The most costly Medicare Advantage mistakes happen before you ever use your plan. According to the Kaiser Family Foundation, over 54% of Medicare beneficiaries are now enrolled in Advantage plans, up from 19% in 2007. But a Commonwealth Fund survey found that 1 in 5 Medicare Advantage enrollees reported problems with coverage denials or unexpected costs in the past year.
The issue isn't that Medicare Advantage is bad, many plans offer excellent value. The issue is that choosing the wrong plan, or not understanding how your plan works, can cost you thousands of dollars per year. Here are 7 mistakes to avoid.
Mistake #1: How Does Choosing Based on Premium Alone Cost You Money?
A $0 premium is the most common reason people choose a specific Medicare Advantage plan, and it's the most common reason they end up overpaying. According to CMS data, the average Medicare Advantage enrollee pays $0 to $35/month in premiums but faces out-of-pocket maximums ranging from $3,900 to $8,850.
Here's the math most people miss: a $0-premium plan with an $8,850 MOOP could cost you $8,850 in a year with a major health event. A $35/month plan ($420/year) with a $3,900 MOOP would cap your costs at $4,320, saving you over $4,500.
What to do instead: Compare the total estimated annual cost based on your expected healthcare use, not just the premium. Factor in copays for doctor visits, specialist visits, hospital stays, and prescriptions you already take.
Mistake #2: Why Is Not Checking Your Doctor Network Before Enrolling So Risky?
Every Medicare Advantage plan has a provider network, and networks change every year. A HHS Office of Inspector General report found that Medicare Advantage provider directories contained inaccurate information roughly 50% of the time, meaning doctors listed as in-network may not actually accept the plan.
If your primary care doctor, cardiologist, or oncologist isn't in-network:
- HMO plans: You'll pay 100% out of pocket for out-of-network care (except emergencies)
- PPO plans: You'll pay significantly higher copays and coinsurance, often 40 to 50% instead of 20%
What to do instead: Call each doctor's office directly to confirm they accept the specific plan (not just the carrier) for the current plan year. Don't rely solely on online directories.
Mistake #3: What Happens When You Ignore Your Plan's Drug Formulary?
Medicare Advantage plans that include Part D coverage have a formulary, a list of covered medications organized into cost tiers. According to CMS, formularies can change annually, and a medication that was Tier 2 (preferred brand, low copay) last year could move to Tier 4 (non-preferred, high copay) this year.
The cost difference is dramatic: a Tier 2 drug might cost $15 to $40/month, while the same drug at Tier 4 could cost $80 to $150/month. For beneficiaries taking 3 to 5 medications, formulary mismatches can add $1,000 to $3,000 in annual drug costs.
What to do instead: Run every medication through the plan's formulary before enrolling. Check the tier, any quantity limits, and whether prior authorization or step therapy is required.
Mistake #4: How Can Prior Authorization Requirements Delay Your Care?
Prior authorization is one of the most frustrating aspects of Medicare Advantage, and one of the least understood before enrollment. A 2024 OIG report found that Medicare Advantage plans denied approximately 13% of prior authorization requests, and that 75% of denials that were appealed were eventually overturned, suggesting many denials were inappropriate.
Common services requiring prior authorization:
- MRIs, CT scans, and advanced imaging
- Specialist referrals (especially with HMO plans)
- Surgeries and inpatient hospital stays
- Certain brand-name and specialty medications
- Home health care and durable medical equipment
CMS has implemented reforms requiring plans to process standard requests within 7 days and urgent requests within 72 hours, but delays still occur. Learn more in our complete guide to Medicare prior authorization.
What to do instead: Before enrolling, ask the plan for its prior authorization requirements list. If you have ongoing specialist care or anticipate procedures, this is critical information.
Mistake #5: Why Does Not Understanding Service Areas Catch Snowbirds Off Guard?
Medicare Advantage plans are county-specific. If you travel frequently, spend winters in Arizona or Florida, or visit family across the country, your plan may not cover routine care outside your service area. Only emergency and urgently needed care is covered out-of-area.
This affects roughly 5.7 million Medicare beneficiaries who spend significant time in a different state, according to Census Bureau migration data. PPO plans offer more out-of-area flexibility than HMOs, but out-of-network costs are still higher.
What to do instead: If you spend more than a few weeks per year outside your home county, a Medicare Supplement plan, which works at any Medicare-accepting provider nationwide, may be a better fit.
Mistake #6: What Is the Long-Term Switch Risk Most People Don't Consider?
This is arguably the most consequential mistake on this list, and it's the one almost no one talks about during enrollment. If you choose Medicare Advantage now and later want to switch to a Medicare Supplement plan, perhaps because your health has changed, you've moved, or you want more provider freedom, you will likely face medical underwriting.
Your guaranteed-issue rights for Medigap plans last only 6 months (starting when you're 65+ and enrolled in Part B). After that window closes, carriers can:
- Deny your application based on health conditions
- Charge significantly higher premiums based on pre-existing conditions
- Exclude coverage for certain conditions for up to 6 months
According to AHIP data, approximately 8% of Medicare Advantage enrollees attempt to switch to Medigap each year, but a significant portion are unable to qualify due to health changes. Read our full Supplement vs. Advantage comparison to understand the implications.
Mistake #7: Why Should You Review Your Plan Every Year, Even If You're Happy?
Medicare Advantage plans change every October 1. Carriers can change networks, formularies, copay amounts, out-of-pocket maximums, and extra benefits, all without individually notifying you of each change. The Annual Notice of Change (ANOC) document is mailed each September, but many beneficiaries don't read it carefully.
Common year-over-year changes that catch people off guard:
- Your doctor dropped out of the network
- Your medication moved to a higher formulary tier
- The plan's out-of-pocket maximum increased by $1,000+
- Dental or vision benefits were reduced
What to do instead: During the Annual Enrollment Period (October 15, December 7), review your plan's ANOC and compare at least 2 to 3 alternatives. Or work with a licensed independent agent who will run this comparison for you.
Frequently Asked Questions About Medicare Advantage Mistakes
Can I switch Medicare Advantage plans if I made the wrong choice?
Yes, during the Annual Enrollment Period (October 15, December 7) or the Open Enrollment Period (January 1, March 31). During OEP, you can switch to another Advantage plan or drop back to Original Medicare. However, if switching to a Supplement, you'll face underwriting outside your initial Medigap OEP.
How do I know if my doctor accepts a specific Medicare Advantage plan?
Don't rely on online directories alone. Call your doctor's office and ask: "Do you accept [specific plan name] for the [current year] plan year?" Provider directories are frequently outdated.
Is Medicare Advantage worth it despite these risks?
For many people, yes, especially those who are healthy, use one local health system, take few medications, and prefer lower monthly costs. The key is choosing the right plan with full information, not just picking the first $0-premium option.
What's the single biggest mistake to avoid?
Not understanding the long-term switch risk (Mistake #6). If your health declines while on Advantage and you can't qualify for a Supplement later, you may be locked into Advantage plans for life, with their networks, copays, and prior authorization requirements.