Jul 9, 2026
Older Americans opt into Medicare Advantage plans thinking it’s cheaper health insurance, then face unexpected costs — some life-threatening.
Unlike traditional Medicare, Medicare Advantage requires patients to get an insurer’s prior authorization for medications and services before receiving insurance coverage.
Advertisement
“There are a lot of extra hoops you have to jump through,” Jake Siegel, a researcher at the Employment Benefits Research Institute (EBRI), told Moneywise.
Thanks for subscribing!
The insurance clarity you've been missing.
By signing up, you accept Moneywise Terms of Use, Subscription Agreement, and Privacy Policy.
Not everyone can jump through those hoops. Insurers can — and frequently do — deny prior authorization, leaving patients financially on the hook or without prescribed treatment.
Unfortunately, the latter can seriously impact a patient’s health.
As the Washington Post reports, that’s what happened to 70-year-old Medicare Advantage enrollee Margaret Hvatum, who ended up hospitalized in late January.
How a Medicare Advantage enrollee ended up in hospital
According to the Post, Hvatum’s insurer, Humana, denied her prior authorization request for a life-saving drug called Hizentra. It was the first time she’d been denied the drug under her Medicare Advantage plan.
For years, she got prior authorization for Hizentra from her former insurer. But she was one of millions of Americans who had to switch insurers this year as a growing number of carriers pulled out of Medicare Advantage plans or limited their coverage to reduce costs.
Hvatum couldn’t afford Hizentra on her own. A month’s supply costs $8,141.94. So she missed doses and ended up with an infection that sent her to hospital. Humana then denied coverage for her hospital stay.
After she appealed, Humana reversed both denials and covered Hvatum’s prescription and hospital stay. But her story is a cautionary tale about the disadvantages of Medicare Advantage.
Moneywise reached out to Carrie Graham, Director of the Medicare Policy Initiative at Georgetown University’s Center on Health Insurance Reform (CHIR), to learn more.
Advertisement
Graham said private insurers have always been free to deny prior authorization requests under Medicare Advantage, but the denials are soaring.
“We’re at a bit of a tipping point,” she told Moneywise. “Denials of care have gotten more aggressive.”
At the same time, insurers are frequently reversing denials in the face of clients’ appeals, like Hvatum’s, suggesting “something’s wrong” with the system.
It’s certainly bogged down. According to the health policy think tank KFF, there are 35 million people enrolled in Medicare Advantage. Meanwhile, insurers reviewed 53 million prior authorization requests in 2024 — more requests than enrollees in the system.
Advertisement
Graham noted that the red tape is even driving health providers out of Medicare Advantage.
“We’re seeing a lot of health systems and doctors saying it’s too much money to deal with the administrative costs,” she said.
A year ago, a coalition of insurers agreed to streamline the system by 2027, pledging to speed things up and reduce the number of treatments and tests that require preapproval.
That’s still a work in progress.
Must Read
- The ultra-rich use these 5 real estate strategies to build wealth while they sleep — you can start with just $100
- Here’s the average income of Americans by age in 2026. Are you keeping up or falling behind?
- Insurance companies profit most from drivers who auto-renew without shopping around. Comparing 100+ quotes takes 2 minutes and costs nothing
Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
The pros and cons of Medicare Advantage
So why are people still signing up for Medicare Advantage? Because they need coverage that Medicare alone doesn’t provide and they can’t afford the alternatives.
Advertisement
One alternative is to pay 20% out of pocket under standard Medicare. But depending on the treatment, that can be prohibitively expensive.
Another option is purchasing Medigap Plan G, which tops up Medicare to cover more out-of-pocket health expenses, like copayments for a doctor visit. But unlike Medicare Advantage, it doesn’t cover dental, vision or prescription costs.
Plus, Medigap Plan G comes with higher monthly premiums — starting anywhere from $104 in New Mexico to upwards of $300 in New York. But depending on your risk profile, a premium could also reach the $700 range. Graham says Medigap has become a “luxury product” that is more viable for older adults who received it as part of their retirement benefits package.
As the cost of healthcare and drugs continues to rise, that leaves Americans turning to Medicare Advantage regardless of its disadvantages.
You May Also Like
- JP Morgan sees gold hitting $6,000/oz before 2027 — and a Gold IRA lets you hold the physical metal while deferring the tax bill. Get your free guide from Priority Gold
- Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — here’s what it is and the simple steps to fix it ASAP
- Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how
- Millionaires under 43 are reshaping investing — just 25% of their portfolios are in stocks. Here’s where their money is going
Laura Boast is an Associate Editor with Moneywise.com and a lifelong content creator who has reached international audiences at Discovery, CBC, Blue Ant Media, Bond Brand Loyalty and more.
