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Each day thousands of us turn 65 and we need to address this choice. So how do we choose and what criteria do we need to consider in making this choice?

Fundamentally, we compare apples and oranges when we face this decision. Remember, Medicare Advantage plans are the actuarial equivalent of traditional Medicare (Parts A and B) and a prescription drug plan (Part D,) not traditional Medicare with a Medicare part D plan and a Medicare supplement attached. The decision is really between the open ended risk of traditional Medicare and a Medicare Advantage plan which has a maximum out of pocket limit which controls the upside risk for insureds. The choice is between selecting providers who accept Medicare assignment for maximum coverage in the traditional Medicare option and selecting providers who participate in the carrier network for the Medicare Advantage choice.

Please remember that the maximum mitigation of risk is available when we enroll in traditional Medicare with a Medicare part D plan and a Medicare supplement plan. It is not possible to enroll in a Medicare Advantage plan and a Medicare supplement plan simultaneously, so we potentially face more out of pocket exposure in a Medicare Advantage plan.

The trade off? There are 10 Medicare supplement plans with a variety of benefit options and premiums. It is possible to select a plan that will cover all expenses approved for Medicare coverage and leave us with very limited out of pocket risk, mostly the cost of the premiums. On the other hand Medicare Advantage plans have an out of pocket risk, but little to no premium.

So, how do we choose? On the surface it is clear that those who rarely have medical claims the “little to no premium” choice would be the most attractive. At the same time, those who have high claims would be best served locking in set premiums with little to no out of pocket cost.

And the rest of us????

The best we can do is to look back at the cost of our recent healthcare use and try to extrapolate the costs of those conditions forward. Are our medical conditions controlled with provider services like physician visits, lab work and x-rays? Or do we see most of our risk in the area of prescription costs?

There are many facets of the medical care decision when we become Medicare eligible. Please consider your options carefully and weigh what you know about your future use of care against what may come up spontaneously. Seek out as many answers as possible before your decision needs to be made.

Need help? Contact us at Czajkowski Dumpel & Associates, Inc.!