[goneil2024]

Deciding on whether to elect traditional Medicare or a Medicare Advantage (MA) plan is an important and in my view complex decision for most seniors approaching the age when they are eligible.

MA plans are heavily marketed and for those that did not perform their due diligence they often ask a friend for suggestions, or make the decision based simply on price or other factors. That being said, any such decision should consider multiple factors to include individual and family health history, economic situation, ability to absorb out of pocket expenses, the availability of services and delivery by the provider among others.

For some a MA plan may be the right choice, and according to published sources more than half of eligible Medicare beneficiaries are enrolled in MA plans as of 2024 (per KFF 54%). However It is striking to note that in 2007 only 19% of eligible enrollees elected MA plans and today that number has nearly tripled.

The challenge as I see it for most of us with all insurance purchases, be they property, casualty or health, is that we really don’t know how the agreement/policy will perform until we have a loss, or experience a medical event. Even though state insurance departments are in place looking out for consumers, there is only so much that can be regulated. Also, as noted, most insurers are in business to make a profit for their owners/stockholders, it’s simply a fact of business life.

Insurance in theory is designed to take uncertainty out of the equation, e.g., pay an amount certain agreed premium today for when an unknown and likely fortuitous event occurs. However, it is only at the time of a loss that most of us actually read (if at all) their insurance policies and learn what is and isn’t covered.

Conclusion - perform your diligence and make a decision based on what is best for you and your needs. Always consult legal, financial and subject matter experts before making important financial decisions.