Why Medicare Part C plans may not be the best option
And why you should consider a Medicare Supplement plan instead.
When you turn 65, or become eligible for Medicare due to disability, you’ll need to make important decisions about your healthcare coverage. For many, the choice boils down to two primary options: Medicare Part C (Medicare Advantage) plans and Medicare Supplement (Medigap) plans. While Medicare Advantage plans are marketed as an all-in-one solution with low or $0 premiums, they come with significant downsides that could result in higher out-of-pocket costs, limited access to care, and added frustration over time. On the other hand, because a Medigap plan is not true insurance and relies on Original Medicare, you have broader access to healthcare providers, fewer restrictions, and more predictable costs.
This article explores why Medicare Advantage plans may not be the best option for your healthcare needs, and why a Medicare Supplement plan is almost always the smarter choice for your long-term health and financial well-being.
In this article
- 1 Restrictive Provider Networks
- 2 Prior Authorization and Required Referrals
- 3 Limited Access to Specialty Care
- 4 Higher Out-of-Pocket Cost
- 5 Changes to Plans and Benefits
- 6 Prescription Drug Coverage Ins't Always Reliable
- 7 Flexibility & Peace of Mind
- 8 Advantage Plan Now, Supplement Later
- 9 Are Medicare Advantage Plans All Bad?
- 10 Takeaways
Restrictive Provider Networks
One of the most significant drawbacks of Medicare Advantage plans is the limited provider networks. Most Advantage plans operate as either Health Maintenance Organizations (HMOs) or Preferred Provider Organizations (PPOs). These types of plans restrict you to a specific group of doctors, specialists, and hospitals that have contracts with the insurer.
- Health Maintenance Organization (HMO) Plans: In an HMO plan, you must receive care from doctors and specialists within the plan’s network, except in emergencies. This means that if your current doctor isn’t part of the network, or if your doctor leaves that network, you may need to switch to a new one—often disrupting your continuity of care.
- Preferred Provider Organization (PPO) Plans: PPOs offer more flexibility, allowing you to see out-of-network providers, but you will likely pay higher copayments or coinsurance. Even with a PPO, you are still limited in terms of which providers are considered in-network, and out-of-network care can be significantly more expensive.
Medicare Supplement plans, however, allow you to see any doctor or specialist who accepts Medicare, without network restrictions. This flexibility is especially important for individuals with complex or ongoing health conditions who may need specialized care. With Medigap, you have the freedom to choose your healthcare providers across the country.
Prior Authorization and Required Referrals
Medicare Advantage plans often impose additional hurdles for getting the care you need. Prior authorization is a process in which your doctor must get approval from your insurance company before certain services are provided. While this is meant to control costs, it can lead to delays in care and frustration for patients who need timely medical attention.
For example, if you require a specialized test, surgery, or a non-emergency procedure, your doctor must obtain approval from your Medicare Advantage insurer. Even if your doctor recommends a specific treatment or medication, the insurance company may deny or delay the authorization, potentially impacting your health.
Additionally, many Medicare Advantage plans require you to get a referral from your primary care doctor before seeing a specialist. This can slow down access to specialized care, as you’ll need to schedule an appointment with your primary care doctor first, who may or may not refer you to a specialist (who also will need to be in network).
Medicare Supplement plans do not have these restrictions. With a Medigap policy, you can go directly to a specialist without needing prior authorization or a referral and that care and or service will not be denied, which helps you receive timely care when you need it.
Limited Access to Specialty Care
In most Medicare Advantage plans, access to specialty care is more restricted than in Original Medicare (and in turn, a Medicare Supplement plan). Not only are you limited to the plan’s network of providers, but certain specialties, treatments, or procedures may require pre-approval, referrals, or even higher out-of-pocket costs.
Specialty care often requires more complex or frequent visits. For example, if you have a chronic condition like heart disease, diabetes, or arthritis, you may need to see multiple specialists regularly. With Medicare Advantage, these visits might be subject to higher copays, stringent referral processes, or delays due to prior authorization. Moreover, certain specialists or treatments may be entirely excluded from coverage, leaving you responsible for the full cost of care.
In contrast, Medicare Supplement plans, combined with Original Medicare (Parts A and B), provide access to virtually all specialties without restrictions. You can see any specialist who accepts Medicare without the hassle of network restrictions or referral requirements, ensuring you get the care you need when you need it.
Higher Out-of-Pocket Cost
One of the biggest ‘selling points’ of a Medicare Advantage plan is the upfront cost; many plans offer $0 monthly premiums, which is great if you are on a fixed income. Unfortunately, the lower price does not equal a lower cost, and this is also one of the most common misconceptions about Medicare Advantage plans, as they often come with higher out-of-pocket costs. These plans generally require beneficiaries to pay copayments, coinsurance, and deductibles for services, which can quickly add up, especially if you need frequent medical care or expensive treatments.
For example, if you’re hospitalized, you may be required to pay a daily copayment for the duration of your stay. If you need outpatient services, you may face separate copayments for each doctor’s visit or medical procedure. The Medicare Advantage plan you are enrolled in will have an out-of-pocket maximum for the year, but those can be as much as $8,000. If you are on a low, fixed income, an $8,000 doctor’s bill is the last thing you will want.
Prescription drug costs under Medicare Advantage plans can also be unpredictable, with some plans requiring higher copays for brand-name drugs or medications not covered by the plan’s formulary. Additionally, the out-of-pocket cap for your medical cost do not apply to your prescription drug cost, and will be an extra expense that you need to budget for each year.
Medicare Supplement plans, on the other hand, are designed to fill in the gaps left by Original Medicare, covering many of the costs that Medicare does not pay. Depending on the Medigap plan you choose, you can have as little as a $240 maximum out-of-pocket cost each year, so long you pay the monthly premium required by the plan. This reduces your overall out-of-pocket expenses and provides you with more predictable costs for healthcare services.
Changes to Plans and Benefits
Medicare Advantage plans are not static; they can change from year to year. Insurers can modify the network of providers, the coverage offered, and even the cost-sharing requirements. These changes can also happen in the middle of the year, leaving you scrambling to find new coverage, or look for a new set of doctors and specialist (and new referrals!). This means that your plan could be very different from one year to the next, and the doctors or hospitals you rely on may no longer be part of the plan’s network.
Additionally, benefits such as dental, vision, or hearing coverage might change or be reduced, leaving you with unexpected out-of-pocket costs. In some cases, insurers may drop certain Advantage plans entirely, forcing beneficiaries to switch to a new plan, sometimes with less desirable benefits or higher costs.
Medicare Supplement plans provide greater stability. Once you’re enrolled in a Medigap plan, the benefits remain the same year after year, giving you more consistency in coverage. While premiums may rise over time due to inflation or increase due to your age, you won’t have to worry about sudden changes in the types of care you can access.
Prescription Drug Coverage Ins't Always Reliable
Many Medicare Advantage plans offer prescription drug coverage (Part D) as part of the package. However, the list of covered medications (known as the formulary) can change each year. Medications that are vital to your health might be excluded, or the cost of your prescriptions could increase, leading to higher out-of-pocket expenses. In addition, some Medicare Advantage plans impose restrictions such as requiring you to try cheaper medications before you can access more expensive treatments, which can delay necessary care.
With Medicare Supplement plans, you can purchase a standalone Part D prescription drug plan (PDP) that fits your specific medication needs. Since Part D plans are separate from Medigap, you have more flexibility and control over your prescription drug coverage. You can shop around for the best plan that covers the medications you take and offers the most affordable copays.
Flexibility & Peace of Mind
Perhaps the most compelling reason to choose a Medicare Supplement plan is the overall flexibility and peace of mind it provides. When you’re enrolled in a Medicare Supplement plan, you’re not constrained by networks, prior authorizations, or referral requirements. You have access to almost all healthcare providers who accept Medicare, and your costs are more predictable, allowing you to better plan for your healthcare expenses.
Medicare Supplement plans are designed to reduce financial stress by covering the gaps in Original Medicare and offering robust coverage for a wide range of medical services. The lack of restrictions and the simplicity of the coverage structure make Medigap plans a less complicated, more reliable option for many retirees.
Advantage Plan Now, Supplement Later
This is something that I hear from a lot of clients, they want to enroll in an Advantage plan, and then switch over to a Medigap plan in a few years when they need the coverage. This approach makes sense; when we are young, we don’t need to see a doctor as often, so why pay a monthly premium for a plan that you won’t use? At the same time, when we are older and need to seek care more, the reliability and consistent cost of a Medigap plan make more sense. So what’s the problem?
Medicare Supplement plans are offered by private insurance companies, and with the exception of a few times in your life, these companies are able to charge you more for coverage (based on either your age or your health), or even refuse to cover you. The exception to this is when you are first eligible for Medicare Part A and Enrolled in Part B; you will have a 6 month period starting on the date that you are first eligible, to enroll in a Medigap plan and receive guaranteed coverage at a standard rate. While this rate will go up as you age, it will not go up if you get sick. This makes this enrollment period one of the most pivotal times for many Americans as you may not be able to receive Medigap coverage later in life.
Are Medicare Advantage Plans All Bad?
No, there are times that these make a lot of sense. I advise all my clients to purchase the best plan they can afford. If you can’t afford the premium from a Medicare Supplement plan, then that isn’t an option for you.
Medicare Advantage plans also work really well with certain individuals that have certain chronic conditions or financial hardship. There are also a few plans designed for veterans that can provide benefits not found in TriCare for Life or through the VA.
For everyone else, my advice is always the same- buy a Medigap plan and keep it as long as you can afford it. Go see your provider often and request as many test as you can; it’s covered and getting in front of the problems when you have a Medigap is a lot less expensive than trying to solve a problem on a Part C plan.
Takeaways
While Medicare Advantage plans may appear to be an attractive option due to their low or $0 premiums, the hidden costs and restrictions can make them a less reliable choice for many people. The limited provider networks, the hassle of prior authorizations and referrals, the unpredictable out-of-pocket costs, and the restricted access to specialty care make Medicare Advantage plans difficult to navigate, particularly for individuals with complex healthcare needs.
Medicare Supplement plans, on the other hand, provide flexibility, fewer restrictions, and greater financial predictability. By covering many of the out-of-pocket expenses that Original Medicare doesn’t, Medigap plans can help you avoid surprises and ensure you have the comprehensive care you need without worrying about network limitations or administrative barriers.
For those who value freedom of choice, stability in coverage, and peace of mind, Medicare Supplement plans prove to be the better option. Before making a decision, it’s essential to carefully assess your healthcare needs and budget to determine which plan is best for you, but in many cases, Medigap offers superior coverage and a clearer path to the care you deserve.
If you have questions or if you would like to talk, feel free to reach out and schedule a time that works best for you.
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