Rodney is turning 65 and will continue to work in his business as much as he chooses. He doesn’t have any health insurance currently. After learning about  Medicare Advantage plans and Medicare Supplement plans, he much prefers Medicare Supplements so that he is not restricted to a network of providers. He wants to be able to go to any doctor he chooses without needing a referral or worrying about whether the provider is in network.

He is starting Medicare after January of 2020, which makes him ineligible for Plan F, so Plan G and Plan N are his top choices for Medicare Supplement plans. He has an open enrollment period around his 65th birthday so he won’t have to answer medical questions to apply. That’s good news for Rodney because he wouldn’t qualify medically for a MediGap plan since he had a heart attack recently.

Rodney will need to pay his Part B premium of $170.10 (2022 price), in addition to a Medicare Supplement Plan G monthly premium of about $150 for a 65-year-old male tobacco user in his state. He will also be subject to the $233 Part B deductible at the beginning of each calendar year, to be paid as he gets treatment during the year. These costs will be predictable, regardless of what happens with his health during the year. Whether he has a stroke or goes all year with just the sniffles, his healthcare costs will be the same: the monthly premium times twelve, plus the Part B deductible.

Because drug coverage is not included in Medicare Supplements, he will pay separately for a drug plan. Dental, vision, and hearing coverage is not included in Medicare Supplements either so he could choose to buy a separate plan for that.

Those who don’t want to pre-pay healthcare in advance might like how Medicare Advantage works better, with little-to-no upfront costs. Instead, costs are incurred as medical services are received during the year. This makes budgeting hard because you can’t predict what will happen during the year, but healthy people can often save money with a Medicare Advantage plan. (Those with critical illnesses who need frequent treatments will usually spend more with a Medicare Advantage plan.)