Are you considering signing up for a Medicare Advantage plan? A growing number of seniors are choosing these private insurance plans, which typically offer lower out-of-pocket costs – and sometimes more services – than traditional Medicare. While lower costs sound good, there are downsides and risks to Medicare Advantage. You should know what they are and how they might affect you and your healthcare if you decide to enroll. (For more, see Medigap vs. Medicare Advantage: Which Is Better?) Medicare Advantage Plans Explained First, it’s worth understanding just what a Medicare Advantage plan is and how it works. Medicare Advantage is an alternative to traditional Medicare. It is administered by private insurers rather than by the government. Medicare Advantage plans are typically either health maintenance organizations (HMOs) or preferred provider organizations (PPOs). Both offer hospital and medical coverage (Medicare Part A and Part B). In many cases they also offer prescription drug coverage (Medicare Part D), dental and vision coverage and even gym memberships. Another reason many seniors select an Advantage plan is because it eliminates the need for Medigap (Medicare Supplement) insurance. Some plans even cover all or part of the prescription drug coverage “doughnut hole.” Into the Great Unknown However, as the Henry J. Kaiser Family Foundation noted in a report titled Medicare Advantage Hospital Networks: How Much Do They Vary?, there is so much variation in the size of hospital networks and the services they offer, depending on the plan, that the whole selection process can become quite confusing. Worse yet, you may not even be able to see the differences between plans when reviewing plan directories – many of which are out of date or contain incorrect information, according to the Kaiser study. Size Matters The Kaiser study looked at 409 Medicare Advantage plans in 20 counties. Of those plans, 23% featured what Kaiser defined as broad networks that included 70% or more of the hospitals in the county. Roughly 61% had medium-size networks that included between 30% and 69% of all hospitals in the county. About 14% had what Kaiser characterized as “narrow” networks, with less than 30% of hospitals included, and 2% had “ultra-narrow” networks including less than 10% of hospitals in a given county. Traditional Medicare is likely to give you a wider choice of hospitals (including facilities all over the U.S., not just in your county), but the only way to find out for sure is to check with the hospitals you'd hope to use. Services Might Matter More Kaiser found that, in general, size relates to services offered, which can be important if you have a rare or complicated condition. Although some of the plans with narrow networks received good ratings from the Centers for Medicare and Medicaid Services (CMS) for preventive care and customer service, narrow networks tend to exclude hospitals that specialize in treating complicated conditions. Specifically, Kaiser said, 75% of narrow networks excluded National Cancer Institute Cancer Centers, 49% excluded academic medical centers and 21% contained no hospitals with accredited cancer programs. Costs Can Escalate What all this means is that if you enroll in a Medicare Advantage plan whose hospital network doesn’t treat your condition, you may have to go “out of network” at great personal expense or, worse yet, avoid treatment altogether. This is why knowing as much as possible about your Medicare Advantage plan, including the size and services offered by the hospital network, is so important to your financial and physical health. Improvements Are Needed Kaiser concludes that CMS needs to review provider directors more frequently than it does now, to spot and correct errors and omissions. In addition, Kaiser believes CMS should review Medicare Advantage requirements and beef them up as needed. Other suggestions include making it easier for consumers to compare Medicare Advantage plans, requiring all plans to follow a uniform format and developing a uniform “size-of-plan” network comparison tool. For its part, CMS says improvements are already underway. In 2017, for example, plans that wish to expand will have to submit their entire network for review by CMS. It’s on You Meanwhile, when evaluating a Medicare Advantage plan, you should ask questions when something is unclear. For example, ask how frequently the plan you are considering refers patients out of network for care. For additional help, contact the State Health Insurance Assistance Program (SHIPS) for your state. You can conduct a Google search or use this handy guide. The Bottom Line Medicare Advantage plans can be cost effective while providing the care you need. If considering such a plan, be sure to do your homework and stay alert for changes from CMS that will make the comparison of Medicare Advantage plans easier for you. Finally, it’s worth noting that if you find your Medicare Advantage plan to be inadequate, you can switch to another Advantage plan or to traditional Medicare during the annual election period that takes place between Oct. 15 and Dec. 7 each year. If you're in an a Medicare Advantage plan, use that time to review the size of your plan's hospital network and compare it to other options.