The Mathematics of Choosing a Medicare Advantage Plan

There is less than one month to go before the end of this year’s Annual Medicare Open Enrollment. The question that every person on Medicare must ultimately answer is whether to buy a Medicare Supplement or enroll in a Medicare Advantage Plan. From my perspective, this is a very easy question to answer.

Medicare — A Quick Overview

For the purposes of this article I am only going to talk about the individual age 65 or older without any special medical needs. This is the person who has enrolled in both Part “A” and Part “B” of Medicare and is now concerned about the potential out of pocket costs in traditional Medicare.

Part “A” of Medicare is also known as “hospital insurance”. This is the part of Medicare that will pay for all your in-patient hospital expenses after a per benefit deductible of $1452 in 2021. A “benefit period” begins on the day that you are admitted to a hospital or skilled nursing facility and ends 60 days after you have been discharged.

Under Part “A” of Medicare you pay nothing after the deductible for the first 60 days of in-patient care. Beginning on the 61st day and continuing through the 90th day you will pay $352 per day. From the 91st day through day 110 your copayment jumps to $704 after which you pay 100% of the costs.