Shopping for Medicare Advantage: 6 pitfalls to avoid

According to a 2022 analysis by KFF, a health policy nonprofit, only 3 in 10 Medicare beneficiaries shop around during open enrollment, and only 1 in 10 Medicare Advantage enrollees voluntarily switch plans. However, according to a 2020 National Bureau of Economic Research analysis of Medicare Advantage plan choices, more than half of beneficiaries overspent by more than $1,000 as a result of the plan they chose.

Medicare open enrollment runs from October 15 to December 7, giving people with Medicare the opportunity to change their plans for the coming year. Although potential Medicare Advantage enrollees may be swayed by $0 premiums and extra benefits such as vision and dental coverage, there are other factors to consider when selecting next year’s coverage.

Here are some things to avoid when shopping for Medicare Advantage this fall.

1. Thinking Medicare Advantage is Medicare

If you’re thinking about getting Medicare Advantage, keep in mind that it’s not the same as government-provided Medicare. It provides the same benefits as Medicare, but it is managed by private health insurance companies and operates differently.

“You’re essentially taking the Medicare coverage that you’ve been provided by the government and turning it in,” says Melinda Caughill, co-founder and CEO of 65 Incorporated, which provides Medicare guidance.

You can return to Original Medicare during each year’s open enrollment period, but once you’ve passed the one-time Medigap open enrollment period, you may not be able to qualify for an affordable Medicare Supplement Insurance, or Medigap, plan. (Medigap covers certain out-of-pocket expenses that Original Medicare does not cover.)

2. Assuming your doctors are in network

Medicare Advantage plans work through networks of medical providers, and you must usually see in-network doctors for covered care.

“A lot of people don’t realize that — especially those $0-premium plans — they tend to have fairly confined networks,” says Emily Gang, CEO of the Medicare Coach, a Medicare guidance website. “You want to double-check that your doctor is actually an approved provider in that network.”

Sarah Murdoch, director of client services for the Medicare Rights Center, a nonprofit consumer advocacy organization, recommends asking your providers what insurance they will accept in 2024. It’s less work than checking each plan’s network individually.

3. Not checking your drug coverage

Medicare Part D prescription drug coverage, like network providers, can change from year to year. In 2024, your drug plan may cover one of your medications differently, leaving you with higher out-of-pocket costs than you anticipated.

“If you take even one brand name medication, your need to compare plans is incredibly high,” Caughill said. You didn’t include any brand names on your list? If you take five or more medications in total, shop around.

4. Buying for the dental benefits

Medicare Advantage plans typically include non-Original Medicare benefits such as dental, vision, and hearing coverage. These extras may be tempting, but don’t let them influence your plan selection.

“First of all, it’s health insurance — so how is it going to cover your health care providers and your medications?” Katy Votava, president and founder of Goodcare, a consulting firm focused on Medicare economics, has a doctorate in health economics and nursing. “If you choose [your plan] for a benefit that isn’t health insurance, you’re frequently making a mistake.” And the dental benefit in all of these plans is fairly limited — a couple of cleanings and some bite wings.”

5. Looking at the premium only

The vast majority of Medicare Advantage enrollees are in no-fee plans, which means they pay nothing each month. “When people see the $0 premium, they think, ‘Oh, it’s free,'” Gang says. “And it’s not.”

Before you sign up, look into the rest of the plan’s costs, such as deductibles, copays, coinsurance, and the out-of-pocket maximum, which is the most you could spend on covered care in a year. In 2023, the out-of-pocket maximum for in-network care could be as high as $8,300.

6. Buying because your friend has it

During open enrollment, people who are eligible for Medicare are bombarded with information, which can be overwhelming. “They don’t shop,” says Votava. “They go with name recognition or what their friend has.”

The better option is to concentrate on your own situation and find a plan that meets your requirements.

If you require assistance, contact your State Health Insurance Assistance Program (SHIP) for free Medicare advice. Just don’t wait until the last minute, because appointments fill up quickly, according to Votava. “If you need individual help, you’d better get on the list.”