More Than Half of Seniors 'Stuck' in Medicare Advantage Plans

In 2023, more than half of seniors were enrolled in Medicare Advantage plans. For many seniors, the plans hid some serious problems they only learned of later on.

Seniors are routinely barraged with a range of Medicare Advantage ads, and they often sound too good to be true. Boasting better prices and a wide range of services, many seniors quickly decide to switch to a plan that saves them money upfront.

"They're enticing because many do not charge premiums and include other services like dental care," attorney Loretta Kilday told Newsweek. "This simplicity and extra benefits prove to be a big draw, especially for people who do not have urgent health problems."

KFF reported 9,500 daily ads for Medicare Advantage during seniors' open enrollment period in 2022, and a survey by the Commonwealth Fund discovered 30 percent of seniors received seven or more phone calls from Medicare Advantage salespeople for the 2024 coverage period alone.

The ads tend to neglect to mention the difficulty most seniors face if they want to return to traditional Medicare. They also don't say that for some, opting for these plans will make your treatment much farther away and not with a doctor of your choice.

"Such plans tend to have small networks where specific services require prior approval, thus delaying treatment," Kilday said. "Seniors, especially when their health degrades more, they feel stuck in these plans."

According to a Senate Finance Committee report by Oregon Democratic U.S. Senator Ron Wyden, customer complaints about Medicare Advantage's marketing skyrocketed to double from 2020 to 2021, bringing the total to 41,000.

Open enrollment meant "the start of a marketing barrage as marketing middlemen look to collect seniors' information in order to bombard them with direct mail, emails, and phone calls to get them to enroll," Wyden said in a letter to the Centers for Medicare and Medicaid Services (CMS).

While CMS responded by outlining new rules against Medicare Advantage plans, the organization did not ban list acquisitions from third-party Medicare Advantage marketing organizations as Wyden requested.

And still, health insurance companies spend millions lobbying lawmakers, with one report finding $33 million was spent by insurers in just the first three quarters of 2023.

Some Americans might not even be aware of the difference between traditional Medicare and privately run Medicare Advantage plans due to how widespread the ads for the latter are.

Those who do end up signing up for Medicare often don't realize they gave up the larger Medicare provider network and can no longer choose the doctor they'd like until it's too late.

"Remember, Advantage plans are 'managed care' and you have to be willing to follow their rules," Stephanie Pogue, a certified Medicare insurance planner, told Newsweek.

"People usually get the care they need with an Advantage plan but not always with the doctors or in the facilities they want."

Those who need expensive medical care in Medicare Advantage often have to wait for prior authorization approval, which adds an obstacle to their healthcare, something the marketers never mention.

One in five seniors reported issues getting care due to the prior approval process, according to a recent Retirement Living study. Another study found half of beneficiaries switched to a different plan after five years.

The marketing practices often go a step further when it comes to those eligible for both Medicare and Medicaid. Medicare Advantage marketers often neglect to explain that low-income seniors are also eligible for that program, which is more expansive and covers more health conditions and treatments, experts say.

Chris Fong, the CEO of Smile Insurance Group, said many of his clients were not aware before signing up or don't even know when they have signed up for Medicare Advantage.

"A lot of the complaints we have heard come from clients who were called on the phone and convinced into enrolling whether knowingly or unknowingly," Fong told Newsweek.

Moving forward, he said there needs to be regulation to solve the problem. For now, seniors need to be on guard whenever they answer the phone.

"The best advice we have is to make sure to ask all of the right questions."

If you have a Medicare Advantage story you'd like to share, please contact us at personalfinance@newsweek.com.