Choosing a Medicare plan is not just about picking the most affordable option. It is about making sure the coverage actually works when needed. Unfortunately, some Medicare plans look good because they are cheap or offer “extra” perks, but they offer little value, especially during emergencies. To make wise decisions, individuals should carefully look for red flags associated with such Medicare plans and avoid them.

Plans with low ratings

When buying any product or service, individuals often tend to look for ratings and feedback to ensure quality and to avoid risks. The same needs to be done for Medicare plans. The Centers for Medicare and Medicaid Services (CMS), a federal agency, assesses the quality of Medicare plans every year. It rates Medicare plans on a five-star scale, based on factors such as customer service and healthcare quality. The plans that consistently receive a rating of three stars or less should not be purchased. This is because such low ratings clearly indicate problems, such as poor service, limited benefits, or ongoing management issues. These are important red flags to watch for when choosing a Medicare plan.

Plans that require prior authorization

Some Medicare plans need prior authorization from the insurance company in order to get certain prescribed treatments or services covered. This can be a long, tiring process because multiple steps are involved. First, the policyholder’s doctor must explain to the insurance company why the treatment is necessary. Then they need to provide details on which other treatments have been tried for the individual’s condition and why they have not worked. Once the insurance company reviews all the details, it will either approve or deny coverage.

Typically, an insurance provider takes several days to several weeks to review the request. For severe conditions or emergencies, these delays can worsen an individual’s health while they wait for approval. And even waiting for so long does not guarantee approval. A study found that nearly 4.1 million Medicare Advantage prior authorization requests were denied, either in full or in part, in 2024. So, those who may need immediate care or specialized services should consider avoiding such plans.

Plans that have a restricted network

Some Medicare Advantage plans have a tight, limited network. This means they restrict which doctors, hospitals, and specialists policyholders can consult. If an individual’s preferred doctors are not included, they may have to switch to a new one. Or if they plan to see a doctor outside this network, they will incur higher out-of-pocket costs. This can be especially problematic for those who need specialized treatment or live in rural areas with a limited network of hospitals and doctors. So, before choosing a Medicare plan, individuals should confirm that it has a wide network of hospitals that cover their preferred providers.

Plans that have high out-of-pocket costs

One of the most basic purposes of buying medical insurance is to reduce out-of-pocket costs. But certain Medicare plans do not help individuals do that. They often feature $0 or low monthly premiums to initially attract budget-conscious customers. But what they hide behind those low premiums is high deductibles, copayments, or coinsurance. So the policyholder’s out-of-pocket costs can add up quickly for things like hospital stays, outpatient procedures, or specialist visits.

Plans that have limited benefits

Some Medicare plans provide extra perks, such as gym memberships, and incentives like wearable fitness trackers and access to virtual exercise classes. But such perks often come with strict usage limitations and restricted access to certain locations. Plus, these benefits can change annually. Additionally, if such plans do not cover essential services such as specialist care, durable medical equipment, or chronic condition management, individuals should avoid purchasing them.