Advantage or Supplement: Which is right for you?
These four factors will help you make the right decision.
1) location. SOME PLACES HAVE GREAT MEDICARE ADVANTAGE PLANS. SOME PLACES DON'T.
The same 10 Medicare Supplement plans are offered all over the country. The benefits for these plans are set by the federal government, meaning each letter plan (Plan G, N, C, etc) provides the same benefits, regardless of where you live or which insurance company runs the plan. Medicare Advantage (MA) plans are the opposite. Each insurance company comes up with it’s own set of MA plans and decides where to market them, so depending on where you live you could have 20 good choices, or 2 terrible ones.
You can get an indication of the quality of MA plans in your county by looking at MA enrollment rates. In areas where there are high quality MA plans with generous benefits, a high percentage of people will be enrolled in MA plans. In areas with poor quality plans, the percentage will be lower.
Hover your mouse over the county you live in on the map below to see what percentage of medicare enrollees in your county chose an MA plan. You can zoom in by clicking the ‘+’ button (top right corner of the map), then click-and-drag to move to a new location.
If you are reading this then interactive map features are not available on your mobile device. You can zoom in on the image to get a rough idea of how your area compares, or you can visit this page on a larger device (such as a laptop or desktop computer) to see the full version.
Need help deciding which type of plan is best for you?
2) Consider Your Budget
There’s no getting around it: Medicare Supplement plans are generally more expensive than Medicare Advantage plans. But don’t rule out supplement plans just because you aren’t planning to retire on a pile of gold. A Medicare Supplement plan can provide financial stability and security that is probably even more valuable to a lower or middle-income retiree than it is to a wealthy one.
Most folks can get a Medicare Supplement plan which will cover almost all of their medical bills for $150-$200 a month. That’s a great deal, especially for people who have some sort of chronic condition. If a Medicare Supplement plan is at all within your budget, I encourage you give them some serious consideration.
3) consider your tolerance for risk and change
Peace of mind contributes more to your overall satisfaction with your plan choice than most people imagine. It determines how you feel about your coverage when you are not actively utilizing it - which is most of the time.
Medicare Advantage (MA) plans generally have lower monthly premiums and higher out of pocket costs than Medicare Supplement plans. If you sign up for an MA plan, you’re taking a bet -- if you stay healthy, you save money and win. But if you get sick and get hit with a big bill, you'll lose compared to Medicare Supplemental.
Are you comfortable making that type of a bet? Would losing that bet mean financial hardship for you? If so, think about whether the savings you get when you're healthy would be worth the financial stress you might feel in the event of illness or injury. The answer depends on how well you handle risk and uncertainty, as well as how much money you have in your savings account.
Consider this as well: Medicare Advantage plans can change their benefits each year. Does the idea of changing insurance plans every few years stress you out? Have you been stressed out so far by the process of finding a Medicare plan, or has it been easy for you? I find that usually my younger clients are happy to save money and flit from one Medicare Advantage plan to another, but they eventually want to settle down with a plan for the long term. At that point, those that are still healthy and can pass medical underwriting will usually enroll in a Supplement plan.
If you are someone who has always stressed over insurance and bills, then maybe a stable, predictable Medicare Supplement plan is a good option for you. However, if you like the idea of saving money every month and don’t mind occasionally paying higher copayments and coinsurance at the doctor’s office, then you could do well on a Medicare Advantage plan, which could save you money and provide nice extra benefits like gym memberships and dental.
4) consider your health
If you have a chronic condition that requires frequent expensive medical treatments, you should jump on the once in a lifetime chance to sign up for a Plan G Medicare Supplemental when you turn 65, and virtually eliminate all medical bills for the rest of your life. If you do have a pre-existing condition, you would need to enroll during your six month Med Supp Open Enrollment Period to avoid medical underwriting. You can learn about this process in my lesson on Medicare Supplement plans.
Many folks who are currently healthy decide to sign up for a Medicare Advantage plan when they first become eligible for Medicare to save money, and may think that they will sign up for a supplement plan when they are older. This is a fine strategy, but does carry some risk: if you become ill before you decide to make the change, you might never be able to pass underwriting and could end up permanently in the MA system. If you live somewhere with a poor selection of MA plans, this could be costly in the long run.