Every year, Medicare open enrollment gives us an opportunity to look at our coverage and decide whether what we have still makes sense.
Most years, I haven’t given that decision a tremendous amount of thought. If my doctors were still in the network, my prescriptions were covered, and nothing dramatic had changed, staying with the same plan seemed like the easiest choice.
This year was different.
I started watching videos and reading more about Medicare Advantage, and before long I found myself wondering whether I had made the wrong choice.
I heard about prior authorizations. Provider networks. Claims being denied. And then there was the number that really got my attention: my maximum out-of-pocket expense.
For 2027, my Medicare Advantage plan has a $7,150 in-network maximum out-of-pocket limit.
That’s a lot of money when you’re retired.
So instead of automatically renewing my plan, I decided to take a serious look at my options.
And what I discovered reminded me of something that applies to a lot of financial decisions in retirement: the scariest number isn’t necessarily the number that tells the whole story.
Watch My Medicare Decision for 2027
In the video below, I take you through the entire process I used to make my Medicare decision for 2027, including the alternatives I considered and the real numbers from my own healthcare spending.
Why I Started Questioning Medicare Advantage
I didn’t start this process because I was unhappy with my Medicare Advantage plan.
That’s important.
My doctors accept it. I’ve been able to get the healthcare I’ve needed. And I haven’t personally experienced some of the Medicare Advantage horror stories I’d been hearing about.
But hearing enough of those stories made me start questioning whether I was taking too much risk.
The $7,150 maximum out-of-pocket amount especially bothered me.
I’m retired. I live primarily on Social Security, with my YouTube income providing some additional breathing room. A surprise $7,000 healthcare expense would matter.
I’ve written before about the 10 Choices That Let Me Live on Social Security, and keeping my recurring expenses under control is a big part of that. Adding hundreds of dollars a month for different insurance coverage isn’t a small decision either.
So I had two competing concerns.
Do I accept the possibility of higher healthcare expenses with Medicare Advantage?
Or do I pay considerably more every month for the predictability that a Medigap policy could provide?
I Looked at Medigap
One of the first alternatives I investigated was going back to Original Medicare and adding a Medicare Supplement, or Medigap, policy.
The appeal is pretty obvious.
Instead of worrying about a Medicare Advantage network or a large maximum out-of-pocket amount, I could pay a monthly premium and have much more predictable medical expenses.
But then I got actual quotes.
One Plan G option was approximately $214.81 per month.
That’s $2,577.72 every year in premiums.
And that’s before considering that premiums can increase over time.
I also looked at Plan N.
One quote was about $143 per month, or $1,716 a year.
That was considerably better, but it’s still a recurring expense I’d be committing to every year whether I used much healthcare or not.
There was also a high-deductible Plan G option at approximately $49 per month. That was much more attractive from a monthly-budget standpoint, although it obviously comes with a higher deductible before the supplemental coverage really begins helping.
This is one of the reasons I’ve become increasingly interested in looking at retirement decisions based on my actual life rather than general rules. It’s the same approach I took when thinking about If I Could Start Retirement Over — Here’s What I’d Do Differently.
There’s Another Complication: Underwriting
There’s an important difference between my situation and that of someone who is first becoming eligible for Medicare.
I’m already past my initial Medigap enrollment period.
That means I can’t necessarily decide that I want a Medigap policy and automatically be accepted.
Depending on the circumstances and the policy, I could have to go through medical underwriting.
That matters because switching away from Medicare Advantage isn’t necessarily a decision I could easily reverse later.
It made this more complicated than simply comparing monthly premiums.
Then I Looked at What Actually Happened This Year
This was the part of the process that changed my perspective.
Instead of continuing to focus on what could happen, I decided to look at what actually happened with my healthcare expenses in 2026.
And 2026 wasn’t a year when I barely used my insurance.
The medical providers involved in my care billed more than $50,000.
When you hear a number like that, you might assume I must have come somewhere close to my Medicare Advantage maximum out-of-pocket limit.
I didn’t.
My 2026 maximum out-of-pocket limit was $6,750.
The amount that had accumulated toward that maximum was only about:
$839.26.
That was the number I needed to see.
$50,000+ in Charges vs. $839.26 Toward My Maximum
I had been looking at a $7,150 maximum for 2027 and mentally treating it almost like an expected expense.
But it isn’t.
It’s a ceiling.
Could I have a year when serious illness or repeated hospitalizations caused my expenses to climb dramatically? Of course.
That’s the risk I’m accepting.
But my own experience showed me there’s a big difference between saying:
I could spend $7,150.
and assuming:
I’m going to spend $7,150.
Those aren’t the same thing.
And I almost allowed that worst-case number to make my Medicare decision for me.
The Monthly Premium Matters Too
My current Medicare Advantage plan has a $0 additional monthly plan premium beyond the Medicare Part B premium I would be paying regardless.
Compare that with paying $143 or $214.81 every month for one of the Medigap options I researched.
The Medigap premium is guaranteed to leave my bank account every month.
The Medicare Advantage maximum out-of-pocket expense is a possibility.
That doesn’t make Medicare Advantage better.
It doesn’t make Medigap better.
It means I’m deciding which type of financial risk I’m more comfortable accepting.
That’s a very different question.
And it’s similar to many of the choices I’ve made in How Downsizing My Life Made Retirement Feel Easier. Every additional recurring expense has to provide enough value for me to justify giving up that money somewhere else.
What About the Medicare Advantage Horror Stories?
I haven’t suddenly decided that all the concerns about Medicare Advantage are meaningless.
They’re not.
Networks matter.
Prior authorization matters.
Coverage rules matter.
And someone’s experience with a different Medicare Advantage company—or even a different plan from the same company—could be completely different from mine.
That’s why I don’t think there’s a universal answer to the Medicare Advantage versus Medigap debate.
I can only look at the plan available to me, the doctors I use, my financial situation, my health needs and my actual experience.
And my actual experience matters more to me than somebody else’s hypothetical example.
My Medicare Decision for 2027
After going through all of this, I’ve decided to stay with my current Medicare Advantage plan for 2027.
That doesn’t mean I’ve decided Medicare Advantage is the best choice for everybody.
It means I’ve decided it’s still the best fit for me right now.
My doctors are in the network.
I’ve been able to get the healthcare I’ve needed.
My actual expenses have been manageable.
And when I compared that experience with the guaranteed annual cost of the Medigap alternatives available to me, I didn’t see enough reason to change.
Could I eventually regret that decision?
Certainly.
But that’s true of almost every insurance decision.
We’re paying to manage risks without knowing which risks are actually going to happen.
I’m Going to Do Something Else With the Money
This process also gave me another idea.
Instead of paying $143 or $214 every month for a Medigap policy right now, I can put some of that money into savings.
That money remains mine.
If I eventually have a high-cost healthcare year, I’ve created a cushion to help deal with it.
If I don’t, the money is still there for another purpose.
Building more savings is already one of the things I’d like to accomplish at this stage of retirement. It’s part of the reason I’m continually looking at my spending and the decisions that allow me to [simplify my life and enjoy retirement more].
For me, that feels like a reasonable compromise between ignoring the risk and paying thousands of dollars every year to eliminate more of it.
Your Medicare Decision May Be Completely Different
I want to emphasize this because Medicare decisions are extremely personal.
Someone with significant ongoing health problems may look at these exact same numbers and reach a completely different conclusion.
Someone who travels extensively might value the flexibility of Original Medicare and Medigap more than I do.
Someone who has a Medicare Advantage plan with a poor network may have an easy decision to make.
And someone just entering Medicare may have options available without medical underwriting that I don’t have today.
That’s why I don’t think the question should simply be:
Is Medicare Advantage good or bad?
A better question is:
How is my Medicare coverage actually working for me?
Look at the doctors you use.
Look at your prescriptions.
Look at the premium.
Look at the network.
Look at the copays and coinsurance.
Look at the maximum out-of-pocket amount.
And, if you’ve already been on the plan for a while, look at what you’ve actually spent.
That last one was the piece I had been overlooking.
I Almost Let the Worst-Case Scenario Make My Decision
That’s probably my biggest takeaway from this entire process.
I saw $7,150 and got nervous.
Then I looked at my own experience.
More than $50,000 in medical charges had resulted in only about $839 accumulating toward my 2026 maximum out-of-pocket amount.
Suddenly, I was looking at the decision differently.
There are no guarantees that next year will look like this year.
But I would rather make my decision using the information I actually have than make it entirely out of fear of what might happen.
I’ve made plenty of financial decisions differently as I’ve gotten older. That’s one reason I enjoy looking back at [the things I would change if I could start retirement over].
Sometimes the best decision isn’t about eliminating every possible risk.
It’s about understanding the risk, deciding whether you can live with it, and preparing for it.
For 2027, that’s what I’m doing with Medicare.
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