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Usually, after age 65, you have two Medicare options: Traditional Medicare (Parts A<\/a>, B<\/a> and D<\/a> and often a Medigap plan<\/a>) or a private health insurer\u2019s Medicare Advantage plan<\/a>, also called Part C. But increasingly, people with retiree health benefits from their former employers aren\u2019t given that choice.<\/p>\n Instead, they\u2019re told they can only enroll in a Medicare Advantage plan<\/a>, with its limited network of doctors and hospitals\u2014even if they\u2019d prefer going with the less restrictive Traditional Medicare.<\/p>\n Reject the Medicare Advantage plan, they\u2019re told, and they\u2019ll lose their retiree health benefits, sometimes in perpetuity.<\/p>\n \u201cIt\u2019s a lot to ask someone potentially to consider giving up their retiree benefits,\u201d says Meredith<\/a> Freed, a senior policy manager with the Program on Medicare Policy at KFF, a nonpartisan health care policy research, polling and journalism group.<\/p>\n A new KFF report<\/a> found that 12 states now offer only Medicare Advantage to their Medicare-eligible retirees, a 50% rise from 2016. The 12 states: Alabama, Arizona, Colorado, Connecticut, Georgia, Illinois, Kentucky, Maine, Missouri, New Hampshire, Pennsylvania and West Virginia.<\/p>\n While only 21% of big employers offer health benefits to retirees (down from 66% in 1988), roughly two-thirds of large companies that offered retirees Medicare Advantage<\/a> in 2023 didn\u2019t permit them to enroll in Traditional Medicare, according to KFF. In 2022, just 44% of those firms allowed Medicare Advantage-only.<\/p>\n These shifts to Medicare Advantage can save money for the companies and state and local government employers; New York City Mayor\u2019s Office estimated switching their 250,000 city employee retirees would save the $600 million annually.<\/p>\n On the plus side, a Medicare Advantage plan usually has benefits not available through Traditional Medicare: dental<\/a>, vision<\/a>, and hearing<\/a>, for example.<\/p>\n A Medicare Advantage plan also often means lower out-of-pocket costs than the combination of Traditional Medicare and Medigap (a Medicare Supplemental plan to help cover what Parts A and B don\u2019t).<\/p>\n But here\u2019s the surprise the KFF researchers found on that score: Although many Medicare Advantage plans available to anyone 65+ have $0 premiums, this isn\u2019t the case for most of the 12 states offering retirees only the Medicare Advantage option. Just three of them have $0 premium plans for retirees initially.<\/p>\n You may encounter delays and possible treatment denials due to prior authorization\u2014a cost-control technique requiring beneficiaries to get preapproval in order for the insurer to cover medical costs. Original Medicare rarely requires prior authorization.<\/p>\n Second, Medicare Advantage can mean not being allowed to go to your preferred physicians, hospitals or specialty centers or paying extra because they\u2019re out-of-network.<\/p>\n \u201cHospitals are becoming increasingly frustrated about prior authorization and claim denials, saying they won\u2019t contract with a Medicare Advantage plan,\u201d says Paul Ginsburg, a USC professor of health policy.<\/p>\n In some rural areas, few or zero doctors and hospitals participate in Medicare Advantage plans the companies and government employers offer retirees.<\/p>\n Some former state workers permitted to enroll only in Medicare Advantage plans can go to out-of-network health providers for the same cost as in-network, Freed says. But those doctors can choose not to accept the coverage.<\/p>\n Or they can require retirees pay upfront and try to get reimbursed later by the plan. \u2018That\u2019s kind of administratively complex for people and can potentially be a lot of money upfront to have to pay out-of-pocket,\u201d Freed says.<\/p>\n Another con: If you later decide you want to replace Medicare Advantage with Traditional Medicare\u2014foregoing your retiree health benefit subsidies\u2014you might be unable to get a Medigap plan.<\/p>\n That\u2019s because in 46 states, Medigap approval generally isn\u2019t guaranteed after six months of enrolling in Medicare Part B; the exceptions are Connecticut, Massachusetts, Maine and New York.<\/p>\n In the 46 states without a guarantee, apply for Medigap more than six months after turning 65 and you could be denied the policy due to a pre-existing condition, your age, or where you live.<\/p>\n\nThe shift to Medicare Advantage-only for retirees<\/strong><\/h2>\n
Medicare Advantage<\/strong> comes with tradeoffs<\/h2>\n
Potential downsides of Medicare Advantage<\/strong><\/h2>\n