The Fine Print to Look for in Your Medicare Advantage Coverage Rules

notebook with rules with medicare advantage coverage rules in background

When it comes time to enroll in Medicare, you might be tempted to purchase a Medicare Advantage plan because they can offer extra coverage for reasonable premiums, but it’s important to do your research first. If your plan has very low premiums, it may be because the insurer is cutting corners somewhere else in order to save money, which could affect your health in the long run.

Different types of Medicare Advantage plans

Most Medicare Advantage plans are either HMOs (health maintenance organizations) or PPOs (preferred provider organizations). Knowing what kind of plan you have is crucial to your long-term health because certain Medicare Advantage coverage rules could delay or even prevent you from getting necessary healthcare if your insurer doesn’t think you need it.

Two common roadblocks in Medicare Advantage coverage rules are referrals and prior authorizations.


HMO plans require you to select a primary care physician (PCP). If you need a referral to see a specialist like an endocrinologist or cardiologist, you will first need to see your PCP in order to obtain that referral.

Referrals are put in place to save both the patient and the insurer money. If the problem can be addressed in the office of the PCP, there will be no need to send the patient to a specialist and have expensive tests run. However, they can slow down the process. If a patient requires somewhat urgent medical treatment from a specialist, it could be months before they are able to see their PCP, schedule an initial appointment with a specialist, receive tests, and begin treatment.

Note: referrals do expire, so schedule an appointment with your specialist as soon as you receive the referral, as some specialists have long wait times.

PPO plans emphasize patient choice and do not require a referral for specialized treatment. However, it’s still recommended that patients with a PPO plan stay in network, as out-of-network providers can charge as much as double the cost of service.

Prior authorizations

A prior authorization is when a doctor must receive approval from an insurance plan before treating a patient. Most of the time, this is not used for run-of-the-mill blood tests, but more often for expensive treatment plans and medical devices.

Some plans may require step therapy, in which the plan will not approve the fourth (and often more expensive) option of treatment, until options one, two, and three failed to work. Other plans may require a patient to be seen by their PCP or specialist a certain number of times before they will cover the testing or treatment.

Prior authorizations are common for employer-sponsored health plans, but many Medicare Advantage plans take it one step further and require prior authorization for tests and treatment as simple as X-rays and physical therapy.

Most Medicare Advantage plans will not advertise that they require prior authorization, but a recent Kaiser Family Foundation study found that approximately 80 percent of Medicare Advantage enrollees are in plans that require prior authorization.

Note: If your plan denies your prior authorization, your doctor may still order the test or treatment if they feel it is medically necessary. However, you may have to pay out of pocket, and appeal your plan’s decision at a later time.

Coverage rules for Original Medicare and Part D

  • Original Medicare does not require a referral. If you have Original Medicare and need to see a specialist, you must simply find one who accepts Medicare assignment and set up an appointment.
  • Original Medicare also does not require prior authorization.
  • Because they are sold by private insurers, some Medicare Part D drug plans may require prior authorization before filling a medication. This is done in order to ensure that the medication is absolutely necessary to the patient’s health.

To see if your plan requires things like prior authorization, you can call the plan directly or use Medicare’s Plan Finder, which will allow you to see the specifics of your plan and compare it alongside other plans.

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