If you're turning 65 this year, you're about to get buried in mail about Medicare plans.
Two of the biggest options are Medicare Advantage and Medicare Supplement plans, and picking between them can swing your yearly health costs by thousands of dollars.
Medicare Advantage, also called Part C, is run by private insurers and bundles your hospital, medical, and usually drug coverage into one plan.
Many charge $0 premiums, but you generally stay in a network and pay copays as you go.
Medicare Supplement, often called Medigap, works alongside original Medicare.
You pay a monthly premium, and in exchange it covers most of the gaps original Medicare leaves behind, like the 20% coinsurance on doctor visits.
The trade-off comes down to how you like to pay.
Advantage plans tend to have lower monthly costs but higher costs when you actually use care.
Medigap is the reverse: a higher monthly bill, sometimes $100 to $200 or more depending on your state and age, but far fewer surprises when you see a doctor or land in the hospital.
Networks are the dealbreaker for a lot of people.
Advantage plans often require you to use in-network doctors and may need referrals for specialists.
If you travel a lot or split time between states, that can bite you.
Medigap generally lets you see any provider nationwide who accepts Medicare, which is most of them.
Most Advantage plans include Part D prescriptions, so it's one card and one premium.
With Medigap, you'll usually buy a separate Part D plan, which means another monthly bill but often more flexibility in which pharmacies and drugs are covered.
There's also a timing trap that catches people every year.
When you first enroll in Medicare, you get a one-time window to buy Medigap without answering health questions in most states.
Miss it, and insurers can charge you more or turn you down based on your health history.
Advantage plans, by contrast, let you switch during open enrollment each fall, but you may not be able to move back to Medigap later without underwriting.
Start with your health and your budget, not the brochure.
If you have ongoing conditions, see multiple specialists, or want predictable costs, Medigap is often worth the premium.
If you're generally healthy, want the lowest monthly bill, and you're comfortable staying in a network, Advantage can work well.
Add up premiums, then estimate copays for your actual doctors and prescriptions.
A plan with a $0 premium can still cost you more than a Medigap plan once you factor in a hospital stay or a few specialist visits.
Call the offices and ask which plans they accept.
A cheap plan that doesn't cover your cardiologist isn't cheap at all.
Our take: there's no universal winner here, and anyone who tells you otherwise is selling something.
The right call depends on your health, your doctors, and how much uncertainty you can stomach.
Final Thoughts
Spend an hour comparing plans before you enroll, because this decision tends to stick with you for years.