Hoping a Medicare Advantage (Part C) plan is going to pay off is as risky as rolling the dice. Insurance companies entice you with a number of Medicare Advantage gimmicks to get you to sign up, but there’s usually a catch. A 2022 report by the U.S. Senate Committee on Finance uncovered a number of their deceptive practices. This is what you need to know.

Marketing practices by private plans (or their agents and brokers) need to be reined in: bad actors are trying to cash in by taking advantage of loopholes and loosened rules around marketing and enrollment to beneficiaries – badgering seniors on the phone, confusing them on television, and inundating them with mountains of mail. An increasing number of marketing materials are fraudulent or deceptive, undermining beneficiary access to care and trust in the Medicare program.

U.S. Senate Committee on Finance

Extra Benefits

Original Medicare does not cover everything (i.e., dental, hearing, and vision benefits are off the table), but it does cover a lot. Medicare Advantage plans can offer supplemental benefits for services you may need. However, not everything you hear on TV, radio, or social media ads is 100% true.

Watch out for these Medicare Advantage gimmicks:

• Drug discounts. You may hear promises for a 75% discount on your prescription drugs. However, whether you have a Part D drug plan or a Medicare Advantage plan with drug benefits, EVERYONE gets a 75% discount on brand-name drugs when they’re in the donut hole. This is not an extra benefit.
• Free preventive services. Don’t let the word “free” win you over. As long as your doctor accepts assignment, meaning they agree to charge no more for their services than what Medicare recommends, you can get free preventive services under Original Medicare too.
• Services not offered by all plans. Not all supplemental benefits are available with all plans but ads often imply they are. When plans do include these benefits, they may be limited and some plans may require a prior authorization each time you use one. This can make it difficult for you to make use of them at all.

Prior Authorizations

Speaking of prior authorizations, it’s important to highlight that 99% of Medicare Advantage plans use them. This equates to a whole lot of extra paperwork to get a specific test or service covered. That can cause a delay in getting any medically necessary services you need.

Medicare Advantage plans are legally required to cover everything that Original Medicare does. Unfortunately, a recent report by the Office of the Inspector General found that as many as 13% of prior authorization denials are for services covered by Original Medicare. Put another way, some Medicare Advantage plans are denying coverage that was supposed to be guaranteed. Don’t get short changed.

Zero-Premium Plans

One of the most common Medicare Advantage gimmicks is to say you won’t have to pay a premium. You get all these extra benefits for free!

Unless you qualify for a Medicare Savings Program, everyone pays premiums. While most people do not have to pay Part A premiums (if they or their spouse worked 10 years in Medicare-taxed employment), you will pay Part B premiums based on your income tax returns from 2 years ago. You may not have to pay a Medicare Advantage premium on top of that, but it is misleading to say there will be no premiums at all.

Plus, the language here can be tricky. Some people hear “zero-premium” and think “zero costs”. I can assure you your plan is not free. You will continue to pay deductibles, coinsurance, and copays for any services you use.

Part B Premium Reduction

Some plans offer to pay your Part B premium for you. In 2022, that was as much as $170.10 per month! Known as Medicare Give Back, Medicare Premium Reduction, or a Medicare Buy Back plan, this sounds tempting.

The Medicare Advantage gimmick is what the TV, radio, and social media ads leave out. The maximum benefit allowed is the premium set for people in the lowest Part B income bracket. If you earn at a higher income level, you will have to pay the difference. Plus, not everyone qualifies for the full premium benefit.

It may not be worth signing up for one of these plans if you only qualify for a small amount of the Part B premium reduction. That is because these plans usually rely on higher cost-sharing to make up the difference. That means deductibles, coinsurance, and copays tend to cost more than other Medicare plans, i.e., your out-of-pocket costs go up. You may think you’re saving but you will pay more when you actually need care.

Star Ratings

Medicare Advantage plans have not been doing so great lately, and it’s not surprising that TV, radio, and social media ads fail to mention how many people are leaving them behind.

The Centers for Medicare & Medicaid Services released their annual Star Rating report. On a scale of 1 to 5, the report assesses a plan’s ability to deliver quality care. It also takes customer satisfaction into consideration.

In 2022, only 0.42% of Medicare Advantage plans earned a star rating of 2.5 or less. The number jumped to 8.09% for 2023. That’s a near 20-fold increase in lower quality plans! Five-star plans decreased from 15.71% to 11.24%, 4.5-star plans from 20.38% to 13.21%, 4-star plans from 32.27% to 26.82%, and 3.5-star plans from 25.90% to 22.88%.

 

Deceptive Marketing Practices Flourish in Medicare Advantage. (2022). U.S. Committee on Finance. https://www.finance.senate.gov/imo/media/doc/Deceptive%20Marketing%20Practices%20Flourish%20in%20Medicare%20Advantage.pdf

FACT SHEET: 2023 Medicare Advantage and Part D Star Ratings. CMS.gov. https://www.cms.gov/files/document/2023-medicare-star-ratings-fact-sheet.pdf

Grimm C. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns about Beneficiary Access to Medically Necessary Care. (2022). Office of Inspector General. https://oig.hhs.gov/oei/reports/OEI-09-18-00260.pdf

Medicare Advantage in 2022: Premiums, Out-of-Pocket Limits, Cost Sharing, Supplemental Benefits, Prior Authorization, and Star Ratings. (2022). KFF. https://www.kff.org/medicare/issue-brief/medicare-advantage-in-2022-premiums-out-of-pocket-limits-cost-sharing-supplemental-benefits-prior-authorization-and-star-ratings/