By J. Matthew Illian
NEW YORK ( AdviceIQ) -- Medicare Advantage has disadvantages that make health care more expensive for seniors. Recent changes to the laws such as Obamacare are likely to raise costs. Most retirees are better off with regular Medicare.
Medicare Advantage is an option that replaces Original Medicare parts A (hospital care) and B (doctor visits) and often includes part D (prescription coverage) as well; it goes through a private operator, while the government runs part A, B and D.
The primary reason some choose Medicare Advantage is to minimize their monthly costs. It covers everything Medicare covers, but the devil is in the details. This monthly premium advantage could quickly become a disadvantage in several different scenarios.
One reason you should avoid Medicare Advantage is because your options become limited to a predefined private health care network. Seeking care outside of this network quickly leads to escalating financial woe.The limitations of this network go beyond asking your primary care physician if he or she participates. In life-threatening situations, a limited network can put you in a terrible predicament. If one day you need a heart transplant or are stricken with a rare form of cancer, you may be stuck paying out-of-network fees if you seek a doctor or treatment center with the most expertise. You can bet that the Johns Hopkins Hospital has never heard of your local insurance network. A second disadvantage of Medicare Advantage is relevant if you spend long periods away from home. Medicare Advantage plans cover emergency services, so there's no reason to avoid taking one cruise, but all other nonemergency services are charged at the out-of-network price. Some special policies allow snowbirds from the Northeast to remain in-network when they spend the winter in Florida and still get regular care, but this applies only to a limited set. If your vacation home is out of state, expect to pay a hefty price for physical therapy, doctor visits and prescriptions. A third larger problem faces Medicare Advantage participants as Washington looks for ways to cut the budget. The government pays a hefty subsidy to private health insurers for each Medicare Advantage plan, and these subsidies are scheduled to be reduced drastically in the coming years. The largest insurer, UnitedHealth, expects a 4% drop in subsidies beginning next year, while health care costs are projected to rise 3%, according to the company. Much of these cuts were part of President Barack Obama's Affordable Care Act.