ensure you enroll in your chosen Medicare Advantage plan during the Annual Enrollment Period (AEP) or during a Special Enrollment Period (SEP) if you qualify. Missing enrollment periods can result in delayed or limited coverage.

Choosing the best Medicare Advantage plan requires thorough research and consideration of your healthcare needs, budget, and preferences. By following these steps and staying informed, you can make a well-informed decision that provides the coverage you need for a healthier future.

How to Supplement a Medicare Advantage Plan

Most experts agree Original Medicare coverage and Medicare Supplement Insurance (aka, Medigap plan) offer the most comprehensive coverage you can buy. With a Medicare Supplement plan, high out-of-pocket costs and concerns disappear. Unfortunately, not everyone can get supplemental Medicare coverage, and many seniors can’t afford it.

Here are some additional options that work with a Medicare Advantage plan.

Accident Insurance

Accident insurance covers medical and other out-of-pocket costs incurred after an accident. Some of the costs this type of insurance covers include emergency treatment, hospital stays, medical exams, and transportation.

Accident insurance is beneficial in filling the gap between a health plan and vehicle insurance. So, for example, if you are a motorcyclist, like me, and you have an accident, your motorcycle policy may cover some of your personal injury costs. Even so, your Medicare policy may not cover the remainder. Accident coverage helps cover the gap.

Hospital Indemnity Policies

Hospital indemnity insurance works with your Medicare plan to help pay expenses for hospital stays. Depending on the policy, a hospital indemnity plan gives you cash payments to help you pay the bills coming your way while you recover.

Like accident plans, hospital plans are relatively low-cost. They are very effective in their ability to offset inpatient hospitalization out-of-pocket costs. Humana is one of the leading health insurance companies that offers this type of coverage.

Cancer Policies

Unlike a hospital indemnity plan, which helps with hospitalization costs, cancer plans assist with all costs related to cancer treatment (inpatient and outpatient). The most costly cancer treatments are medications covered under Medicare Part B. If you choose a Medicare Advantage plan with a 20% coinsurance on Part B medications, you could receive a whopper of a bill.

Purchasing a basic cancer plan will help pay you a lump sum if you’re diagnosed with cancer. You can use this payment for anything, including the cost of chemotherapy in your doctor’s office.

How To Get Help Finding The Right Medicare Plan

While Medicare Advantage plans have many advantages, they potentially have just as many pitfalls. Extra benefits and low premiums are great, but you must ensure the services you need most are covered at a cost you can afford. Unfortunately, doing so can be complicated.

This is exactly why MedicareWire has partnered with HealthCompare.

HealthCompare, an Allstate company, is a nationwide insurance agency contracted with the largest, top-rated plans from coast to coast. We recommend them as your first call because they have consistently demonstrated excellence in serving our visitors.

You can speak with a HealthCompare agent by calling 1-855-728-0510 (TTY 711).

Citations & References

Medicare.gov References:

  1. Medicare Advantage Plans
  2. Understanding Medicare Advantage Plans
  3. Annual Enrollment Period for Medicare Advantage and Medicare prescription drug coverage
  4. Choosing a Medigap Policy

CMS.gov References:

  1. Medicare Advantage
  2. Star Ratings for Medicare Advantage and Part D Prescription Drug Plans
  3. Medicare Advantage Enrollment Data

KFF.org References:

  1. A Primer on Medicare: Key Facts About the Medicare Program and the People it Covers
Was this article helpful?

Related Articles