Study shows Medicare Advantage enrollees face significantly higher out-of-pocket costs during serious illness compared to Medigap plans.
Medicare Advantage plans save enrollees approximately $2,200 per year in premiums during healthy periods but can expose them to up to $9,250 in out-of-pocket costs during a cancer diagnosis. In contrast, Medigap Plan G limits expenses to a $283 Part B deductible, offering potential savings of $6,300 compared to Medicare Advantage caps.
The trade-off highlights network restrictions and prior authorization requirements under Medicare Advantage, which become critical during serious illness. Switching back to Medigap after a diagnosis is often difficult due to medical underwriting rules in most states, risking denial of coverage when needed most.
For a 67-year-old in good health, Medicare Advantage may appear cost-effective with $0 premiums and added benefits like prescription coverage and gym memberships. However, a cancer diagnosis shifts priorities toward minimizing financial exposure and avoiding network limitations.