Medicare Advantage vs. traditional Medicare: Two stories of a successful switch

Switching out of Medicare Advantage, the private version of Medicare, into traditional Medicare with a Medigap plan is not always easy.

Recently I connected with two men who made the switch successfully. Here are their stories — plus a list of the things that can be denied because of prior authorization. It will make you think.

In Medicare Advantage, the privately run program parallel to traditional, or original, Medicare, the for-profit insurance companies get paid by the government to insure older Americans. Medicare Advantage plans may have lower premiums than traditional Medicare, but they also have smaller networks and require prior authorization. Traditional Medicare, administered by the Centers for Medicare and Medicaid Services, often has holes in coverage too, so enrollees often buy a supplemental Medigap plan to cover the costs that traditional Medicare does not pay, and also a Part D drug plan, which Medicare Advantage often includes without charge. On traditional Medicare, you can see pretty much any doctor you want to see.

Sometimes people take Medicare Advantage, and then realize that they want to switch back to traditional Medicare to avoid the denials and narrow networks, and to have the choice of seeing any doctor. With the growing reluctance of doctors and hospitals to take Medicare Advantage, it’s a trend. But people who choose to switch to traditional Medicare often find barriers in gaining coverage.

During the six months after you sign up for Part B (traditional Medicare), Medigap insurers cannot reject you, or charge more, because of pre-existing conditions. After that window, you can be rejected or charged more, unless you live in one of four states (Connecticut, Massachusetts, Maine and New York) that provide some level of guarantee to enroll at a later time with protections for pre-existing conditions.

For everything you need to know about Medicare, here’s our handbook on “How much does Medicare cost?” and here’s a recent update on Medicare Advantage — “Denials, demographics and quality of care.”

A doctor’s note

My friend Bart Windrum, who lives in Colorado, wrote: “For some years I pursued other-than-statin pathways for congenitally increasing cholesterol. I paid out of pocket for MRI scans and received annual reports of benign percentage increases in relative calcium volume. Somewhere along the way I saw a cardiologist to scope the scene that way.

“With zero cardiac life events, treatments, impairments and unbeknownst to me, he entered into my medical record that I had heart disease (glibly stating during our consult that ‘everyone’ has heart disease).

Like many, Windrum had intended to stay in Medicare Advantage for five years, to save premiums, and then switch to traditional Medicare. He decided to switch after three years because of the pre-authorization issue.

“So when I applied for Medigap, United accepted me but at a 3X increased premium due to pre-existing condition,” he wrote. “That would’ve been a baseline ~$350/mo premium plus increased for the rest of my life.

An appeal

“I appealed and had 3 medpros in my corner: my primary/gerentologist, the calcium folks and 3-4 years of scan results, and the cardiologist. The first two wrote letters. The cardio required me to undergo a stress test first; I successfully and uneventfully treadmilled and he added his letter. United quickly admitted their mistake and enrolled me at the normal premium.

“of course I also submitted the 3-4 years of MRI calcium score tests/results with those 3 letters.

I mentioned to him that we had heard increasingly of people having a hard time switching off of Medicare Advantage — which has been marketed as a possible “no premium” option, with the addition of possible options like dental, vision and hearing coverage, with things like “meals delivered to your home!” and other potential benefits.

Windrum added: “That is no surprise, it’s built in. I describe it the same insurance as folks have had to buy all their working lives, albeit at less cost. But all the same traps, plus a few enticements.

“They entice folks w/$0 premium and, here at least, a very big network (which happened to exlude the major regional university system 😉 ). You have to know what game you’re playing; it’s always a risk.”

Another who switched

Another friend in Colorado was able to switch out of Medicare Advantage relatively easily. He wrote:

“The process is more complicated than i had imagined and answers not often readily available.

“1. first of all i would encourage anyone negotiating Medicare options and plans to find an expert source of knowledge that will help you choose what plans to look at.

“i happened to stumble into United Medicare Advisors and found them extremely helpful. Both agents I talked to were licensed insurance agents, and i was impressed with their knowledge base. both agents i talked to had more than ten years experience and easily answered all my questions.

“i have had a Humana Advantage plan for 9 years and have been more than satisfied with my plan but decided to switch back to a regular Medicare plan with Medigap G supplement. I was advised by several folks this would not be possible but indeed i did switch to a Humana (non Advantage) medigap supplement G without difficulty and was accepted in 48 hours.

Number of medications

“Here are crucial issues. You will slip through if you are on two or less meds for, as an example, hypertension or diabetes, and have no severe associated complications like renal failure on dialysis, stroke, congestive heart failure, etc. The two-medication limit is important. If you exceed the limit you will be subject to scrutiny by underwriting and likely to be required to pay higher premiums or even be denied.

“For this reason it is critical that you be aware what diagnosis are on your chart even if expired. Review these entries with your doctor or nurse and get rid of inactive diagnosis that might complicate or confuse the underwriters. In some cases a diagnosis might be replaced with a less scary entry such as ‘abdominal pain’ instead of ‘ulcerative colitis,’ etc The insurance companies are obviously prowling for evidence that you might cost them a bundle down the line.

“3. Use an insurance consultant to pick a drug plan that suits your needs and may be cheaper. In my case despite have a Humana medigap plan i was enrolled in a Wellcare drug plan that dropped my annual anticipated drug costs by almost 100%. This is the kind of information that you simply don’t have access to. USE A WELL INFORMED INSURANCE AGENT. My negotiations with United Medicare Advisors was all handled over the phone and as pleasant as can be expected.

“Good luck and be PROACTIVE !!”

I will say that I am glad his experience was good. We hear that often Medicare insurance brokers will sell you an Advantage plan because the commission is better — the plan is better for them, but worse for you. The Biden administration has proposed a crackdown, but meanwhile, the broker you talk to might steer you towards Medicare Advantage because it makes her more money. Be careful.

What prior authorization is required?

Often Medicare Advantage and Medicare regulations are governed by federal and state requirements, but the courts are increasingly taking a role. The topic of Medicare Advantage vs. traditional Medicare came up recently in a lawsuit by retirees in Cortlandt County, New York, that former insurance company exec turned whistleblower Wendell Potter wrote about in his Substack newsletter.

“A few weeks ago, I was asked to submit an affidavit on behalf of plaintiffs in a lawsuit against Cortland County, which had been planning to steer retired county employees into a Medicare Advantage plan operated by UnitedHealthcare,” Potter wrote. “Just this week, county officials said they were ditching those plans, at least for the coming year.

“At the heart of this and similar lawsuits across the country — including one in New York City, which I’ve written about — is a prevalent industry practice called ‘prior authorization.’ Almost all insurers maintain a long list of procedures, tests and medications that the insurers insist must be approved in advance before they will pay a dime.”

He said the retirees sought to find what procedures would be subject to prior authorization. The county, he said, wrote to the retirees in reply to a question: “UnitedHealthcare is unable to provide a document which shows all the procedures which will require prior authorization.”

But later, he wrote: “UnitedHealthcare’s Evidence of Coverage Document for 2024 (Exhibit “3”), which was only provided to plaintiffs’ counsel on Oct. 16, 2023, provides a long, although possibly incomplete, list of procedures, tests and medications subject to prior authorization.

“The list includes:

Cardiac rehabilitation services
Intensive cardiac rehabilitation services
Chiropractic services
Outpatient diagnostic colonoscopy
Supplies to monitor blood glucose
Continuous glucose monitors
Therapeutic shoes for people with diabetes
Durable medical equipment
Diagnostic hearing and balance evaluations
Home infusion therapy
Inpatient services in a psychiatric hospital
Medicare Part B drugs and non-chemotherapy drugs to treat cancer
Medicare-covered chemotherapy drugs to treat cancer and the administration of that drug
Opioid treatment services
Outpatient diagnostic tests and therapeutic services and supplies, including x-rays and other radiation therapies
Lab tests and other diagnostic tests
Outpatient mental health care
Outpatient rehabilitation services
Outpatient substance abuse services
Outpatient surgery and other medical services at hospital outpatient and ambulatory surgical centers
Partial hospitalization services and intensive outpatient services
Basic hearing and balance exams
Some telehealth services
Second opinions prior to surgery
Non-routine dental care
Monitoring services in a physician’s office or outpatient setting
Medically necessary medical and surgical services that are provided at home or nursing home
Prosthetic devices
Pulmonary rehabilitation services
Skilled nursing care
Supervised exercise therapy
Outpatient services provided by an ophthalmologist or optometrist
Eye exams for people with diabetes”

In other words, pretty much everything except for maybe an emergency room visit.

Potter concluded: “A few weeks ago, Reps. Ritchie Torres (D-NY) and Nicole Malliotakis (R-NY) introduced The Right to Medicare Act, a bipartisan bill that would prohibit a public or private employer from involuntarily forcing seniors from their traditional Medicare plan to Medicare Advantage plans without a choice. It would instead require employers to offer seniors an opt-in option to be shifted over to Medicare Advantage. It would also put Congress on the record as affirming that all U.S. seniors have a right to choose for themselves between traditional Medicare and Medicare Advantage. “