Unhappy with your Medicare Advantage plan? Now's your chance to escape

If your Medicare Advantage Plan isn’t quite what you expected, don’t panic — you’re not locked in quite yet.

The deadline to swap your existing Advantage plan for one you like better (or switch to basic Medicare) isn’t until March 31.

That said, you have to make it count: You only get one switch. So before you make a decision you can’t reverse until next year, make sure you’ve considered all the angles.

Why you might want to switch

This year, 29.5 million people are expected to be enrolled in a Medicare Advantage plan, up from 26.9 million last year, according to the Centers for Medicare and Medicaid Services (CMS).

Some of them will decide to make a change for a variety of reasons, ranging from gaps in drug coverage to a limited provider network.

“They might unknowingly join a plan that one of their doctors doesn’t participate in,” Danielle Roberts, cofounder of insurance firm Boomer Benefits, writes on her blog.

“Some might also forget to check the plan’s drug formulary to make sure it covers all of their important medications” — and at a fair cost.

Plus, beneficiaries are often surprised to learn that Medicare Advantage plans require copays on the back end. They may be so focused on the plan’s low premiums that they don’t fully realize how it works.

“Then they have a hospital stay and get a bill for $1,400 dollars and are shell-shocked,” Roberts says.

How costs can change

With a Medicare Advantage plan, covered benefits and costs can change from year to year. You might suddenly discover that, thanks to a shift in coverage, a drug you rely on has doubled or quadrupled in price this year.

That's why the CMS says enrollees should look at their coverage choices annually to find the best health care option for their needs.

The average monthly premium among all Medicare Advantage enrollees, including those who pay no premium, is expected to fall this year to $19 per month, down from $21.22 last year, according to CMS.

Over half of private Advantage plans don’t charge monthly premiums — other than for Part B, which helps cover services like doctor visits, outpatient care, lab tests and a few other things.

And most people don’t pay premiums for Part A, which covers hospital expenses and some home health services.

Part B premiums, however, are way up. The CMS says the standard Part B premium will increase to $170.10 in 2022, up 14.5% over last year. The increase is, in part, due to costs associated with a new Alzheimer’s drug — though the drug and rate hike are now under review.

What to look for in a Medicare Advantage plan

Advantage plans offer a range of supplemental benefits, and most include prescription drug coverage.

But before you settle on a plan, you should understand the coverage rules that may affect how much you’ll be paying in premiums and other costs.

If you take certain medications regularly, you’ll want to know if they’re covered in your plan. And you’ll want to know what dental and vision services are offered.

Your out-of-pocket costs in a Medicare Advantage Plan depend on a variety of factors, including whether your plan charges a monthly premium, if it has a yearly deductible and what copayments you’re responsible for.

Unlike basic Medicare, Medicare Advantage plans have annual out-of-pocket limits. The amount can not exceed $7,500 for in-network services and $11,300 for out-of-network services.

It’s a lot to consider, but there are websites available that can help walk you through the process.

Don't dismiss traditional Medicare

While Medicare Advantage plans typically have lower premiums and cap your out-of-pocket costs, you don’t always come out ahead.

Medicare Advantage plans have pre-authorization and in-network requirements. And thanks to daily copays, you could end up paying more with a Medicare Advantage plan if you land in hospital with a serious illness.

Facing a five-day hospital stay, half of Medicare Advantage enrollees incur higher costs than traditional Medicare beneficiaries, a Kaiser Family Foundation study found.

Where you live is another factor to consider. Medicare Advantage enrollees who reside in rural areas can struggle with limited benefits and restricted options for providers.

Advantage enrollees in rural areas switch to traditional Medicare at twice the rate of those who live in cities or suburbs, according to a recent report in the journal Health Affairs.

How to make a change

The Medicare Advantage Open Enrollment Period runs from Jan. 1 through March 31. If you’re already enrolled in one of the plans and you want to switch to a new one, you can do so during these three months.

After you sign up for a new plan, the government will automatically disenroll you from your old plan as soon as your new coverage starts.

On the other hand, if you want to switch over to traditional Medicare, contact your current plan or call 1-800-MEDICARE. But you’ll need to do a little more work to fill in the gaps.

If you still want prescription drug coverage, you’ll also need to sign up for a standalone Part D plan. (Remember that if you go a couple months without drug coverage, you could suffer a late-enrollment penalty tacked on to your premiums for life.)

You might also need to go through underwriting to qualify for a supplemental “Medigap” plan — those help cover some of the cost-sharing involved in traditional Medicare, like deductibles, copays and coinsurance.

And one last side note: If you didn’t enroll in Medicare at all when you were first eligible (and you don't qualify for an exception), you can still sign up in the current enrollment period. Your coverage will take effect July 1.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.